The British Property Federation (BPF) have recently introduced a code of governance (the Code) aimed at for-profit registered providers (FPRPs).

There is, of course, a model code of governance published by the National Housing Federation intended for not-for-profit housing associations. However, it did not properly provide standards that meet the needs of FPRPs. Similarly, the UK Corporate Code of Governance had been considered not to be wholly appropriate for the sector. As equity investment and the number of FPRPs in affordable housing is rising, the introduction of the Code provides a code of governance tailored to the particular characteristics and circumstances of FPRPs. It also reflects the growing maturity of the FPRP space and the importance of FPRPs in addressing the need for social housing.

Within this insight, we explore the key themes of the introduction of the BPF’s code of governance.

The Code focuses on seven key themes:

Leadership and strategy

The leadership and strategy section of the Code focuses on the promotion of the registered provider’s (RP’s) purpose and strategy, ability to exercise appropriate control over decisions, and a focus on sustainability plans.

Culture and values

This section of the Code gives attention to the RP’s culture - making safety of residents a priority, ensuring effective relationships with residents and key stakeholders and a mention of the board’s commitment to equality, diversity and inclusion (EDI).

Board composition and effectiveness

This section gives attention towards the characteristics of the board, specifically mentioning size, skills, diversity, process of appointments to the board and management of performance, development and succession. This section also mentions payment to non-executive directors and the level of remuneration for their roles.

Board roles and functions

This section focuses on the functions, roles and responsibilities of board members within a governance structure and the creation of committees to provide more scrutiny, control or oversight over specific areas.

Delivery of strategy and services

Under the Code this section covers the delegation of delivery to ensure coherent arrangements whilst the board remains with appropriate control, high quality homes and services ,and the board’s oversight of performance is effective and well covered. 

Integrity and probity

This section of the Code mentions the board, its members and organisation and that the FPRP is operating with a code of conduct in place, clear policies and procedures, and operating openly and with transparency. There is also mention of reporting and publishing arrangements relating to whistleblowing and the RP publishing confirmation of their compliance with the Code.

Audit and risk

The final section requires formal policies and procedures to be in place and transparency of these policies and procedures to ensure use of internal and external audit functions. There is also mention of risk management arrangements and responsibility of the board for compliance with legal, statutory, regulatory and constitutional requirements specific to that FPRP.

Conclusion

The introduction of a Code tailored to FPRPs is overdue and is designed to “fill the gap”. Once controversial, FPRPs are now becoming more mainstream and the implementation of a code of governance specifically for them highlights their growing importance in the sector. As traditional RPs are considering how they can continue to build properties in difficult financial conditions, the opportunity to partner with equity investors and FPRPs may be attractive. A full version of the Code can be accessed here.

How Capsticks can help

Capsticks can assist with the setting up of new FPRPs and the establishment of a variety of partnership arrangements between traditional RPs and investors or developers. If you have any queries around what's discussed in this article, and the impact on your organisation, please speak to Darren Hooker or Georgia Moon to find out more about how Capsticks can help.