YHN Board - 19 September 2017 agenda by Your Homes Newcastle

YHN Limited Tuesday 19 September 2017 at 5.00 pm YHN House, Benton Park Road, Newcastle upon Tyne NE7 7LX Contact Officer: Jill Davison

â&#x20AC;&#x201C; Tel: (0191) 278 8624 Email: jill.davison@yhn.org.uk

AGENDA Page No Introduction Items Please remember to switch off mobile phones 1.

Welcome and Apologies for Absence

Declarations of Interests

Chair's Items

Items for Approval 4.

Minutes of 8 August 2017

1-6

Matters Arising and Action Log

7-8

Appointment of Chair and Vice Chair

9 - 12

Appointment of Asfaleia Limited and Abri Trading Limited Directors

13 - 16

Committee Terms of Reference and Membership

17 - 38

Schedule of Meeting Dates

39 - 42

10.

Independent Remuneration Panel Report

43 - 54

Board Introduction Session 11.

Presentation by Executive Team

Your Homes Newcastle Limited. Registered in England and Wales Registration Number 5076256 Registered Office: Newcastle Civic Centre, Barras Bridge, Newcastle upon Tyne NE1 8PR. A company controlled by Newcastle City Council

To exclude the press and public during discussion of remaining agenda items because of the likely disclosure of confidential information. The definitions of what is considered confidential are contained within Section 16 of the Company's Standing Orders Protect - not for publication Items for Approval 12.

Confidential Minutes of 8 August 2017

55 - 58

13.

Matters Arising and Action Log

59 - 60

14.

Date and Time of Next Meeting 5-00pm, Tuesday 28 November 2017 in The Board Room, YHN House, Benton Park Road, Newcastle upon Tyne, NE7 7LX

Board 8 August 2017 (5.10pm to 6.25pm) Present: O Grant (Chair), L Doherty, V Dunn, D Huddart, I Graham, J McCarty, A Mirza, P Scope, L Stephenson, J Streather In attendance: A Baker

Governance Support Officer

J Davison

Company Secretary and Group Governance Manager

T Drury

Managing Director

M Foreman

Customer Services Director

C Hewitt

Partner, Wardhadaway (minute ref. 571 only)

D Langhorne

Assets and Development Director

C McMullen

Housing Policy & Commissioning Team Manager, NCC

S Reed

Interim Company Secretary

J Ritchie

Finance and Commercial Director

A Senior

Head of Fairer Housing, NCC

N Shukla

Chairman, Asfaleia Limited (minute ref. 569 only)

566

Welcome and Apologies for Absence

Apologies were received from P Dibbs, P Dutton, T Moore, M Page, E Snaith and M Talbot. 567

Declarations of Interests

Those councillors present declared an interest in all matters pertaining to Newcastle City Council. P Scope declared an interest in Wardhadaway law firm. V Dunn declared an interest as a trustee of the Tyne & Wear Pension Fund and as a Board member of Leazes Homes. J Streather also declared an interest as a Board member of Leazes Homes. 568

Chairâ&#x20AC;&#x2122;s Items

The Chair welcomed J Davison back as Company Secretary and Group Governance Manager and thanked S Reed for his work as Interim Company Secretary, particularly in relation to the internal governance review working group earlier in the year.

569

Asfaleia Limited Annual Report 2016/17

N Shukla presented the report on activities in 2016/17. Asfaleia had shown strong performance in the year, with five of six performance targets exceeded and the sixth - apprentices moving onto education, training or employment – only just missed. The key focus for the Board was ensuring that outcomes were clear and the delivery of services which make a difference for customers’ lives. It had been very pleasing to see the Employability team win the North East CIPD award, and the judging panel noted they were very impressed with the innovative work. The review of Ostara services had been necessary and beneficial, in that an action plan was now in place to increase customer numbers and improve the technology offer. Gordon Burns was thanked in particular for his contribution to the Board and to the Group Audit Committee. The Chair noted they were proud of the continuing work in homelessness prevention in partnership with Newcastle City Council. The focus overall would continue to be on outcomes and performance to date bodes well for the future. T Drury, M Foreman and their teams were thanked for their continuing support. J McCarty echoed these sentiments and thought that there was a need to tell the ‘good news’ stories more widely, as Asfaleia was a striking example of joint working. The Chair noted that the new YHN Board would find the report helpful and thanked N Shukla for Chairing and leading the Asfaleia Board. J Streather wondered whether YHN and Asfaleia were leaders in this field. T Drury advised that other housing organisations did similar things but often on a much smaller scale. Asfaleia could perhaps do more in terms of submissions for awards. Its work with Afghan interpreters was, for example, probably unique. RESOLVED, the Board agreed: 

