Board Membership/Shareholding and Recruitment Policy and Procedure

Governance Pack Section 16 Livin Housing Limited Board Membership/Shareholding and Recruitment Policy and Procedure

Date Procedure Effective From: 18 December, 2008 Date of Last Revision: 29 February, 2012 Date of next review: By end of June, 2013 Equality Impact Assessed Part 1 Board Membership and Shareholding Policy and Procedure Part 2 Board Recruitment Policy and Procedure for refresh purposes:

• Introduction • (a) Tenant Board Members • (b) Independent Board Members

Part 3 Board Recruitment Policy and Procedure to fill a vacancy Part 4 Chair/Vice Chair of Board and Committees election and selection of Committee r

PART 1 BOARD MEMBERSHIP AND SHAREHOLDING POLICY AND PROCEDURE 1. The Board of Livin will be made up of 12 members (plus an option of up to 5 co-optees

who are not included in the term “Board member”). The Board would therefore comprise:

• 4 Tenant representatives • 4 Council nominees (no more than 5 Board Members shall be Local Authority persons) • 4 Independent members • Up to 5 co-optees in the event the recruitment process results in an identifiable gap in

skills a co-optee may be appointed to resolve that issue. Such a co-optee may be considered for permanent appointment when a future vacancy arises taking into account the procedures detailed in the remainder of this Policy. Co-optees will only be appointed in the event such an occurrence results in the total number of Board Members (for this purpose Board members includes permanent, vacancy holding and co-optee members) being 12

2. The Board will contain a balance of appropriate skills and experience in order to direct the

Organisation’s operations and monitor its performance in all areas of activity.

3. To this end, the Board will seek to ensure that it has the skills required to carry out its functions and will consider people with skills in the following areas:

• Legal

• Management

• Governance

• Social issues and community development

• Human resources

• Finance

• Management of information technology

• Business development

• Environmental Issues and Sustainability

• Service delivery

• Working with local authorities and voluntary agencies

4. It is understood that Board Members are likely to have at least one and probably more of these skills in order to provide the wide range of experience and expertise required given that the size of the Board is limited and the range of skills required is broad.

5. Additionally, it is the Board’s intention that it will endeavour to maintain a membership with

diversity in respect of race, sex and age, and without discrimination against any sections of the community.

6. The Board will seek to achieve a balance between experience on the Board and the need to renew membership.

7. The Board will seek to recruit suitably skilled people (including tenant Members) through an open and accountable process and in accordance with Parts 2 and 3 of this Policy and Procedure.

8. Board Members will be expected to subscribe to the Organisation’s values and to support the Organisation in meeting its objectives.

9. No application for Board Membership will be considered where this would infringe on the Organisation’s rules or where the Organisation would be compromised.

10. Each Board Member must demonstrate their ability to meet the following core requirements:

• Commitment to the principles of the social housing and care movements and the corporate values and aims of the Organisation;

• Acceptance of the need to put the Organisation’s interests before all others when undertaking Board business;

• Availability to attend Board meetings and other significant events, read Board and other relevant papers and share responsibility for corporate decisions; and

• Commitment to the principles of equality and diversity.

11. Continuation of Board Membership is subject to satisfactory individual performance assessments/appraisals which will be undertaken annually, along with an overall assessment of the performance of the Board as a whole.

12. All Board Members are required to complete an annual declaration of interest which includes declarations of any criminal convictions. The Rules of the Organisation provide specific circumstances in which an individual cannot become or remain a Board Member and this exists in conjunction with the Board Member Code of Conduct/Board Member Disciplinary Policy documents which provides guidance on illegibility/removal circumstances. The Organisation’s Probity Policy should also be consulted in the event of a Probity concern (ie connected persons definition/conflict of interests).

