The board's role is to bring objectivity and detachment, offering a broader perspective as well as expertise and experience.
The Nolan Committee on Standards in Public Life, and more recently the Cadbury, Turnbull and Higgs reports recognised that fixed terms for members are crucial if a board is to maintain its independence from management so as to effectively monitor executive activity and to contribute to the development of strategy. These respected committees all ruled that board members should be appointed for specified terms and that reappointment should not be automatic.
The NHS has had a limit of nine years on board membership since the creation of NHS trusts. Why should board members at registered social landlords be any different?
Clearly, in order to fulfil their role, new board members must acquire the expertise and knowledge they need to discharge their responsibilities effectively. Although new members may have to learn about the work and culture of the organisation they join, appointing trustees with appropriate experience and expertise, and ensuring a continuous injection of fresh ideas and perspectives will give the board a comprehensive skills base to cover all its activities.
The unique quality of the trustee is that of objectivity, by being able to stand back from the day-to-day operations of the organisation. Limitations on terms of office reinforce board independence and prevent the potential for them becoming too cosy with management.
The National Housing Federation code of governance strives to produce guidelines for balanced, diverse and effective boards that demonstrate the principles of good governance, and that lead and control their organisations with proper accountability. Good practice across all sectors recommends regular review and renewal. Though many long-serving board members might perform their duties very well, isn't it time they woke up to what is happening in the interests of effectiveness, increased rigour and wider experience in UK boardrooms?
Source
Housing Today
Postscript
Dianne Jeffrey, chairman, Anchor Trust
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