To receive the annual report

570

Service & Strategy Delivery Committee Annual Report 2016/17

D Langhorne advised that, in light of the new governance arrangements, the committee had now been wound up. Throughout the past year, it had considered a wide and diverse range of reports and reviews. In particular the improved position on energy performance had been highlighted, in consequence of an array of initiatives, spanning insulation to installation of solar panels. The Chair thanked committee members for their input and engagement over the year. RESOLVED, the Board agreed: 

To receive the annual report

571

Health & Safety: Responsibilities of the Board

The Chair introduced a presentation by C Hewitt, Head of Company Commercial, Wardhadaway, noting that the Board had always taken its Health & Safety responsibilities seriously, as demonstrated for example by its response to the

Lakanal fire in 2009. The safety of residents had always come first, with the financial implications to be resolved as a separate matter. The presentation embraced the corporate and individual responsibilities of the Board and directors under the Companies Act 2006 and the Health and Safety at Work Act 1974, including responsibilities to those outside the organisation and the liabilities of senior managers, not just the Board. The risks of consent, connivance and neglect in the health and safety field were outlined. The array of sanctions under the Health and Safety Act was highlighted, including the powers of the courts to ‘name and shame’ organisations. The Corporate Manslaughter and Corporate Homicide Act 2007 ran in parallel to the Health and Safety Act and brought a corporate duty of care and gross breach of this could result in significant financial penalties. Again, senior management could be found culpable, not just the Board. The third strand of health and safety obligations stemmed from common law and the offence of gross negligence manslaughter, which could attract a wide range of sentences, including custodial. In light of all of these obligations, it was vital that the Board ensured that a robust mitigation strategy was in place. This could be underpinned by appropriate indemnity and insurance cover, including Directors’ and Officers’ Indemnity cover, which was available in a number of formats. However, it was not the sole solution and having the right health and safety management structures and processes in place was even more important. L Doherty enquired about the liabilities of retired Board members. There was to some extent a tapering off of liability after leaving an organisation but this was not instantaneous. The quality and timeliness of appropriate advice, taken by a Board in good faith, was key. I Graham wondered whether insurance was effectively just ‘bolting the stable door’. It was clearly not a mitigation strategy in its own right but an important addition to a wider, coherent approach to health and safety. D Huddart emphasised the importance of annual review of applicable policies. The Chair summed up and noted that there was currently a designated director who sat on the health and safety committee and this would continue to be reviewed annually. Risk was highlighted in every Board report and there was Directors’ and Officers’ insurance in place, with a ceiling of £2 million per claim. The Chair thanked C Hewitt for his presentation. 572

Q1 2017/18 Performance

J Ritchie presented an overview of what had been a challenging start to the year. Of the eight targets, two were on track. Of the other six, four were close to profile but two were rated ‘red’ and these both related to void rent loss. The success of the Treetop Village scheme in Walker had contributed to the worsening position due to increased transfers from other properties in Walker.

With regard to gas safety, only one planned inspection had not been completed during Q1 but had been undertaken very shortly after the close of the quarter. D Huddart highlighted the issue of access to leaseholders’ premises to conduct inspections. V Dunn noted the reducing profitability of the furniture service. J Ritchie explained the circumstances behind this and advised that a new strategic target would need to be agreed with the incoming Group Board. RESOLVED, the Board agreed: 

To receive the report and note the current position

573

Minutes of 20th June 2017

The minutes were agreed to be a correct record and were signed accordingly. 574

Matters Arising/Action Log

Under Matters Arising, T Drury advised of progress with the governance review. Interviews for Board appointments had been held recently and decisions were imminent. The shadow Board would agree the Terms of Reference for the new committees. The action log was received and agreed. 575