13. There will be no shareholders who are not Board Members. In this context, shareholders may include such bodies corporate as a local authority who will nominate representative Board Members. Any candidate either elected or selected in accordance with the Rules of the Organisation (whether by way of refresh under Rules D9 or D10 or to fill a vacancy – RuleD2.5) shall also apply to be a shareholder of the Organisation when making their application for Board Membership under Parts 2 and 3 of this Policy and Procedure. The application for Board Membership shall be taken as the supporting evidence of reasons and qualifications to be admitted as shareholders under the Organisation’s Rules. As an automatic consequence of the appropriate AGM approving appointment under Rules D9 or D10 or the Board filling a vacancy under Rule D2.5the candidate so appointed/confirmed/approved shall be admitted as a shareholder by the Board at its next meeting.

14. The following cannot be shareholders:

• A minor

• A person who has been expelled as a shareholder, unless authorised by special resolution at a general meeting

• A tenant who is in material breach of their Tenancy Agreement, ‘material’ being that which would warrant legal proceedings under the Organisation’s policies (see the Board Disciplinary/Removal Policy for further definition)

• An employee of the organisation or employee of any other body whose accounts must be consolidated with those of the Organisation, such as a subsidiary for example

• A Council Board Member

• A person who has been removed as a Board Member.

15. This Policy recognises that there are three categories of shareholder: the Local Authority (represented by those they appoint to act on their behalf); Tenants and independent Board Members (selected in accordance with the Board Recruitment Policy and Procedure at Parts 2 and 3 of this Policy).

16. When a Member no longer serves on the Board, he or she will automatically cease to be a shareholder in the Organisation.

17. The Board must be mindful of potential conflicts of interest which can arise where employees and or Board Members of other Housing Providers sit on the Organisation’s Board. Individuals who are employees and/or Board Members of other Housing Providers can provide an excellent source of relevant skills and expertise, but potential conflicts must nevertheless be managed. The Board should limit the number of Board Members and/or employees of other Housing Providers to a number which ensures that conflicts can be appropriately managed, and this should be assessed by the Board and/or Human Resources and Remuneration Committee from time to time and on a case by case basis.

PART 2

BOARD RECRUITMENT POLICY AND PROCEDURE FOR REFRESH PURPOSES:

Introduction (including comment on Council Member) (paragraphs 1-22)

(a) Tenant Board Members (paragraph 23) (b) Independent Board Members (paragraph 24)

Introduction 1 The Organisation has ultimate responsibility for the governance and performance of the

entire organisation. 2 Board members collective skills, experience, competencies and personal qualities must be

sufficient to meet the needs of an efficient and effective Housing Provider. 3 The Organisation will work closely with the Council to ensure that those nominated as

Council Board Members are chosen for the skills and experience that they can bring to the Organisation.

4 A Board Member shall not be re-elected to the Board if they have already served nine years

as Board Member. 5 New appointments to the Board will receive:

• Familiarisation meetings

• Written background information

• Access to the Organisation’s Sharepoint facility

• A Personal Development Plan (outcome of the Board Appraisal process) 6 As part of its familiarisation process arrangements will be made for new board members to:

• Meet with the Chief Executive and Executive Directors/senior managers;

• Meet with the Chair; and

• Have a tour of the Organisation’s offices and a visit to some of the Organisation’s properties with an opportunity to meet tenants.

7 New board members will receive the following written information:

• The Organisation’s Governance Pack

• Latest annual report and accounts

• Current financial plan and corporate plan

• The National Housing Federation’s Board Members’ Resource Pack

• Meeting timetable and current Forward Plan. 8 All new board members will be appraised and will receive a personal development plan

aligned to their individual training and developmental needs. Subsequent development activities may then include coaching and mentoring, attending conferences/seminars, attending training courses.

Succession planning

9 The Organisation will be proactive in looking at its future needs in terms of board

composition, skills and experiences, planning for, and where desirable, encouraging turnover in membership. It will ensure that it engages positively with constituent groups to facilitate those who may be encouraged to apply for vacancies in the future.

