Amongst unclear legislation and a cost of living crisis, Housing Associations need to be on top of their governance now more than ever. There are several governance issues that the sector needs to be prepared for, heading into the financial year 2025.
As said by the National Housing Federation, “Governance is the framework at the heart of a successful housing association. It sets standards of leadership and control and helps the board to define values by which the organisation will operate”.
First, it’s important to define governance, so we can label what exactly governance issues could be that could affect housing.
What is Governance, and what are Governance Issues?
Governance comprises all aspects of leadership and decision-making. It is the structures in place that allow a leader in any organised body to rule or control or dictate actions.
Corporate governance is the system a company chooses to put in place concerning rules, controls and policies to enforce a standard of behaviour.
Governance issues are therefore anything that could impact an organisation’s ability to achieve good and effective governance, as well as the aspects of governance that companies and leadership teams need to be on top of this coming year.
Governance Issues for Housing Associations
For Housing associations, there are several governance issues to keep in mind that could impact the sector in the financial year 2025.
1. Compliance and Accountability
Maintaining accountability and compliance are going to be even more crucial aspects of governance for the Housing sector. If there is no accountability, a single department could make choices that jeopardise trust or lead to a loss of confidence from lenders.
It is crucial for the decisions made by each level of an organisation’’s hierarchy to be transparent to shareholders and the general public. Particularly in the social housing sector, accountability is an essential element for successful corporate management and vital for preserving trust with tenants.
Every Board is accountable to stakeholders and shareholders. Regular evaluations are necessary for Board members, executives, and senior leaders. Potential issues could require investigation, which underscores the importance of auditing and keeping detailed meeting minutes.
Conducting audits is crucial for ensuring compliance. It is vital that your Housing association has a clear audit trail at every stage, to enhance corporate governance and demonstrate accountability.
2. Transparency
Another governance issue that the Housing sector will be facing in the coming financial year is transparency. While similar to accountability, it is just as critical that the sector maintains this.
With legislation for the sector currently, especially in regards to ESG, being unclear and confusing, it is important that associations be as transparent as possible while regulations are uncertain. This means that no matter the possible legislatory landscape, your organisation can be sure you’re putting your best foot forward by being open with the public and with your tenants.
In order to maintain transparency, it is essential for businesses to accurately report their financial performance, including both profits and losses. Failure to do so can have serious consequences, such as damaging relationships with investors and risking penalties from regulatory authorities.
3. ESG and Governance
For the past year, the sector has faced numerous challenges in regards to ESG and its regulations, and this uncertainty isn’t going anywhere.
With the upcoming financial year looking just as unclear for Housing’s next steps in regards to ESG, it’s important to be on top of what you can control, and be flexible about the things you cannot. This is why ESG reporting is so crucial for the sector. ESG reports are also key for maintaining transparency and accountability, and ensuring good governance across your organisation.
The growing focus on ESG means that it’s crucial to feel prepared for what this changing landscape can bring in the future. With updates like the SRS 2.0, keeping on top of ESG reports can be tricky, but it’s important to be aware of and up-to-date with changes in the regulatory environment.
The Prime Minister’s announcement of a policy overhaul on plans to help cut carbon emissions left the sector in limbo, and the recent appointment of a new housing minister, the 7th since the beginning of 2022, means that regaining a sense of stability is more critical than ever.
Pushing ESG discussions forward and focusing on developing an effective reporting cycle will be crucial for Housing Associations to feel secure in the face of future uncertainty, and ensure good governance for the coming financial year.
4. Cybersecurity and Data Protection
Cybersecurity issues have always been a focal point for the Housing sector, and this coming year will be no different. When dealing with the general public and a lot of sensitive information, it’s a vital part of governance that all data is protected.
With the increasing complexity of cyber threats, it is crucial for Housing Associations to focus on safeguarding all digital assets and customer information. This includes consistently evaluating and enhancing cybersecurity plans, investing in strong security systems and employee training, and adhering to data protection laws like GDPR.
During times of rapid technological progress, it is important to understand how new technologies can affect an organisation. By staying knowledgeable and taking initiative, the sector can play a key role in promoting digital transformation efforts.
Cybersecurity is crucial to good governance for Housing organisations, and Boards of directors need to be aware of security risks. Cyberattack incidents are occurring with increasing frequency and can be devastating for any organisation.
Secure software is at the heart of maintaining cybersecurity for your Housing association, and it will be increasingly significant in the coming year to have the software that best protects your data.
5. Resilience and Crisis Management
It is essential for organisations to be ready for unforeseen obstacles, such as environmental disasters, economic downturn, and political upheaval. The last few tumultuous years have made one thing more clear than ever: organisations, especially Housing associations, need to develop resilience and adaptability.
This kind of tenacity is crucial for governance and will be even more important issues to consider in the coming financial year. Moreover, resilience and the ability to manage crises are crucial for the long-term impact and success of an organisation.
Board members are vital in creating crisis strategies and ensuring organisational strength. This involves recognising risks, setting up response procedures, and cultivating a culture that encourages flexibility and growth from challenges.
Housing associations need to find a balance between addressing current operational issues and working towards long-term strategic objectives. This involves having a deep comprehension of an organisation’s vision and priorities, how it is governed, and what needs to be changed or improved upon. Concentrating on both immediate crises, as well as future goals, means associations can ensure good effective governance on all levels.
Convene Can Help Improve Your Housing Governance
Convene is the leading Board Portal provider to the Housing Sector. We know that there are unique issues for Housing Board Members, especially when it comes to tracking actions and dealing with sensitive information.
With Convene you can track from start-to-finish complaints that are raised at Board level by using our Action Items feature which automatically reminds anyone of tasks set to them during the Board Meeting.
Convene also has the best security on the market. We offer AES-256 bit encryption, are CMMI-Level 5 compliant and fully GDPR compliant, so you can be sure that your data is always secure.
An essential part of corporate governance and the Regulator of Social Housing’s Code of Conduct is openness. Convene provides a complete audit trail for all your Board meetings, making it easier for you to provide evidence for decisions.
The software now also comes as an integration with Microsoft Teams, which provides the benefits of both Teams and a Board Portal.
Additionally, working with our vast number of Housing Industry clients, we have developed a new software tool, Convene ESG, to help you efficiently and effectively produce ESG reports.
With Convene ESG you can also input the data once and report against multiple different frameworks. This means you can provide lenders and your tenants with both a TCFD, RITTERWALD and SRS Report without repeating the work every time.
Convene ESG is designed for Housing Associations with the assistance of Housing Associations. Our Early Adopters discussed with us what they needed, and with their requirements we developed a tool that would help Housing Associations generate the best ESG reports possible.
If you’d like to learn more about how Convene can help your organisation achieve better governance, please do not hesitate to book a free demo today!