Tenancy Agreement - changes

M Foreman reminded the Board that YHN was the managing agent of tenancies on behalf of Newcastle City Council. The statutory consultation on proposed changes to the tenancy agreement had been very effective and largely supportive. Key issues identified had included the proposed move from 49 to 52 weeks payments; and the use of personal data. Cabinet was to consider the proposed changes in September, with implementation in April 2018 if agreed. L Doherty asked how the payments system had been resolved with regard to moving to 52 weeks. J Ritchie advised that there was one system but it was possible for tenants to build up credit towards ‘weeks off’. V Dunn noted that the 52 week payments would cause issues in the performance monitoring profile if tenants paid in advance and chose to be in credit. M Foreman agreed that the mechanics of performance reporting and the profile would need to be re-looked at. J Streather noted that the gardening service was expensive and this could become an issue in light of the proposal for tightened controls on garden maintenance. T Drury thought that the latter would need a pragmatic approach, not just blind reinforcement of any regulation. The service was however an opportunity for improvement and enhanced income generation. D Huddart added that there was similar scope for YHN to undertake works such as dropped kerbs and the construction of car ports. D Langhorne advised that undertaking these works brought issues around planning permission and the current terms and conditions for YHN staff made it unlikely that a price-competitive service could be offered. I Graham highlighted issues of occupants who were younger than the age specified for tenants in certain age-controlled blocks. This was potentially a breach

of the current tenancy agreement. C McMullen thought that this could be addressed in a review of the allocations policy. RESOLVED, the Board agreed: 

To receive the report and commend the proposed changes to Cabinet for implementation

576

Appointment of a Company Secretary

The proposal to revert from J Ritchie to J Davison as the registered Company Secretary was received. RESOLVED, the Board agreed: 

To resign J Ritchie as Company Secretary and appoint J Davison and notify Companies House accordingly

577

Annual Report and Accounts 2016/17

J Ritchie advised that the Group Audit Committee had considered the annual report and accounts in detail and recommended them to the Board for formal approval. A key change since that Committee had reviewed the accounts on 13 July had been the revaluation of the pension liability under FRS102. The pension fund was in credit and the employer contribution had increased only marginally in the year in consequence. The external auditor, EY, had given an unqualified audit opinion. J Ritchie noted that the audit process had been very smooth this year and thanked the teams which had worked on the annual reports and accounts across the group. It was noted that the Boards of Abri Trading Limited and Asfaleia Limited had both approved their respective annual reports and accounts for 2016/17. Attention was drawn to the volume of reserves, which had been discussed at the Board away day on 20 June. It was proposed to increase these to £3.1 million. RESOLVED, the Board agreed:  

To approve the group annual report and accounts for 2016/17 To approve an increase in reserves to £3.1 million

578

Delegated Decisions

RESOLVED – that the schedule was received, for information. 579

Slavery and Human Trafficking Statement

D Langhorne advised the Board of the need for all organisations with a turnover exceeding £36 million to ensure that the supply chain did not encourage or support

any form of coercion, trafficking or slavery; and a statement to that effect needed to be signed by a director and made publicly available each year, via the website. RESOLVED, the Board agreed: 

To approve the statement for publication

580

Exclusion of Press and Public

RESOLVED – that in accordance with the organisation’s Access to Information provisions, the press and public were excluded from the meeting during the consideration of all further agenda items.

……………………………………….. Board member 19 September 2017

YHN Board Meeting, 19 September 2017 Action Log (Public) Minute ref.

Action required

By whom

Target date for completion

Current status

576

Update Company Secretary details at Companies House

Jill Davison

22 August 2017

Completed

579

Slavery and Human Trafficking Statement to be signed and published on YHN website

Tina Drury

31 August 2017

Completed

Delivering great services, enabling people to live in great communities, supporting a great city

Your Homes Newcastle Board 19 September 2017 TITLE

Appointment of Chair and Vice Chair

AUTHOR

Jill Davison, Company Secretary

COMPANY

Your Homes Newcastle

ACTION REQUIRED

For Approval

SUMMARY

Members are asked to formally approve the appointment of the Chair and Vice Chair of the YHN Group Board

DELIVERY PLAN OBJECTIVE

1. Keep the housing stock decent and neighbourhoods clean and safe. 2. Collect the rent and let properties efficiently 3. Promote health and well-being and support vulnerable people to enjoy independence.