10 The board will respond positively to any initiative, as permitted within the Rules and

regulatory guidelines, to aid in the succession or filling of a vacancy of suitable board members.

Board Skills 11 Annually the Organisation will conduct an appraisal of existing board members to ensure

that they have the required range of skills and experience necessary to discharge their duties effectively.

12 To meet their responsibilities for the direction of the Organisation, board members should

have, or acquire, a diverse range of skills, competencies and experience. This should cover the following broad areas:

(i) Working as an effective team to take strategic decisions for social result

(ii) Direct knowledge of the needs and aspirations of the communities and clients served

(iii) General business, financial and management skills;

(iv) The external framework and operating environment for the social housing sector

generally and the Organisation in particular;

(v) Other relevant skills such as legal, property, development and public affairs (as detailed in Part 1 paragraph 3 of this Policy and Procedure).

Board member appraisal

13 The National Housing Federation Code of Excellence in Governance requires boards to

review the performance of the board members on an annual basis and as a whole regularly. 14 The Organisation’s Human Resources and Remuneration Committee will advise the board

on how to undertake individual and collective board member appraisal and will respond positively to any guidance from theregulator.

Possible methods include:

• Individual meetings with the Chair

• Individual meetings with an external facilitator 15 Depending on the outputs of such meetings, training programmes may be organised to

address identified training needs. If a board member’s contribution or performance does not meet the required standard of the Organisation, they may be invited to stand down or not be invited to put themselves forward for re-election.

Training and development for board members 16 Board members will be provided with induction training on first appointment and regularly

thereafter. It is the Organisation’s policy to encourage training both to develop personal skills and to broaden knowledge and understanding of all areas of the Organisation’s work and of the wider housing sector. It will be the individual responsibility of board members to ensure that they update their skills and participate in the training made available to them.

Length of service and age limits 17 A board member who has nine years of service will stand down at the AGM closest to the

end of their ninth year in office and not be eligible for re-election. 18 Board Members must be aged 18 or over. Equal opportunities and diversity 19 Board members will seek to achieve a balance within the board’s membership that reflects

the diversity of the communities within which it is working. It will also ensure that every opportunity exists to encourage individuals from a variety of diversity groups to join the board and fully participate in its activities. Board members should come from all walks of life and bring with them experience of business, voluntary or charitable organisations and other housing organisations.

20 The Human Resources and Remuneration Committee and Board will respond positively to

the TSA’s guidance in ensuring that equality and diversity performance is at the heart of good governance and management.

21 The Human Resources and Remuneration Committee will take positive action to recruit and

retain members where under representation is identified. Practical steps to ensure this happens will include advertising vacancies amongst local community diversity groups and publications.

22 The Human Resources and Remuneration Committee will monitor and evaluate the success

of any new recruitment and retention initiatives. Those members retiring under Rules D9, D10 or D11 can stand for selection/election in accordance with the process detailed in 2(a) and (b) below provided they comply with paragraph 17 in not having served for 9 years. The Board will receive a report sufficiently in advance of an AGM engaging the retirement process and will then pass a resolution confirming those areas of experience and knowledge they require the forthcoming recruitment process to pursue.

Part 2(a)Tenant board members (refresh)

23 The Organisation requires the involvement of tenants through its Board structure and believes that tenant board members make a significant and valuable contribution to the work

of the Organisation. Tenant board members bring not only a customers’ perspective to Board and Committee discussions and decision-making but can also bring other skills and experience often linked to employment or voluntary work in the community. Tenant Board Members shall neither be a local authority person nor an independent shareholder. The election process, in accordance with the Organisation’s Rules, which will be followed to appoint Tenant Board Members, shall be as follows:

(i) During the 6 month period leading to the relevant AGM at which a Tenant Board

Member is to be elected the following process will be followed:

(ii) April an article will be placed in the Tenants‘ Newsletter inviting applications by interested residents with a deadline date for submission of the end of the first week in May. In the event no tenant newsletter is published in April alternative methods of invitation may be considered.

