Good governance – getting it right in changing times

By Léann Hearne · 1 December 2025

How Boards can respond to the Regulator of Social Housing’s Sector Risk Profile and lead with clarity, assurance and impact.

Anyone that is either on a Board or working with a Board right now in housing, is likely feeling the pressure. As the changes of regulation, laws and the economy begin to gradually roll out, it’s become clear that the expectation of Boards is bigger than before. The weight of personal responsibility is there for people who have undoubtedly joined a Board because they were drawn to the social purpose. So, what should they be asking?  What should they be doing?  What are the ingredients required to create a high performing Board, with an exceptional culture? And, importantly, what are the practical steps Boards can take.

Big asks.  Let’s start with the with the ‘why’……….

Why governance matters, and why now

The RSH Sector Risk Profile 2025 sets out a challenging landscape for the sector, with tightening financial capacity, rising cost pressures, building safety obligations, development risk, data and cyber threats, and increasing expectations of service from customers.  The message is clear; Boards remain ultimately accountable for how providers navigate these pressures and RSH clearly states that Boards are responsible: “Boards of private registered providers … should be alert and responsive to these risks.”

Good governance is not an administrative exercise, it is the framework that determines whether the business delivers for customers, maintains compliance and stays resilient in the long-term.

What are the core characteristics we see in Boards that get it right?

If you’re looking for the ingredients that make a good Board, then for me, it’s these:

• Clear purpose and prioritisation
  A Board that sets and regularly reviews its purpose, mission and strategic priorities.  It is explicit about its priorities and trade-off decisions, such as between new development and investment in existing homes, or between risk appetite and regulatory compliance. The Sector Risk Profile emphasises that “Boards will inevitably face difficult trade-offs”.
  
• Effective challenge and constructive scrutiny
  Board members bring independent judgement and will use that to ask the right questions, probing assumptions and testing mitigations. Never forget the power of a great question…. 
  There’s evidence of a culture of constructive challenge, not rubber-stamping, supported by a comprehensive assurance framework. Oh – and let’s not forget that support is important too.  Recognising strengths is as important as identifying any weaknesses.
  
• Risk awareness and forward-looking oversight
  Board uses the Sector Risk Profile as a trigger for discussion, asking things such as what are our counterparty risks, our development risks, external and internal financial pressures and where are our key data risks? Board will make sure that it is regularly horizon-scanning for emerging risks and will triangulate all the evidence around performance and risk.
  
• Customer focussed and transparency
  Boards that understand what their customers value, ensure transparency.  They make sure there is fairness and respect in how customers are treated, that services are equitable and that customers are heard. The Sector Risk Profile emphasises all of this, alongside service delivery and accountability.
  
• Strong financial stewardship and value for money
  Clear oversight of financial risks, including borrowing, liquidity, debt service and development risks. Value for money will be more than just a document; it will be an embedded business behaviour. The RSH has flagged that the sector’s financial capacity is under pressure, so Boards should be clear about their own capacity.
  
• Assurance frameworks used for continuous improvement
  The Board ensures assurance frameworks are embedded across the business, (internal audit, risk management, control environment, compliance monitoring). Then, they use the learning from complaints, regulatory findings, incidents and other business data – and become adept at adapting.

What board members should be doing

Board members play a central role in setting strategic direction and ensuring it remains financially strong, resilient and aligned to its purpose.  Once the business has a clear plan and knows its priorities, Board members should ensure that these reflect both the long-term interests of customers and fit within financial parameters – and should be reviewing them on a regular basis. This includes regular scrutiny of the business plan, risk appetite, liquidity and development exposure – all of which are areas highlighted in the Sector Risk Profile. 

Customers should be living in safe homes and be receiving a good service.  Board members must satisfy themselves that customer safety, stock condition data, performance measures and risk mitigations are robust enough to deliver the customer expectations.  Understanding customer outcomes is not simply good practice, it is a regulatory expectation. And Boards should use customer insight, satisfy action data and complaint trends to shape priorities and ensure fairness, transparency –  and that the voice of the customer is heard loud and clear. 

Effective governance relies on the Boards’s own capability and culture, setting the tone for openness, accountability and integrity.  Members need to have the right mix of skills and behaviours, and a strong Chair should then model the standards and ensure inclusive discussion and fair challenge.  A positive culture gives the business confidence to tackle difficult issues, to accelerate improvements and build trust with its customers, regulators and funders.

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Practical steps for Housing Board members

Here are some actionable steps that Board members can take:

Step 1 – Regular agenda review

Ensure each meeting agenda includes a strategic risk update tied to the Sector Risk Profile themes (e.g., financial viability, development risk, existing stock quality, data/IT risk, service delivery).

Step 2 – Risk deep-dives

At least annually, schedule a “deep dive” on one major risk area (for example cyber/data security, building safety, development cost escalation) with an executive-led session to challenge assumptions and mitigation.

Step 3 – Assurance map refresh

Review and update the assurance map – reconcile what controls exist, what assurance exists, and what gaps/weaknesses the Board should know about.

Step 4 – Data-led performance pack

Ensure the board pack includes meaningful lead and lag indicators (customer satisfaction, arrears levels, safety compliance metrics, cost per home, development cost variance) and narrative commentary on trends and issues.

Step 5 – Scenario & stress-testing

Work with the executive team, to test out scenarios such as an interest rate rise, a reduction in income or a major safety remediation cost, and review how resilient the business plan is.

Step 6 – Board skills and composition check

Regularly review the skills matrix of the Board in relation to the strategic objectives, and check succession planning and training needs.

Step 7 – Customer voice and equity review

Ask how customers’ voices are influencing strategy and service delivery, and ensure a fairness and equity lens

Step 8 – Culture assurance

Annually commission a culture and values review (e.g., via survey or independent review): Board should satisfy itself culture supports strategy and risk management.

Step 9 – External benchmarking

Use peer benchmarking and regulatory judgements and trends, to compare performance and highlight improvement areas.

Step 10 – Regulatory horizon scan

Schedule regular updates on regulatory change (consumer standards, building safety, data security) and assess readiness for emerging obligations.

Step 11 – Transparent stakeholder engagement

Ensure the Board monitors how the business reports to customers and other stakeholders, and addresses feedback.

Step 12 – Review of governance framework

At least annually, carry out a governance review: check standing orders, conflicts of interest, Board and Committee terms of reference, meeting effectiveness, skills audit, and check whether the Board is operating as intended.

We can help ….

If, after reading this, you have questions about your own Board or Executive Team, or whether you are responding to the RSH Sector Risk Profile 2025 in the best way possible, ARK can help.

We provide independent reviews, governance development, Board coaching, culture assessments and much more.  Our focus is practical, with clear diagnostics, workable solutions and support that builds long term capability.

If you’d like to discuss how we can help you move from compliant to confident, we’re happy to chat.

Learn about ARK

Take a look at some of our successful culture review projects below…