STRATEGIC RISK REGISTER

NUMBER & TITLE LIKELIHOOD

GR12: Ineffective governance of YHN Group

IMPACT

3 - Moderate

FINANCIAL / VALUE FOR MONEY IMPLICATIONS

CUSTOMER IMPACT / VIEWS EQUALITY & DIVERSITY CONSIDERATIONS

3 - Moderate

The remuneration of the Chair and Vice Chair is accounted for in the current Board budget. The level of remuneration has currently been reviewed by NCC independent remuneration panel. NA NA

Your Homes Newcastle Appointment of Chair and Vice Chair 1.

Purpose of report

1.1 The purpose of this report is to seek Board formal approval for the following appointments: 1.1.1 Appointment of Jo Boaden (Jo Totton – official married name) as Chair; and 1.1.2 Appointment of Joyce McCarty as Vice Chair. 2.

Background information

2.1 The external governance review, conducted in 2016 and agreed by the Board in March 2017 contained two key recommendations with regard to Board appointments; 



In order to facilitate the move to a smaller board and also to move away from representation of constituencies towards a board built upon skills and competences appropriate to the successful conduct of the business of YHN group, it is recommended that current YHN Board members, including the Chair, all resign and, if they wish and their length of service allows, re-apply for membership of the new common purpose board. Implement an open and transparent process for the recruitment, selection and appointment of YHN Board members, which would begin with the appointment of the YHN Chair by the shareholder. Then an interim Nominations Committee would be established, comprised of the YHN Chair, joined by at least one representative of the shareholder (likely to be a Council-nominated Board member) and the Managing Director, to oversee the recruitment process for Independent Board members. As the new board becomes established, it will run in “shadow” form until the AGM in September 2017.

2.2 Following the endorsement of the recommendations, Olivia Grant notified her intention not to re-stand as Chair of YHN. Recruitment 2.3 In April 2017, recruitment of a new Chair began. The recruitment and selection process was assisted by Campbell Tickell. The role of the Chair was advertised nationally in the Guardian and locally alongside headhunting by Campbell Tickell using their extensive networks. There was an excellent response with 13 applications received. 6 candidates were interviewed.

The interview panel included Pat Ritchie, Chief Executive of NCC, Joyce McCarty, Council Board member, Eamon McGoldrick Chief Executive of National Federation of ALMOs and Radojka Miljevic, Campbell Tickell. 2.4 Interviews were held at the end of May, and the successful candidate chosen was Jo Boaden. Appointment 2.5 Article 32 states; (1) The Board shall appoint the Chair but any such appointment shall require and be subject to the written approval of the council. Article 33 states; (1) The Chair will hold office from the date and for the term specified in the resolution of appointment. Such term is not to exceed three years. 2.6 Article 34 (3) states; The Board may appoint up to two vice or deputy chairs to act in the absence of the Chair on such terms as the Board shall think fit. 3.

Issues and concerns

3.1 Written approval from Newcastle City Council has been received with regard to the appointment of Jo Boaden. Please note the appointment at Companies House will be in Joâ&#x20AC;&#x2122;s official married name Jo Totton. 3.2 The role of Chair will be subject to an annual appraisal conducted by the Chief Executive of NCC. 3.3 A report taken to the Shadow Board on 8 September with regard to the vice chair appointment was fully endorsed. 3.4 The role of Vice Chair shall be subject to annual review and the appointment made at the first meeting following the AGM. 4.

Conclusion and recommendations

4.1 Board are recommended to: a) Appoint Jo Boaden as Chair of YHN for a term of three years b) Appoint Joyce McCarty as Vice Chair for a term of one year Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Davison by telephone on 0191 278 8624 or email jill.davison@yhn.org.uk

Delivering great services, enabling people to live in great communities, supporting a great city

Your Homes Newcastle Board 19 September 2017

TITLE

Appointment of Asfaleia Limited and Abri Trading Limited Directors

AUTHOR

Jill Davison, Company Secretary

COMPANY

Your Homes Newcastle

ACTION REQUIRED

For Approval

SUMMARY

Board members to agree the proposed directors for YHN subsidiary companies.

