James Went and Phil Walton of the Penningtons Manches corporate team will be speaking at the National Housing Federation’s Company Secretaries’ Conference on 16 June 2015 at The Royal College of Surgeons, London. Their legal and compliance update will summarise the key legislative changes over the past year and predict the likely challenges for Registered Providers.
One of the outcomes of the revised Regulatory Framework of the Governance and Financial Viability Standard is that “governance arrangements shall ensure Registered Providers…adhere to all relevant law”. This is pretty challenging as it's a difficult enough task to know what laws you are supposed to be complying with.
And it is not getting easier. Over the last four years, there have been between 20 and 30 Acts of Parliament and in 2015 so far we have had 30 Acts so it looks like this could be a bumper year. In terms of volume, most legislation these days comes as a statutory instrument. The number of statutory instruments has been in excess of 3,000 for the last four years and we are running at around 1,300 so far this year.
Compliance with all relevant ‘law’ was a change from the previous framework which referred to all relevant “legislation” so you have to factor in common law as well - although that is something which organisations ought to be doing anyway. An example of common law that could affect a Registered Provider is the duties of charity trustees under charity law which are not codified in legislation.
Assuming you know all the law, you then need to ensure that this is communicated to the relevant parts of the organisation and that everyone then complies with it. Simple.
Sensibly, the Homes and Communities Agency (HCA) recognises that an isolated breach is not going to result in a breach of the Standard. The Code of Practice on the Governance and Viability Standard says: “To meet the required outcome on adherence to all relevant law boards should take reasonable measures to assure themselves of their compliance.”
What is important is that Registered Providers have reasonable processes and procedures in place to ensure that the organisation complies with the law, as much as is humanly possible. This is a similar idea to the adequate procedures defence in the Bribery Act with which organisations will be familiar.
The fact that the boards of Registered Providers will be required to certify compliance with the Governance and Viability Standard in their annual accounts is something which will bring to the fore the work required to comply with this and other aspects of the Standard.
We can expect that the company secretary will be asked some searching questions when the time comes for the board to sign off the certification of this year’s annual accounts. These may include:
- how do we monitor which legislation affects our operations?
- what procedures do we have in place to ensure compliance?
- what happens if there is non-compliance?
- how is non-compliance reported, remedied and how do we stop it happening again?
Answering these questions will require foresight to ensure that the right processes and procedures are in place.