The findings of a new study from Grant Thornton UK LLP found that 82% of the top 60 housing associations pay their board members. Sixty per cent specifically disclosed the amount paid to the Chair, down from 70% last year and the average Chair salary was £17,984.
Jenny Brown, Head of Social Housing at Grant Thornton, said:
"Remuneration is fast becoming the norm for all but the smallest housing associations. But is this right? It's my belief that the decision to pay is never black and white. The question of remuneration is ultimately one about values as well as money. Factors such as social objectives, financial objectives, location and many others need to be taken in to consideration before a decision is made about whether to pay. However, whatever the decision, it needs to be consistent across the board, with clear transparency about how much is paid, what is expected of the board and what benchmarks were used."
The "Eyes on the horizon" research, which assessed the quality of governance in the social housing sector, also identified that 92% of associations refer to their values, ethos or culture. An organisation's values can define anything from investment decisions to personal development plans.
Jenny Brown added:
"Setting strong values and following them leads to success because people join an organisation if they subscribe to its purpose and believe in where it is going. It is a powerful means for securing a talented board."
Other key findings include:
90% of top housing associations are fully compliant with either the National Housing Federation Code or the Corporate Governance Code. This is significantly higher than compliance in the corporate sector, where 61% of the FTSE 350 are compliant. Information given about board members is still very limited – for example 53% of financial statements provide the names of board members without an explanation of the role they play. Visibility of the skills base for board members is improving with 42% mentioning skills on websites (compared to 18% last year). Since 2013 housing associations have been required to provide a value for money statement in line with the Homes and Communities Agency's regulatory framework and accounting direction. Consequently there has been a substantial increase in the space dedicated to value for money in financial statements and 88% now clearly addressed value for money reporting requirements in all areas within their financial statements (up from 22% in 2014).
Jenny Brown concluded:
"High levels of full compliance are to be applauded but a note of caution is needed. The right tone from the top is also at the heart of good governance, which means governance of values and principles is just as important as following rules.
"The common factor in recent recommendations and requirements surrounding governance in the sector is that the board should take full responsibility for the actions of an organisation; that it should be in control.
"Too often leaders in the sector look to what others are doing before making decisions. Whilst benchmarking can be useful it would benefit the sector to celebrate diversity of thinking, encouraging boards to operate in the best possible way for the organisation and its people first, then looking to benchmark success second."