(iii) Second week in May an application and information pack is posted out, on request, to

be completed by the interested tenant candidate. The Prospective candidate shall make an application in accordance with Part 1 paragraph 13 of this Policy and Procedure document for shareholder membership in addition to their application for Board Membership. Such an application should comply with the Organisation’s Rules but can be a simple letter of request together with payment of £1 which will be returned if the application to be selected for election/elected does not result in appointment to the Board. The Statement/application for Board membership will be accepted in support of the shareholding application and there is no need to file separate evidence.

(iv) An eligibility criteria form must be signed by every candidate and this will ask the

candidate to confirm they comply with the Organisation’s Rules: These cover issues such as (this is not a comprehensive list but indicative):

• Confirming that they are an assured tenant or leaseholder of the Organisation and

are not a local authority person or an independent shareholder • Confirming whether they have been convicted of an indictable offence within the last

5 years or of an offence which in the opinion of the Board would bring the Organisation into disrepute.

• Confirming they are not a minor

(v) All applications received by the deadline, which will be the end of the last week in May,

will be reviewed by a meeting of the Tenant Interview Panel in order to ensure they meet the criteria for tenant membership as defined in Part 1 of this Policy/Procedure. Those that successfully meet the criteria will proceed to take part in a workshop (facilitated by an independent organisation and arranged by the Organisation’s secretary) prior to interview by that Panel accompanied by an independent/external facilitator who will provide professional guidance and assistance on the process. Such interview will assess the skills of the individual candidate to determine whether they fit the competencies required by the Board. Once the interviews are completed, the Panel will agree which candidate it elects.

(vi) The Panel may also indicate, particularly for the purposes of Part 3 (1)(i) of this

document, which other unsuccessful candidates it would be happy to add to an “approved list” in the event a vacancy arises. The approved list will only remain valid until the AGM following their inclusion on the list or such other period as the Board

determine but no longer than the second AGM after listing and cannot be used to appoint under refresh provisions.

(vii) Once the Panel elects the results will be presented to the Secretary in order that he can

announce the result at the appropriate AGM. The Secretary will approach the elected candidates to obtain their acceptance of the Board Member position subject to the announcement at AGM.

(viii) The new Board Member/s will automatically be appointed Board Members with effect

from the end of the appropriate AGM without any further formality. Part 2(b) Independent board members (refresh) 24 Generally, the Organisation’s approach to the recruitment and appointment of Independent

board members involves advertisements being placed in newspapers, trade journals, etc. and a selection process whereby applicants are short-listed and interviewed by the Human Resources and Remuneration Committee with a view to recommendation by that Committee of appropriate candidates to the Board for appointment. If at any point the Committee determine it would be more efficient and beneficial to the Organisation to delegate the short-listing process externally it shall have authority to do so.

25 The Board does have the power to veto any recommendation from the Committee although

that will usually only be in the most exceptional case. The timetable shall be flexible but in order that sufficient time is available to conclude the recruitment exercise it should commence no later than 6 months in advance of the appropriate AGM which is to confirm the appointment. The Committee meeting at which candidates are interviewed with a view to recommendation shall be sufficiently in advance of the Board Meeting immediately prior to the appropriate AGM (to enable the Board to make recommendations to the AGM in accordance with the Rules of the Organisation).

26 The process which follows is flexible and can be amended by the Human Resources and

Remuneration Committee should it deem it appropriate to do so but is indicative of how the process should be followed in the vast majority of cases:

(i) Independent board members shall be recruited through a process of advertisement

and/or by using an appropriate database (such as that kept by the National Housing Federation). Such Members shall neither be a Council Board Memberor a tenant or employee of the Organisation.

(ii) Advertisements shall be placed in national, regional or local newspapers or trade press

as appropriate. The advertisement may be given to professional trade bodies for circulation to their members to assist in attracting candidates with specific skills identified as being required by the board. This may include, but is not limited to, the Chamber of Commerce, Chartered Institute of Housing, Royal Institute of Chartered Surveyors, Law Society, etc.

