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Diversification and risk

Judy Wayne reports on the key themes from the annual Altair/Devonshires seminar in Cardiff

The Wales Millennium Centre hosted two events on a late November afternoon: The Lion King, and the annual Altair/Devonshires seminar with the rather less catchy title of ‘Diversification and Risk – Maximising Capacity while Protecting Social Housing Assets’.  We hope that the audience for the musical found it as stimulating and enjoyable as our afternoon!

Brian Johnson, chief executive of Metropolitan, and Stuart Ropke, chief executive of CHC, both commented on how the future is becoming increasingly risky and uncertain for housing associations, with national and Welsh Government elections, welfare reform, further devolution, local government reform and financial cutbacks all on the horizon, if not already happening.

There were some strong messages coming from their talks:

  • Capacity – or rather, lack of it – is a real challenge (people and finances)
  • High levels of numeracy are needed – by board members, executives and housing staff generally
  • Risk is part of doing business – the trick is to manage it to a level that is acceptable to the business
  • Find the ‘dead bodies’ – the problems; there will be some in all organisations
  • Seriously consider the board skills and expertise required to govern the organisation now and in the future, and respond to future needs
  • What was good enough in the past is not adequate now.

Altair and Devonshires speakers looked at structures for new developments and group structures, private placements and other funding opportunities, addressing risk, lessons learned from housing association diversification in England, and governance and human resources issues arising when diversifying.

Here are some of the themes:

  • Housing associations generate ‘social good’ in communities
  • Creating more when constrained (by legal structures, finances, etc) involves a higher level of risk and complexity
  • Association funding strategies are combining long-term bond finance and short-term bank lending
  • The lesson to learn from diversification is how it is risk assessed, structured and delivered, and not necessarily the nature of the activity
  • Embed risk management throughout the organisation
  • Robustly test internal controls
  • The board should be in control
  • What will break your business? – risk assess the impact of two, three or four  simultaneous crises.

Altair contacts

Strategy and governance: Judy Wayne, 029 2037 7268; judy.wayne@altairltd.co.uk

Finance: Susan Kane, 07870 685 891; susan.kane@altairltd.co.uk and Jim Lashmar, 07968 616550; jim.lashmar@altairltd.co.uk

HR and governance: Michael Appleby, 07545 314 749, michael.appleby@altairltd.co.uk






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