The views of a Chair: Do our Boards really work?

Published by Jon Land for 24dash.com in Housing

Andy Ballard is a housing lawyer who has advised and trained housing clients for many years, particularly on good governance. He is a consultant with Campbell Tickell and is Chair to Herefordshire Housing - a rural stock transfer organisation owning and managing 5,400 homes in and around Hereford and Ross.

“Yes” I hear you say. “Of course they do” – but do they really? Are Boards truly effective?

We should all subscribe to a code of governance. Most will subscribe to the National Housing Federation model; but any of the more commonly used codes will suffice – providing we read it and understand our roles and responsibilities as Board members.

The Federation`s code sets out that we must “be effective in leading and controlling the organisation” adding “the purpose of the Board is to determine strategy.” We must put in place “a framework of delegation and systems of internal control”. Perhaps more importantly, we must avoid becoming involved in operational matters.

Whilst our senior colleagues might signpost our direction of travel and highlight areas of risk, it is for the Board to agree and direct the strategy. We must ask the right questions of our senior colleagues in a constructive and supportive manner and make sure we are able to interpret the information we are given. We must not step into areas of management. The code reminds us “Operational management of the organisation must be delegated to the organisation`s staff”.

To be effective, Boards and senior colleagues must work together to make sure we respect boundaries, provide support to each other and develop mutual trust and confidence in each other. We have complementary skills and must recognise the contribution each makes. It cuts both ways; senior colleagues must understand Board members bring a wealth of experience and should value and appreciate their input whilst Board members must not underestimate the many years of experience our executives bring. Indeed, that is probably why we appointed them in the first place!

We must embrace hard-edged appraisal. It should not be “window dressing” but a proper review of performance with agreed outcomes. If we are failing at Board, we should be given support, but if we are not good enough, we must step aside. Places at Board are too valuable to be diluted by underperformance.

So what does this mean in real terms?

Moving forward, we are likely to see an increase in the number of organisations that remunerate Boards and indeed, an increase in the levels of remuneration. There will be greater “professionalism” (if that is the correct word) and fewer places on Boards allocated by way of a constituency; be that elected members or residents. This is not to say that residents have no place on Boards – the point is that each Board member needs to bring skills to the table. Board recruitment and renewal will reflect our risk map to ensure we have the right skills mix to understand and address the very serious challenges and threats we all face.

The work we do will also change. How often are we given a bundle of Board papers one inch thick including the review and approval of various documents and policies? Should that aspect of our work be undertaken at committee level? How much time do we allow ourselves to discuss matters? Indeed, do we really have a “say” in the Board agenda or is it given to us by our executive? That is not to say we should not be reviewing policies or relying up on our executive to direct the agenda at Board – my point is; we at Board should spend much more time on strategy and on identifying risk than we currently do. And if we have more “professionalism” on Boards, new colleagues joining us with experience of governance will expect to see it.

I think we will meet less often to review “day to day” papers but meet more often to review and consider strategy. We may see perhaps four “regular” Board meetings each year and four “strategic” meetings. Meetings will probably be shorter but more effective. The relationship between Chief Executive and Chair will be closer; but not cosy.

Don’t forget, one of the tasks allocated to Boards is “the appointment and, if necessary, the dismissal of the chief executive, and the approval of his or her salary, benefits and terms of employment” There will be more effective team work.

I am not sure if that will mean we will see more executive formally appointed to Board; probably not, given that I expect to see a trend of Boards reducing in size. After all, will the advice and support given by our executive change if they are Board members? I doubt it.

Does this mean we will see more conflict between the Board and the executive? Possibly; but we must avoid that at all costs. As true partners we must all have the confidence to ensure appropriate challenge and the maturity to withstand disagreement.

So, have an honest look at your Board and ask “are we effective?”