Mike Bruce: Not all Scottish RSLs are resistant to paying Board members

Mike Bruce suggests an alternative headline for Scottish Housing News, and offers an informative look at the question of board remuneration in the process.

Mike Bruce: Not all Scottish RSLs are resistant to paying Board members

Mike Bruce

Reading the recent article in which Kelly Adams of RSM considers the question of payment for board members in our sector, I was struck by just how a particular impression given of a fact can alter one’s perception.

The headline of the piece, quoting from findings of RSM in a soon to be published report on the health of the sector was ‘Scottish RSLs ‘continue to resist’ board remuneration’ and is a perfectly logical conclusion to draw from the numbers quoted. But pause for a moment and consider an alternative headline for the piece, which would be equally valid and, I would suggest, offer a more telling tale for contemplation in the sector. What about ‘Scottish RSLs increase consideration of board remuneration’?

As a chief executive in the sector who has been advocating the virtues of executive membership of boards and remuneration of some kind for non-executive board members for over 20 years now, I am in an almost unique place to read the mood music. I believe the alternative headline I suggest is more reflective of what is happening in the sector in Scotland.

Speaking at the recent SFHA Chairs conference on strengthening governance in boards I detected a definite change in attitude and again, I speak as someone who, in past appearances at similar forums, if I didn’t exactly need to have a car waiting outside with the engine running, well it certainly felt like it, such was the collective antipathy with which my views, and indeed those of the organisation I represent, were received. However the news that 5% of the sector are planning to pay non-executive board members is progress indeed because it means that at least seven other RSLs in Scotland have taken the view that payments of this nature are at least a legitimate strategy as the sector looks to bolster its governance in the face of the increasing regulatory responsibilities and obligations placed on present day boards.

I await with interest the full RSM report and sight of the details behind Kelly’s statement that “…more Scottish housing associations appear to be considering paying board members”. That is certainly the impression I have formed in my recent travels and discussions and the numbers behind this teaser of a statement will be telling.

The contrast with England, while noteworthy, is ultimately less important. Everyone knows that the genesis of housing associations in Scotland is different where the roots lie in community based organisations set up specifically to address local housing problems. Many of these organisations are still around today and they are quite entitled to take the view that the governance model on which they are based remains relevant for their purpose. Time will tell if they are able to justify that position in the new regulatory environment and that is how it should be.

Others though have no excuse. Many have transformed themselves into multi million pound businesses, creating hundreds of jobs in the process and collectively, bear loan portfolios stretching to hundreds of millions of pounds and attract millions of pounds in public money to pursue their goals. Quite simply, to unthinkingly eschew payment of board members to rely solely on a governance model based however honourably, on the concept of voluntarism, when they are the guardians of so much for so many, is in my view short sighted.

We are already as a sector having difficulty in recruiting board members – volunteers who can freely give up their time, so where do we think the ‘volunteers’ are going to come from in the future, from the next generation and the one after that, on whom we cannot rely to have the same undiluted motivation to get involved as their forebears did?

Do not misunderstand me; I am not saying payment is the great panacea for our sector. Pay board members and all our issues and challenges will be easier to face? That’s not how it works. But if we are to modernise our governance to meet the challenges that lie ahead then we have a duty to consider all possible options to improve and if some of those options involve payment of non-executive board members, or even re-assessment of the positions of senior staff in our governance arrangements (a move that would in itself assist in strengthening and populating boards) then that is what must be done.

We know the road to modernisation is a slow one but it is one that all in the housing sector must now travel, if only to test the validity of the faith the sector has hitherto placed in the voluntary model of governance for housing associations.

  • Mike Bruce is chief executive at Weslo Housing Management
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