The views and opinions expressed in this article are those of the author.
I recently attended the National Housing Federation’s Board Excellence in Housing event. This great conference is aimed at Housing Association Chairs and NEDS. Being neither, I attended as an interested stakeholder.
Why?
Three reasons:
So, what did I learn at the event?
That the sector has a sense it should do ‘governance’ better but hasn’t quite nailed how to do so. The spirit is somewhat willing, but the flesh is weak.
Most attendees agreed with Mark Goodridge of OE Cam that boards spend too much time dwelling on the past and not enough preparing for the future. There was a consensus that it’s easier to identify bad governance than to know what good looks like.
It’s probably why, as I learned in a session on assurance and good governance from RSM, only 24% of mid-market Housing Associations agree that corporate governance is critical to achieving strategic business objectives. As someone who observes the potential of boards to drive long-term performance, that’s hugely depressing. It’s difficult to focus on governance as a driver of performance if you think it’s something it’s not.
Perhaps at this point, I’ll take a little detour into definitions: at Board Intelligence we define governance as “the discipline of a well-run organisation”. A discipline that extends from the board to leadership and management.
It’s not the discipline of staying awake through a navel-gazing board meeting supported by a 250-page board pack that can’t be read in time.
As the Chair for the two days, Lord Kerslake said: “Chairs and NEDS should provide steerage, advice, and challenge, as well as championing the organisation”. That’s good governance by another name.
Whether they like it or not, boards have to own good governance.
Practicing good governance requires boards to reassess their existing behaviours and adopt some new ones. Here are a few shifts board members should steer to achieve board excellence.
Diana Warwick of the Federation made the point that boards must have strategic direction if they want to be sufficiently resilient and respond speedily to challenges. If you know where you’re going as an organisation, you’ll be more focused and more likely to get there. And strategy is the responsibility of the board.
As we heard from Mark Goodridge, board members should get used to the idea that being a Chair or NED is meant to involve an element of discomfort. They shouldn’t be pulling in a different direction to management, but they must provide that challenge which is a cornerstone of good governance.
Boards should expect reliable and accurate data that they understand and, as one NED from a client of Board Intelligence’s insisted, this information should create room for debate.
More pointedly we heard from Helen White, Chief Executive of Taff Housing and a Chair and NED of other organisations, that the board will justifiably hunt for bad news. We hear this all the time at Board Intelligence from NEDS — “I’m not really paying attention until I read the bad news”.
That’s often a trust issue — there must be some bad news — so management should just get it out there. In fact, if they do, they’re far more likely to keep the board onside.
Trust does seem to be a challenge: in more than one session I heard that the board needed to “triangulate” the information they received from management. Whilst it’s laudable that board members should go beyond their board pack, going out and visiting properties, for example, I got the sense triangulation often meant making sure management aren’t telling the board fibs or massaging the data. That’s about trust.
It’s the role of the Chair to ensure that the organisation has a leader and a team that the board trusts, and a board of directors that the leadership trusts. Dysfunction is simply resigning yourself to painful board meetings.
The event brilliantly identified the challenges Housing Association boards face. It also provided a good conversation starter for how to address them.
But how do boards, in practice, get strategic, ask better questions, get better information and build a relationship of trust with management?
It’s not about hiring highly paid lawyers, accountants, and consultants to do one-off pieces of advisory work. As Helen White said, boards can outsource advice, but they can’t outsource judgement.
Good judgement starts with the choices that a board makes: what their priorities are, how their agendas align to them, how much time they spend on them, how their board papers reflect them (and just them), how data is presented, above all, what the expectations of the board and the executive are. At Board Intelligence we call this the discipline of focus.
Board Intelligence’s platform brings to the table the discipline of focus required for board excellence and good governance. Our priorities planning tool, paper briefing functionality, report author training, and templates and intuitive directors’ app are designed to enable the strategic thinking and decision making that are the cornerstones of an effective board.
As we heard in the Economic and Political Briefing given by Trevor Williams of the Institute of Economic Affairs and George Parker of the Financial Times, technology can help solve these problems if only organisations would let it.
I didn’t attend the event expecting such a correlation between the challenges that the sector faces and the solution we can provide. But I’m glad that we can help.