In this article, Richard Murrall looks at the rules in respect of the responsibility of Board members and examines the way organisations and obligations differ depending upon their legal status.
There is currently no comprehensive system of legislation which clarifies or regulates the duties and responsibilities of board members or directors of social housing organisations, whether these are formed as industrial and provident societies, housing companies or registered charities. Each type of organisation is regulated to some extent, but no board member or director can confidently look to any particular source for comprehensive guidance.
Housing association board members have a range of responsibilities for ensuring the proper conduct of the association’s business, through their own actions and by monitoring the activities of the staff of the association, for which they receive no remuneration.
If the housing association receives public funds conferred by the association being a Registered Social Landlord (“RSL”), it will be subject to regulation by the housing corporation. The Corporation carries out a regular monitoring process examining the performance of each association and if an association’s board has failed to meet set standards of the Corporation, it has powers under the Housing Act 1996 to make statutory appointments to the association’s governing body.
Any association which is a member of the National Housing Federation (“NHF”) is expected to follow the NHF standard Code of Conduct. This Code includes recommendations on board structures and the conduct of board members. One key element of the Code is the requirement that staff and board members should not be involved in decision making in relation to issues about which they have a vested interest or conflict. This reflects the Companies Act approach to general corporate governance.
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