Should there be time limits for how long a housing association chief executive should stay in post?

Last week there was an interesting debate on Twitter (although I don’t think Twitter is the place to have such a debate). The debate concerned the suggestion that there should be a maximum term for housing association chief executives, such as five or ten years.

Housing association Board members have a time limit, usually nine years, yet there is no limit for the time that a chief executive can you remain in post.

I should declare an interest here: I’m about to start my 16th year as chief executive at BHT. I’m always looking for a new challenge, but not one outside BHT. There is always so much to do here. The fact that I have been at BHT for over 32 years suggests that I do not spend time looking for my next promotion bringing with it a salary increase! (Either that or nobody else would have me!).

I think that longevity has something going for it. It means that you can be held accountable for the success or failure of a business plan. I am always sceptical when I see someone making bold announcements and publishing ambitious plans before moving on to a new organisation to do just the same, never seeing their plans coming to fruition or failing, for that matter.

Of course there is the risk that a chief executive might become stale. That depends greatly on the strength of their board. With robust accountability, and clearly defined objectives, a chief executive would not be allowed to remain in post, nor would they be allowed to oversee a declining or stagnant organisation. I personally cannot understand people remaining when they no longer have passion in their bellies to bring about positive change.

There is no right or wrong length for someone to remain. I accept that some chief executives can hang on for too long, sometimes standing still in neutral, waiting for retirement. But it must be down to the board to ensure that that doesn’t happen. Strong governance is the key.

In the twitter discussion, Tom Murtha wrote that most housing associations where he had been a statutory appointment had CEOs who had been around for too long and that they had weak boards. He said that he had suggested fixed terms some years ago but, “strangely” he said with some cynicism, most CEOs opposed the idea. (I guess I am reenforcing his experience!). He suggests a minimum term of five years and a maximum of 10 years, subject to strict annual review and accountability.

Paul Roberts, the chief executive at Newydd Housing, recalls that David Edmonds, when he was at the Housing Corporation, suggested a five year maximum term. Paul thought this would be a recipe for short-term decision-making and said that sustainable decisions and accountability are more important.

Alison Inman, the current President of the Chartered Institute of Housing, raised the issue of chief executives who are also board members. That is a debate for another time (although I agree that there is too strong a potential for conflicts of interest and the erosion of accountability).

Maddy Bunker said: “Just to be contentious, I don’t agree with fixed term CEOs. I have witnessed brilliant CEOs that have been around over 10 years“.

She is right when she asks whether CEOs could be on fixed term contracts so that boards can you give them their marching orders. I personally agree with that idea, but even within existing arrangements this can happen (although it usually has a hefty price tag attached to the Settlement Agreement).

I am persuaded by Matt Campion, chief executive of the Shepherds Bush Housing Group and a board member at Newlon Housing Trust, who suggests that boards should give fixed term contracts which can be renewed, or not, depending on performance. That, to me, sounds like the right approach.

When we have new board members at BHT, as part of their induction, I say that the three most important tasks that they will have in any year is to review the business plan, agreed the budget, and question whether I remain fit for purpose. I’m confident that the BHT Board would not hesitate to remove me when it felt that I was approaching my ‘best before’ date.

I hope that that time is still some way off, and that I will decide to go before I am pushed. I still remain as motivated as ever. In December, the Board agreed an exciting and challenging new Business Plan that has been eighteen months in the making. We have brought about changes during 2017 resulting in performance in all areas that has reached new highs, and a culture exists that encourages innovation and improvement (a culture shared at Board level, within the executive team, and throughout the organisation). Tenant and client involvement is reaching new levels and we have very exciting plans to take service delivery to new levels, drawing on best practice from within the sector but, crucially, from beyond.

A related but separate issue is the level of chief executives’ pay. I would suggest a cap on salaries so that chief executives do not go from one organisation to the next, securing ever-increasing levels of pay. I don’t go with the argument that salaries in excess of £300,000 are necessary to attract ‘the best’. I would cap salaries at, say, £150,000. That, in my opinion, is more than enough for anyone (and it is well, well beyond anything BHT pays). But that is a debate for another day.

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2 thoughts on “Should there be time limits for how long a housing association chief executive should stay in post?

  1. I agree about the pay cap and although I don’t disagree with the idea of £150k it seems to me that there is something of a false dichotomy when this is linked to the PM’s pay rate, they after all get an enormous publicly funded pension which is not the case for the voluntary sector. If a higher level meant that the idea was more widely accepted then it is worth asking the question. As for your time in office, what really counts is the effectiveness of the workers. Keep on keeping on!

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