For-profits urged to engage as new code of governance launched

It will be operated under a “comply or explain basis”, which means if a for-profit’s board has found it does not comply with an element of the code, it will have to explain why. 

Speaking to Social Housing ahead of the launch at Housing 2024 today, Greg Campbell, a partner at consultancy Campbell Tickell, who jointly drafted the code, said: “The code that we’ve drawn up is fairly rigorous and robust.”

One of the code’s principles is that a provider’s board should operate “openly and transparently”.

A landlord should publish “clear and up-to-date information about its board members, committees and governance, including the role of shareholders in its governance”, the code said. 

Mr Campbell added: “As you would expect for any code of governance, it will present challenges for the organisations that are signing up to it. 

“It would probably be a miracle to find something that works for absolutely everybody. But I’d invite them [for-profits] to have a look at the code and see what they think.

“Those [for-profits] that are committed to demonstrating best practice, engaging with the wider housing sector and meeting housing needs, I think they will see this as valuable recognition that they are here to stay.” 

Registered providers are required by the Regulator of Social Housing (RSH) to sign up to a code of governance, but the agency does not endorse any particular system. 

Mr Campbell said that any for-profit that signs up to the BPF code will be expected to self-report on its compliance to the RSH.

For-profits have experienced mixed fortunes in their dealings with the RSH to date. BlackRock-backed Heylo Housing was found non-compliant in 2022 after the regulator found “significant weaknesses” in the provider’s governance. 

However, Legal & General’s for-profit registered provider received top grades from the regulator of G1/V1 last year following its first assessment. Sage, backed by Blackstone, was awarded a G1/V2 grade last December. 

The for-profit sector in England has mushroomed in recent years with investors attracted by the relatively safe financial returns. 

A number of high-profile partnerships have also emerged, including G15 landlord Hyde linking up with M&G and, in a separate deal, with French insurance giant AXA.

The new code’s development was overseen by a steering group, which included representatives from Sage, Legal & General and Gresham House. 

Rob Beiley, chair of the BPF’s affordable housing committee and a partner at law firm Trowers & Hamlins, said the working group had been “very constructive and productive”. 

He told Social Housing: “Everybody has been absolutely front and centre that this needs to be a robust code with high standards. That’s a very deliberate and conscious decision.”

The idea of allowing significant amounts of private capital into the social housing sector has been criticised in some quarters. 

However, Mr Beiley previously said that the country’s housing need is “so acute” that “housing associations and local authorities need the firepower of the big institutions to really make a difference”.

Looking ahead, Mr Campbell said the code could be amended in the future.

“This document is not going to be set in stone forever,” he said. “The intention is to review it at a suitable point.”