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Making a step change in governance

The Regulatory Board for Wales is leading a review of housing association governance in Wales with the intention of driving a step change that ensures the sector is as resilient as possible into the future. Ceri Victory-Rowe explains.

Building on the great strides many organisations have already made in this context since the last review of sector governance was carried out in 2013, the review aims to assess progress and set out a governance transformation plan for the sector.

The findings of the review will also inform Community Housing Cymru’s revision of its code of governance and its governance offer to the sector.

The review of sector governance carried out in 2013 by Campbell Tickell recognised the substantial effort which had already gone into strengthening governance in Welsh housing associations but concluded that considerable further change was needed in order to equip associations to operate successfully in a rapidly evolving operating context.

Since then, a number of significant changes have taken place which combine to place considerable further pressure on the sector to up the ante when it comes to good governance.

Firstly, a revised regulatory framework was published in December 2016, and places greater emphasis on good governance and the ways in which boards discharge their responsibilities.

Secondly, regulatory reforms intended to enable the Office for National Statistics (ONS) to reclassify housing associations in Wales back to the private sector for accounting purposes, and proposed in a Bill soon to be introduced to the National Assembly, further emphasise the autonomy of housing association boards in relation to key decisions such as property disposals.

Thirdly, an inquiry has recently been undertaken by the Public Accounts Committee (PAC) of the National Assembly for Wales into the regulatory oversight of housing associations. The inquiry recognises scope for improvement with regard the openness and transparency of sector governance and welcomes the Regulatory Board’s review.

Finally, over the course of the last few years, some significant lessons have been learned from regulating housing associations facing complex challenges. In the most complex cases, the regulatory team within Welsh Government has found that weaknesses in housing association governance have been a significant factor.

Taken together these factors mean that governance is high on the Regulatory Board’s agenda. The Board recognises the considerable good practice demonstrated by many housing associations but is also aware that work remains to be done to achieve the ‘step change’ recommended by Campbell Tickell.

As such, the Regulatory Board intends that this review will:

  • Provide commentary on the current state of sector governance and progress made since the 2013 review
  • Inform review of the CHC code of governance and CHC’s governance offer
  • Move beyond the ‘nuts and bolts’ processes of governance (which was the focus of the 2013 review) to explore the attitudes and behaviours which underpin good governance
  • Prompt discussion in the sector about what good governance looks like, how standards might be improved and what support is needed
  • Provide a governance transformation plan for the sector that shows how the necessary step change can be achieved.

To achieve these aims the Regulatory Board has commissioned consultant Tamsin Stirling to carry out a review which will include desk-top research (building on the 2013 review and including definitions of good governance, lessons learnt from regulation and positive practice examples) and work with the sector and other key stakeholders including tenants, lenders and regulation managers (through surveys and workshops).

The review will be carried out in close collaboration with CHC, engaging through CHC’s professional networks and running joint workshops.

The review is being overseen by a steering group and a correspondence group. The steering group is responsible for managing the review on behalf of the Regulatory Board and is chaired by me as Regulatory Board member.

Membership includes other members of the Regulatory Board as well as housing association chief executives, governance professionals, board members and tenants, members of the Welsh Government’s regulation team and representatives of both CHC and TPAS.

The correspondence group is formed of other stakeholders who are interested in contributing comments on the progress of the review.

The review began in June and is intended to conclude by the end of March 2018, with the findings presented at CHC’s governance conference.

Ceri Victory-Rowe is a member of the Regulatory Board for Wales and chair of the governance review steering group

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