Housing Association Board members must serve for a term of not more than nine years according to the National Housing Federation’s governance code which is reinforced by regulation from the Homes and Communities Agency.
Recent HCA Regulatory Judgements on Orwell Housing Association and Broadacres Housing Association have both cited failure to adhere to the nine year rule as part of the reasoning for governance standard downgrading.
But are we shooting ourselves in the foot by having this arbitrary time limit? We desperately need good Board members to cope with ever more complex and diverse housing association activities yet every year we kick some excellent, experienced people off our Boards.
Is it easy to find new Board members, to replace those who are leaving, who can understand their roles and understand the complexity of the business they are helping to govern? Well no – not in my experience and not judging by the number of consultants engaged in housing association Board recruitment and the amount of national advertising that is done.
It is discriminatory now to try to force employees to retire when they reach 60 or 65 years so why is it permissible to force Board members to retire after nine years?
Surely the key factor is determining how long a Board member should serve is their effectiveness as a Board member?
The NHF Code is rather weak on its reasons for the nine year rule mentioning ‘new members who can provide an independent challenge to long standing practices and thinking’. But Board members may be just as likely to accept long standing practices and thinking if they are relatively new than if they have been on the Board for years. I absolutely agree that Board members should be prepared and willing to challenge – long standing practices and, especially, the executive – but either Board members have this ‘skill’ or they don’t – it is not a by-product of length of service.
Housing association Board members should have a range of relevant skills. They should have their performance scrutinised, independently if necessary. They should have annual appraisals and they should not be re-appointed when their three year term ends if they are not doing the job effectively. And, of course, some Board members will want to leave when their term expires – they will have had enough!
But, if they don’t want to leave after nine years and they are doing a good job and they are challenging the Chief Executive and the other executives and they have relevant skills, knowledge and experience that is difficult to replace, then why should they be forced to retire?? Why should the housing association have to spend time and money trying (and maybe failing) to find someone as good as the person who has had to leave.
Surely, given the critical need for housing associations to have excellent Board members, it is time to review the logic and sense of this nine year rule.