I’ve been lucky in my professional life to have experienced many different situations on both the executive and non-executive side of social housing. I’ve worked with a range of different personalities and learnt many things along the way. I’ve seen successes, scandals, wake up calls and shifting expectations through the lens of the Housing Corporation, the Tenant Services Authority (TSA), the Homes and Communities Agency (HCA), the Regulator of Social Housing (RSH) and the Housing Ombudsman. I have heard the strategic versus operational debate about the boardroom a thousand times.

Once when interviewing board members I heard a candidate describe the role of the NED Non-Executive Director (NED) as ‘“eyes in and fingers out’”. Over the years I’m not sure I’ve ever heard a better four words describe the role. The board should set strategy, culture and provide some supervision of operations. At the same time, we must give room for executive directors and managers to carry out their work. Though experience has taught me to add more nuance to this definition. As board members, we should ensure there is an effective Assurance Framework to allow opportunity for ‘eyes in’ on what matters and ‘fingers in’ when needed. Ultimately, there are no guarantees against human error, collusion, management override or events but a functioning assurance framework supported by the right culture and clear, focused data is a good place to start.

Why is this important? In my current NED role I’m Chair of a G3 / V3 organisation. This clearly hasn’t happened by design, but it did happen due to poor board oversight and should have been avoided. Problems arose initially due to a technical issue that no board member could have been expected to spot, a covenant compliance miscalculation (no eyes, so no fingers) but supported by a business environment that didn’t have an appropriate assurance culture or framework. What started as human error became embedded over years, unseen by the organisation or by lenders who had imposed the covenant and its calculation. The problem actually came to light by fluke (showing the assurance benefit of staff attending external events and networking with peers) but would have been avoided if the organisation had a functioning Assurance Framework. The testing of the calculations would have formed part of the external assurance scope. It wasn’t and the rest, unfortunately, is history.

What’s this got to do with getting the balance right? Although technical in nature, the issue had its root in the culture of the organisation and the lack of assurance checks that form part of the NED balancing act. The reality is that the example was just one of many things that weren’t right, all connected by a culture that didn’t invite appropriate scrutiny or provide the right information to the board and, therefore, prevented NED eyes from seeing what needed to be seen.

Luckily, culture starts in the boardroom and we as board professionals can address the imbalance of scrutiny. A good start is putting in place an appropriate assurance framework. This should be supported by good information that lets you see the wood from the trees and provides half a chance of both delivering effective strategy and seeing the relevant operational detail underneath.

I’m excited to explore these kind of issues with colleagues on day one of the Board Leadership Conference. Our peers are a great source of insight when it comes to recognising the imbalances in our organisations. It’s one of the ways I’ve been able to learn what I know about the boardroom and I look forward to continuing that journey at the event.

Matt is speaking on day one of the Board Leadership Conference.