National Housing Federation publishes new Code of Governance

Posted: 13/11/2020

Yesterday the National Housing Federation (NHF) published the final version of its Code of Governance 2020. The code emphasises the importance of:

• organisational culture;
• putting in place a framework for ensuring equality, diversity and inclusion within all housing associations; 
• environmental sustainability; and
• accountability to residents.

What has changed since the earlier draft?

We previously published an article setting out the key changes in the draft code published in August from the 2015 code, see here. There have been a number of changes from the draft code, including:

• inclusion of specific reference to the Board having insight into “complaints and concerns” of residents and customers. This ties in with the publication of the new Housing Ombudsman Scheme and Complaints Handling Code in September, our article on this can be found here;
• the requirement for policies to be adopted by each organisation in relation to financial, environmental and social sustainability has been removed. However, the importance of this is still entrenched in the code through the new requirement for boards to set financially sustainable plans with specific consideration in setting such plans for carbon neutrality,
• environmental sustainability and social sustainability;
• the requirement for organisations to have a separate ‘collaboration strategy’ has been removed and replaced with a requirement for an organisation’s overall corporate strategy (or similar) to contain consideration of cooperation, collaboration, joint working or formal partnership;
• removal of the obligation to include details of the chief executive’s remuneration in financial statements; however, details of the highest earner in the organisation (typically the chief executive) is still contained within an organisation’s accounts;
• adopters must also ensure that people with direct lived experiences of (or particular insight into) the communities served by the organisation are “meaningfully engaged in governance structures”; and
• generally, providing greater flexibilities in how boards provide information required under the code including in relation to accountability. There is also flexibility in the timings of reviews/reports in many instances, as this has now changed to “regular” rather than specific time periods.

Important to know

The NHF has called on all providers to adopt the code by 31 March 2021 with a statement of compliance to be included within 2021-22 annual reports. The ‘comply or explain’ approach has been retained. Organisations will need to prioritise a timetable to observe compliance with the code over the next 16 months.

The NHF also published accompanying detailed guidance and a compliance checklist. Smaller housing associations will be pleased to see specific guidance included on how the new code will apply to them.

A key change is that board member terms of office have been reduced from nine years to six consecutive years (usually comprising two terms of office). As such, organisations will need to review their board terms of office, consider board succession planning and carve out time in their 2021 AGMs for the appointment of new board members, where necessary.

Publication of the code follows the release of the NHF’s Together with Tenants charter’. While the code does not specifically require adoption of the Together with Tenants charter, the guidance confirms that it would be an “expedient” way to demonstrate accountability to tenants, residents and stakeholders.

If you have any questions or would like to discuss what the new code means for your organisation then please contact a member of the housing corporate and governance team.

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