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Why residents need to truly understand the purpose of governance
Residents’ lives are directly affected by the decisions made by around 10,000 board members whose job it is to oversee the management of their homes, writes David Levenson, founder of Coaching Futures
Governance is all around us. And although we might not know much about it, corporate governance leaves us cold. The issue is we don’t readily understand the purpose of governance, what it is and how we can relate to it.
But governance by its nature is everywhere – our workplaces, schools, shops, surgeries, hospitals, public services upon which our lives depend, and big businesses with which we interact daily, such as Google and Amazon. Our lives are being affected every day by decisions made by millions of people who serve on boards.
What purpose do these boards serve? Directors are not elected politicians, so who gives them the right to make decisions that affect us? These are not academic questions; they arise every time there is a large corporate failure or scandal involving senior executives or officials of a business or organisation.
In England, more than 1,600 registered housing providers own around 2.8 million social homes. Residents’ lives are directly affected by the decisions made by around 10,000 board members whose job it is to oversee the management of their homes.
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With over 30 years of experience in and around housing boardrooms, I have devised ‘10 steps to become a high-performing board’ and my purpose is to help housing boards navigate the increasingly challenging economic, regulatory, political and customer-centred expectations that they face today.
Step one is about understanding the purpose and role of non-executive directors (NEDs) on the boards of registered housing providers. Imagine walking up to the front door and peering through the peephole into somebody else’s house. We are curious by nature – think about how many reality TV shows are based around people’s homes. To satisfy our curiosity we could try peering through the peephole or letter box, but even if it opens enough to reveal something, all we get is a partial glimpse of what the owner will allow us to see.
Behind the boardroom door boards, like the enterprises they govern, there is plenty going on. Just as the size, layout and content of a house affect the people who live there, the variety of purpose, scope and scale of enterprises determine the environment for everyone who functions within it. Boards are not separate entities with their own homogenous cultures, and board members function in diverse ways to meet the needs of the enterprise and board.
The purpose of NEDs on housing provider boards is to bring an alternative perspective to that of the executive directors, although this isn’t always a contrarian perspective. The role of NEDs is to hold a balanced perspective on the continuum between determining strategic direction and the assurance function.
As with the relationship between the chair and chief executive, which needs to be always in balance, the ideal NED perspective is to ensure that different views are aired and debated in the boardroom.
Let’s return to the image of the board member peering through the company ‘peephole’, trying to catch a glimpse of what is going on inside the room. It might help to employ some tools, perhaps a 360-degree lens in the form of conversations with residents and with staff, at frontline and management level, or glasses with X-ray vision that enable NEDs to derive knowledge and insights from the volumes of data and information with which they are routinely confronted before board meetings.
From time to time NEDs need to find their own way to go beyond the boardroom. To achieve this requires the right combination of skills and attributes, in particular, the ability not only to ask the right question, but to pick the right moment to ask. It also requires willingness to raise a challenge, to operate with clarity, retain an open curiosity, and use one’s influence judiciously in and outside the boardroom.
David Levenson, founder, Coaching Futures
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