Life on the open road
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New regulation gives housing association board members more freedom, says Emma Tarran, partner at Trowers & Hamlins
Registered provider board members and their responsibilities under the new regulatory regime have been the subject of considerable attention in recent months. I am often asked why that is. Has the law changed? The answer is ‘yes’ and ‘no’.
The law on board member roles and responsibilities is complicated. It varies depending on whether you are a board member of a company, industrial and provident society, or trust, and on whether your organisation is a charity or not. But none of this has particularly changed in recent months.
Regulation switchover
What has changed since April is that the Housing Act 1996 has been superseded, in relation to the regulation of English social housing providers, by the Housing and Regeneration Act 2008. Responsibility for regulation of housing associations has shifted from the Housing Corporation to the Tenant Services Authority (where it may or may not remain), and the parameters for regulation have changed. Crucially, this change also abolished for English registered providers paragraphs 2 and 3 of Schedule 1 to the 1996 act and their prescriptive prohibitions on payments and benefits to social housing provider board members and employees. The Housing Corporation’s general permissions, set out in Good Practice Note 3, were also abolished. This, together with the move to significantly less prescriptive regulation as a whole, has had a real impact on the board role.
Off the beaten track
It is as if running a social housing provider under the old regime was something like driving a tram. It had to be driven - someone had to be in charge - but it could only proceed along prescribed tracks. In the new world of registered providers, the tracks have gone. Now it’s more like driving a bus. OK, you have to stay on the road, but you can decide which route you take and which lane to be in. All of which demands more decision making and leadership from the driver.
In practical terms, each registered provider board, in driving the organisation, is going to have to make more decisions and harder decisions. For instance, how much will the board pay when agreeing terms with an outgoing executive? And in making those decisions, it is going to have to consider tough questions such as ‘is this permitted by charity law?’, the answers to which may not be easy.
This will inevitably demand more from board members. My advice would be to ask for as much support, advice and training as needed. One of the things we are doing is developing a forum for chairs, who will ultimately bear the most responsibility of all. This will offer a mix of legal and skills training, as well as a peer network. But all board members should consider what they need, both as individuals and collectively, to help them deliver in this demanding but essential role.
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