NHF Eastern Region Board Seminar Lines of Sight

Transcription

1 NHF Eastern Region Board Seminar Lines of Sight Margaret Allen 28 January 2016 savills.com

2 Order of business... Context what impacts our line of sight The roles of the Board current lines of sight Board Accountability and Co-Regulation Board Cultures and Behaviour Mergers and Partnerships The Merger Code

3 Context what impacts our line of sight? Political Economic Social Regulatory Competing and contradictory stakeholders Wider range of competitors

4 and looking forward.. Welfare Reform a game changer Rent reductions / interest rates Perception of HA capacity Sector operating efficiency? Consolidation agenda Reclassification issue Supply of new affordable homes Its all about delivery... 1,050 1, HA Management Costs Per Unit versus Inflationary Rises Management Costs Inflation Rises

5 The Role of Governance? Efforts and courage are not enough without purpose and direction - JFK

6 Masters of your own destiny Business and Governance don't work in isolation The role of the Board is pivotal Multi task running today, deciding tomorrow and planning ahead Board must make time for all three and ensure they remain connected to the business.

7 Stewardship being conscious of the legacy created through strategic decision What will best achieve the organisation's objectives and obligations to service beneficiaries? Generative The purpose of the organisation - our role and purpose. Strategic how we fulfil the role and the offer to key stakeholders Fiduciary how we are delivering the role, how we stay on track or adjust where necessary

8 Generative Mission Statement Review it and consider if it is still relevant What is our role in the local community who are our customers? Where should we be in 5, 10 years time? Does the structure still lend itself to delivery of the mission Expectations and options

9 Generative: Mission v- Structure If there is an alternative way to deliver the mission that is more efficient and effective, then Board should explore it

10 Generative: is this still the right structure? A balance of form and function Customer and Constituency Federal Group structure Functional Group structure

11 Generative: is this an effective structure? The role of the parent and subsidiary? The role of Committees and Board? What can be delegated and where does responsibility lie? The cut off between operational and decision maker?

12 Generative: is this an effective structure? The cost of governance, board size, constituency and servicing costs Board size, membership, Arrangements for Committees and accountability to Board Annual consideration of board effectiveness

13 Essential functions of the Board and Chair Clarity on role and duties of the board Positive culture with customer focus Economic and efficiency role VFM Role and power of the parent board Critical role of Chair in Leadership

14 Strategic How to deliver Mission Statement? Strategies direction and priorities, budgets and targets Stress Testing & Risk Register Key Statements Corporate & Business Plan VFM Statement Asset Management Strategy Development Strategy

15 Strategic: VfM - the exam question rigorous appraisal of options for improving value for money including the potential benefits in alternative delivery models - measured against the organisation s purpose and objectives. Set measurable plans for making better use of assets based on an understanding of costs, values and yields; Understand and provide actual cost per unit trend data; Understand and be specific about your performance within your peer group; Report performance against last year s VfM targets; Set clear VfM performance targets for the next period

16 Strategic; Development Strategy Board sets strategy Financial capacity, risk framework and stress tests Appraisal parameters and investment criteria Loan conditions and lender consent? Performance and risk monitoring Triggers and thresholds to manage market risk e.g. Maximum unsold stock Maximum committed work in progress

17 Fiduciary Performance Reporting Budget performance Liquidity ratios and covenants Operating performance In year operating challenges Risk Register & Audit Reports Customer Satisfaction

18 Board Accountability & Co-Regulation Its not about meeting the needs of the regulator its about taking ownership of the need to drive efficiency and value so you have the resources to do what you are there for Disclosure and transparency getting the most from Financial Statements Code Compliance Value for Money statements Third party review

19 Audit and Risk Importance of appropriate systems for business assurance Separate Committee responsible for audit Board still has overall control unless specifically stared otherwise Board has overall responsibility for Risk management and must review individual and combined risks

20 Linking Governance and the Regulatory Framework What s the message? Added emphasis on risk management, cash adequacy, and stress testing. Explicit about protecting Assets / Assets and liabilities Register Compliance with an adopted Code of Practice Do you feel like you are co-regulating do you respond positively to the message?

21 Board Culture the acid test is not whether the board is looking good its whether its being good. NED The right culture allows better conversations that matter Agreement through difficulties and perspectives. Its healthy to disagree disagreement is not disrespect Relationship between exec and non exec optimum balance between challenge and support Governing not complying

22 Effectiveness of Board processes : We need to think about governance now, make enough space for it as an issue NED The level and quality of information received The time to cover an agenda and the length of Board meetings The role of Executives at Board From knowledge transfer to great mutual expectations The tools to do the job -

23 Mergers why consider a Merger? Mergers are attractive if they offer transformative opportunities: Efficiencies Stock intensification / rationalisation Enhanced capacity for new homes Improved financial capacity Opportunistic - personality driven Avoid market decline changes in demand / product Failing organisation - need to avoid collapse

24 Principles applying to a Merger decision Is our charitable purpose best served by continuing as we are? Board must act in the best interest of the organisation what are the business objects? Look at the business streams, geographical location, stock dispersal and rationalisation opportunities Competition Cultural fit

25 What exactly is the Merger Code? High level governance document Focus around the first stages in board and exec considerations of the options Code that places boards centre stage in any initial considerations Document that places an emphasis on transparency in the process Document that focuses on the long term interests of the organisation and its beneficiaries 10 principles short and evolving.

26 Manage the risks, maintain the mission, be fit for the future Mobile: