The secret diary of a chief exec

On a Wednesday afternoon in early August, Julie Fadden was walking around the streets of Speke and Garston, in south Liverpool, with her staff, talking to her tenants and resolving issues on her estates. The chief executive of 3,500-home South Liverpool Housing was doing what she does on the first Wednesday afternoon of every month - even though her father had died early that morning.

‘Throughout the organisation, there’s a general rule that unless you’ve got holiday booked, you should avoid taking that Wednesday afternoon off,’ she explains. ‘That afternoon is for the public. It’s a chance for the staff to get together and we have other organisations coming to see us too. So for me to make myself absent and leave my directors in the lurch wouldn’t have been appropriate.’

Devastated though she was by her father’s death, Ms Fadden, who earns £100,000 a year, felt that as chief executive she had a responsibility that she couldn’t shirk - no matter how good the reason. ‘My dad would have expected it of me and I expect it of myself. No way would I expect any member of my staff who’d just lost a parent to come into work that day, but I’m the chief executive and that’s the difference.’

This is an extreme example of what sets the chief executive in a housing organisation apart from their staff, but it does shed some light on why the chief executives in Inside Housing’s salary survey are paid so much more than their employees. In some areas of the country, support workers can be paid as little as £13,750 per year, whereas the best paid housing heads can earn up to £331,250 like Jane Ashcroft, chief executive of Anchor. Even in small organisations it’s common for chief executives to pull in a salary that is well into six figures.

The great divide

Housing officers - who are paid anything between £18,000 and £32,000 per year, according to last year’s Inside Housing annual salary survey conducted by recruiter Hays Social Housing - find themselves dealing with difficult situations, intractable problems and not an inconsiderable amount of personal danger on a daily basis. They could, therefore, be forgiven for wondering what exactly the chief executive does to justify remuneration on such a scale?

The crucial difference between the chief executive and everyone else is that the buck stops with them. They bear responsibility for everything that happens within an organisation, from setting the long-term strategy and ensuring its financial viability to enuring operations run smoothly, the safety of housing officers and that tenants are well served. If any of these things go wrong, no matter how far down the organisation, it is the chief executive who pays the price. What’s more, being a chief executive can be isolating, with no colleagues to have a good chat with about their problems.

‘At any given moment, the chief executive has a hell of a lot to keep them awake at night,’ sums up James Tickell, director at consultant Campbell Tickell and former interim chief executive of Shaftesbury Housing Group, now part of 70,888-home Sanctuary Housing.

‘If there’s organisational fraud, even if it’s nothing to do with you, you’re responsible. If you’re managing homes for vulnerable people and someone is abused, ultimately you’re the named person, you carry the can. If a tenant dies because of a gas services problem, it’s the chief executive who can go to prison.’

And if the organisation goes bust, he adds, even chief executives who do not sit on the board are considered company directors under company law, ‘with all of the liability that brings’.

The X factor

The chief executive is also arguably the single biggest factor in the success or failure of an organisation. ‘The chief executive has got to create a culture that enables people providing services to flourish, and enables the business to thrive and be successful,’ says Ms Fadden.

‘If you take your eye off the ball, you put the organisation in jeopardy. You are responsible for everything in the company, and if you become aware that something isn’t working you have to step in and take action. When an organisation has difficulty, it is often down to the leadership.’

However consultative your management style, when a decision needs to be taken it’s you who has to take it - often putting your own career on the line. Ms Fadden became aware of a culture of bullying stemming from her senior team in 2007, so she decided to have a complete change in management.

‘I effectively lost all of the directors at one hit,’ she recalls. ‘That was a really, really difficult year, to have to take that decision and get rid of people you trusted.’

Ms Fadden had the support of her chair and the board in the matter, but the chief executive can’t take that for granted. ‘The board has a choice: they can either back the chief executive or they can decide it’s the chief executive they don’t want,’ she says.

Size matters

The bigger the organisation, the more people, tenants and money involved, and therefore, the bigger the risks - which partly explains why salary levels generally correlate with association size. The size of an organisation also makes a big difference to the day-to-day role of the chief executive, with operational duties replaced by strategy, politics and a higher profile the more it grows.

‘The chief executive needs to position the organisation so that it’s listened to at a political level,’ says Jonathan Magee, head of the housing practice at management consultancy Hay Group. ‘A lot of chief executives see themselves as ambassadors for the entire sector. At the next level down, you tend to have directors who are in charge of service areas, but the chief executive is the one thinking about what the world is going to be like in 20 years’ time.’

Mr Magee believes that government funding cuts will make the chief executive role harder, as well as the abolition of organisations such as the Tenants Services Authority. ‘Chief executives need to consider how they encourage innovation and get everybody passionate. As there is less money available, that’s going to become a much bigger part of the role because they need to deliver a lot more in different ways with
different resources. The big society has thrust housing associations into the limelight a bit more too. With ‘In business for neighbourhoods’ [a National Housing Federation initiative launched in 2003 to promote associations’ work in the community] it was a nice thing to do. Now it’s a must-do.’

Securing skills

There are other factors that push up chief executive salaries. The classic argument used to justify high and rising salaries in any sector is that organisations must pay what the market demands. Staff capable of filling the top role in any organisation are rare, so there will be a price war to secure their services, resulting in higher salaries. On the other hand, there is limited evidence of high turnover of chief executives driven by salary demands.

The bureaucracy needed to run a large organisation also plays a part: every layer of managers expects a higher salary than the one below, so the chief executive inevitably earns more.

But being the chief executive of a housing association involves a degree of complexity that wouldn’t necessarily exist in a commercial organisation of a similar size.

‘You have to look in several directions at once, and convince many stakeholders that you’re doing the right thing and that they can rely on you,’ says Don Wood, who was chief executive of 67,100-home London & Quadrant for 20 years. ‘You have to communicate with the regulator, lenders, local authorities, staff, residents, a whole range of other local stakeholders. You’re the focal point of the organisation, and you have to
create confidence in it. It’s your job and there is no one else to do it.’

Being the boss can make it difficult for chief executives to get the information they need. ‘You have to be terribly conscious that people may flatter you and tell you what you want to hear,’ says Mr Tickell. ‘Emotionally intelligent chief executives know that they can make mistakes and aren’t always right, and that the flattery isn’t sincere.’

One of the most difficult things to pull off as a chief executive may be the balance between accessibility and respect - you don’t want to scare people, but neither is it advisable to break down all boundaries. The chief executive can’t relax and take part in office activities to the same extent as everyone else - they have too much resting on their shoulders.

Indeed, for Mr Wood it’s the emotional burden of the role that defines it. ‘When I look back, the hardest thing is carrying the hopes and fears of a thousand staff. If you come in in the morning with a long face, they think something is wrong. That never leaves you in daylight hours - you might bump into a member of staff anywhere. If it’s not 24/7, it’s at least 16/7.

‘You don’t have to start talking about the corporate plan in the supermarket, but you’ve got to be cheerful, positive, you’ve got to say the right thing. Everyone is looking at you and wants you to do the right thing for the organisation. That’s a heavy responsibility.’

Have your say

You must sign in to make a comment