(iii) Candidates known to existing board members or senior officers within the Organisation

through a variety of networks, as having the appropriate skills and experience may be contacted and invited to respond to the advertisement. These candidates shall be evaluated in the same manner as all other candidates. Should there be a personal relationship with an individual board member that member shall be excluded from any decision making in relation to the recruitment of that candidate.

(iv) Potential candidates who express an interest will be sent a Board Member Recruitment Pack and invited to apply for the position. Included in the pack will be details of skill requirements for new board members.

(v) The application form will require that the applicant demonstrate how their skills and

experience will be of benefit to the board, what contributions they will be able to make, contact details, age, and equal opportunities and diversity monitoring information. The applicant must also make an application to be admitted as a shareholder in the same manner as prospective tenant Board Members and as referred to in Part 2(a) above at paragraph 23(iii).

(vi) The Human Resources and Remuneration Committee will assess the applications

received against the specific requirements of the Board Member positions to be filled

(vii) Short-listed candidates will meet the Human Resources and Remuneration Committee and/or any independent recruitment body appointed by that Committee for an interview.

(viii) Candidates must disclose whether any of their activities or Memberships of other

organisations might lead to a conflict of interest with the Organisation’s work. They must also disclose during the recruitment process any issue which may automatically prevent them being admitted as a Shareholder/Board Member, more particularly defined in the Rules of the Organisation at C6 or D8.

(ix) The Human Resources and Remuneration Committee will then make recommendations

to the Board meeting no later than that immediately prior to the appropriate AGM (x) The Human Resources and Remuneration Committee may also indicate, particularly for

the purposes of Part 3 (2)(iv) of this Policy, which other unsuccessful candidates it would be added to an “approved list” in the event a vacancy arises. The approved list will only remain valid until the AGM following their inclusion on the list or such other period as the Board determine, but no longer than the second AGM after listing, and cannot be used to appoint under refresh provisions.

(xi) All independent board member appointments are subject to confirmation at the next

AGM of the Organisation when they will be endorsed by the board to the shareholding members. Upon appointment as a full member, a share shall be issued to the new independent board member. Once an individual ceases to be a board member they automatically cease to be a shareholder.

PART 3

BOARD RECRUITMENT POLICY AND PROCEDURE TO FILL A VACANCY

1 Tenant Member Vacancy

(i) It will be appropriate for those candidates involved in the most recent election process

under Part 2(a) and appearing on the approved list mentioned at Part 2a paragraph 23 (vi) to be approached (and re-interviewed by the Tenant Interview Panel if more than one name appears on that list)to fill a tenant Board Member Vacancy in accordance with Rule D2.5 of the Organisation’s Rules. Any appointment is subject to Board approval and in the event only one name appears on the approved list the Secretary will report to Board seeking their approval to appointment of that individual.

(ii) In the event there is no tenant candidate in accordance with (i) above then the Tenant

Interview Panel shall follow a direct or indirect election process but the Board has the final say on appointment (rather than AGM) being mindful of Parts 1 and 2 of this Policy and Procedure at all times

(iii) If a Tenant Member is appointed under Rule D2.5and they wish to be re-appointed at

the AGM at which they are due to retire they shall automatically be entered into the election process detailed within Part 2(a) from Part 2(a)(iv) of this Policy and Procedure without the need to follow the steps leading up to that provision (subject to ratifying the details they originally filed in support of their application to fill the vacancy remain accurate).

2 Independent Vacancy

(i) In the event a vacancy arises which is not due to refresh in accordance with Rule D10of the Organisation’s Rules the Human Resources and Remuneration Committee, or Board depending on the urgency, should follow the steps laid down under Part 2(b) of this Policy and Procedure, being mindful of Parts 1 and 2 at all times.

(ii) It will be for the Committee or Board to determine the timescales in such circumstances

mentioned in (i) above. (iii) It is also open to the Board/Committee in appropriate circumstances to fill a vacancy in

accordance with paragraphs 9 and 10 of the Introduction to Part 2 of this Policy and Procedure (by way of Rule compliant succession planning outside of the procedures of Parts 2(a) and 2(b)).

(iv) It is appropriate for those candidates involved in the most recent refresh process under Part 2(b) and appearing on the approved list mentioned at Part 2(b)(x) to be approached (and re-interviewed by the Human Resources and Remuneration Committee if more than one name appears on that list) by the Secretary to fill an Independent Board Member Vacancy in accordance with Rule D2.5of the Organisation’s Rules. Any appointment is subject to Board approval and in the event only one name appears on the approved list the Secretary will report to Board seeking their approval to appointment of that individual.

3 Re-appointment at next AGM

It is important to note that any Board Member appointed under the vacancy provisions of the Organisation’s Rules will only hold office until the conclusion of the term of their appointment under Rule D2.5 Such members can be re-appointed (subject to the rules on maximum terms of service) .

PART 4

CHAIR/VICE CHAIR OF BOARD AND COMMITTEES ELECTION AND

SELECTION OF COMMITTEES 1 The Chair holds office in accordance with Rule E(or until they resign as Chair or cease to be

a Board Member). It is the first item on any Board agenda where there is no Chair or they are not present that one be elected.

2 The Chair shall at all times be a Board Member and cannot be an employee in accordance with the Rules of the Organisation.

3 The Chair may be removed at a Board meeting called for that purpose provided a resolution

is passed by at least two thirds of members present at the meeting. 4 The process for election of a Chair shall be as follows:

(i) Chair appointed but not present/Chair resignation

(a) The Vice Chair shall automatically take the Chair in such circumstances. In the event the Vice Chair is unavailable those members present at a meeting shall elect, by a simple majority, a Chair for the purpose of the meeting/decision at hand. That election shall only have effect for the duration of the meeting/decision at hand. The same provision shall apply at Committee meetings.

(b) The same process will apply as detailed in paragraph (a) above in the event the

Chair resigns. The Organisation’s Rule E2 will be adhered to in all such circumstances.

(ii) Election of Chair and Vice Chair (succession strategy) in accordance with the

Rules of the Organisation The Board Members will be asked to nominate their preferences for Chair of the Board

and such nominations must be seconded. This process will occur at the Board meeting immediately following the AGM.

A ballot will occur in the event there are more than 2 nominees put forward for Chair. In the event there is only one nominee that nominee shall become Chair without further debate.

In the event there is more than one Board Member nominated then the Board shall indicate to the Secretary whether they wish to have a show of hands or secret ballot. The votes will be counted by the Secretary who will announce the result (a simple majority being required) before the Board agenda continues.

Vice Chair

The Vice Chair will be elected by the Board after the Chair is appointed (in the event the Vice Chair’s term has expired). Nominations will be sought immediately after appointment of the Chair as mentioned above (which will require a seconder). In the event of a contest the same process of ballot will occur as for the Chair/should there be no contest that nominee will be appointed Vice Chair.

Committees, and their Chairs and Vice Chairs

Committees will be appointed to by the Board once the process of Chair/Vice Chair of the Board appointment has been completed. As the refresh under the Rules of the Organisation (detailed in Part 2 of this Policy and Procedure) results in there being no certainty as to who the Board Membership will be made up of until the AGM concludes it is not possible to appoint to committees etc until after the AGM (and consequently not until the Chair/Vice Chair of Board and committee members are appointed and therefore that will be the sequence of events annually).

Seconded nominations will be required from all Board Members (not simply from the relevant Committee members) for appointment of Chairs and Vice Chairs of Committees from their membership. The same process of ballot will occur as in relation to the Chair/ballot of the Board and be decided by a simple majority of the Board.

Board Membership/Shareholding and Recruitment Policy and Procedure

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