DELIVERY PLAN OBJECTIVE

STRATEGIC RISK REGISTER

NUMBER & TITLE LIKELIHOOD

GR12: Ineffective governance of YHN Group

IMPACT

3 - Moderate

FINANCIAL / VALUE FOR MONEY IMPLICATIONS

CUSTOMER IMPACT / VIEWS

EQUALITY & DIVERSITY CONSIDERATIONS

Your Homes Newcastle Appointment of Asfaleia Limited and Abri Trading Limited Directors 1.

Purpose of report

1.1

The purpose of this report is to appoint directors to the subsidiary companies of the YHN Group.

Background information

2.1

In October 2015, YHN created a group structure with a trading subsidiary constituted as a company limited by shares, Abri Trading Limited and a charitable subsidiary constituted as a Community Benefit Society, Asfaleia Limited. Abri Trading Limited

2.2

Following the external governance review and the working group recommendations it was agreed to introduce a common purpose board for YHN and Abri Trading Limited. The business of the two companies will be conducted in separate parts of the same meeting, so YHN Board members will be involved in discussions relating to Abri Trading Limited business, to ensure strategic oversight of the subsidiary company.

2.3

Whilst the business of Abri Trading will be conducted at the same meeting, there is still a requirement for named directors to be registered at Companies House to represent Abri Trading Limited.

2.4

The Articles of Abri Trading Limited with regard to directors states; 20. Appointment and removal of directors 20.1 Unless otherwise determined by ordinary resolution, the number of directors is not subject to any maximum and the minimum number is one. 20.2 Notwithstanding any other provision of these articles, the holder or holders of a majority in nominal value of the issued ordinary shares in the capital of the company may at any time and from time to time: 20.2.1

appoint any person to be a director (provided that any such appointment does not cause the number of directors to exceed a number fixed by or in accordance with these articles as the maximum number of directors); or

20.2.2

remove any director from office.

YHN are the holder of the majority of shares, therefore can appoint and remove directors.

2.5

The following Abri Trading Limited directors will retire with effect from 19 September as they also retire as YHN directors; -

2.6

The following YHN directors who will stay in the position as both YHN and Abri Trading Limited directors are; -

2.7

Ammar Mirza Tony Moore Phil Dibbs

Joyce McCarty Paul Scope

To ensure there are sufficient directors to vote on decisions at meetings and availability to sign contracts, it is proposed to appoint three Directors. Therefore YHN Board will be required to appoint one more director. It is proposed to appoint Malcolm Page. Asfaleia Limited

2.8

The Asfaleia Limited Board contains majority independent members along with representatives from the YHN Board.

2.9

The Asfaleia Limited Rules (D10) states; YHN may appoint any person as a Board member and may remove any Board member from office at any time.

2.10 The current Asfaleia Limited directors will retire with effect from 19 September; -

Nitin Shukla Alison Washbourne Gordon Burns Rachel Tshibuyi

2.11 During the recruitment process for YHN Board members, the following candidates were selected as independent members for Asfaleia Limited; -

Stephen Bramwell Rachel Taylor Dennis Hall

2.12 The following YHN Directors have been selected as YHN representatives on the Asfaleia Board; -

Helen Simpson Doreen Huddart

Conclusion and recommendations

4.1

Board are recommended to agree: a) To accept the retirement of the following Abri Trading Limited Directors; - Tony Moore - Phil Dibbs - Ammar Mirza b) The appointment of the following as Abri Trading Directors; - Malcolm Page c) The re-appointment of the following Abri Trading Directors; - Joyce McCarty - Paul Scope d) To accept the retirement of the following Asfaleia Limited Directors; - Nitin Shukla - Alison Washbourne - Gordon Burns - Rachel Tshibuyi e) The appointment of the following as Asfaleia Limited Directors; - Stephen Bramwell - Dennis Hall - Rachel Taylor - Helen Simpson - Doreen Huddart

Implementation

5.1

The Company Secretary will implement the registration and resignations of all Directors details with Companies House and the FCA Mutuals register.

Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Davison by telephone on 0191 278 8624 or email jill.davison@yhn.org.uk

Delivering great services, enabling people to live in great communities, supporting a great city

Your Homes Newcastle Board 19 September 2017

TITLE

Committee Terms of Reference and Membership

AUTHOR

Jill Davison, Company Secretary

COMPANY

Your Homes Newcastle

ACTION REQUIRED

For Approval

SUMMARY

Board members are asked to agree the proposed terms of reference for committees and the committee membership.

DELIVERY PLAN OBJECTIVE

STRATEGIC RISK REGISTER

NUMBER & TITLE

GR12: Ineffective governance of YHN Group

LIKELIHOOD

3 - Moderate

IMPACT

3 - Moderate

FINANCIAL / VALUE FOR MONEY IMPLICATIONS

CUSTOMER IMPACT / VIEWS

EQUALITY & DIVERSITY CONSIDERATIONS

Your Homes Newcastle Committee Terms of Reference and Membership 1.

Purpose of report

1.1 The purpose of this report is to seek approval of the proposed terms of reference and membership for the Board committees. This information was previously presented to members at the YHN Shadow Board meeting on 8 September for discussion. 2.

Background information

2.1 The YHN Board agreed to implement the following committees; -

Group Audit and Risk Committee Finance and Performance Committee Remuneration and Nominations Committee Customer Service Committee

2.2 Draft terms of reference were considered by the shadow board and amendments were made following input from the Board discussion. The additions were:   

To include twice yearly reports to Board on risk to the Audit & Risk Committee Include value for money in the remit of Finance and Performance Committee Re-write 1.3 of the Customer Service Committee purpose to ensure plain english

2.3 Appendix 1-4 set out the final committee terms of reference for approval. 2.4 Each committee will review their terms of reference annually and any further amendments will be brought to the Board for approval. 3.

Membership

3.1 The membership of each committee was discussed at the shadow board and the membership list is attached as appendix 5. 3.2 Membership of committees will be reviewed annually with each board member in their individual appraisals and confirmed at the first board meeting following the AGM.

Conclusion and recommendations

4.1 Board are recommended to agree: a) The terms of reference for - Group Audit and Risk Committee - Finance and Performance Committee - Remuneration and Nominations Committee - Customer Service Committee b) The membership of committees for 2017/18. Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Davison by telephone on 0191 278 8624 or email jill.davison@yhn.org.uk

Group Audit and Risk Committee Terms of Reference 1.

Purpose

The purpose of the committee will be: 1.1

to monitor the integrity of the company’s financial statements and announcements

1.2

provide assurance and challenge to ensure that there are proper systems and allocations of responsibility in key areas of the organisation;    

Internal audit; External audit; Internal control system, including Health and Safety; Risk Management framework.

Delegations

The committee will carry out the following duties on behalf of the YHN and Asfaleia Board: Financial Statements 2.1

Monitor the integrity of the financial statements of the Group and any formal announcements relating to the company’s financial performance, reviewing significant financial reporting judgements contained in them

2.2

Review the narrative included in the Strategic Report and Directors Reports, to be recommended to the YHN and Asfaleia Boards for approval Internal Controls

2.3

Review the Group’s internal financial controls and the internal control and risk management framework

2.4

Ensure that the Group has a robust risk management framework in place that is reviewed annually

2.5

Quarterly review of the Strategic Risk Register

2.6

Monitor and review the Group’s Health & Safety policy and arrangements. One committee member will be assigned Directorial responsibility for Health and Safety, to gain assurances for the committee and the main board that Health and Safety issues are given appropriate priority

2.7

Annual review of the Gifts and Hospitality register in relation to compliance with applicable policy and with the register of sales and purchase contracts to provide assurance of probity and transparency throughout the organisation

2.8

Monitor the Group’s policies on fraud, whistleblowing and bribery, anti-

corruption and anti-fraud arrangements 2.9

Review and approve the Annual Assurance Statement for NCC

2.10 Develop and implement policy on business continuity Internal Audit 2.11 Review and agree the internal audit work programme 2.12 Review and monitor management’s response and progress on the implementation of recommendations made by the internal auditors to address system weaknesses and improve internal controls 2.13 Monitor and review the effectiveness of the internal audit function External Audit 2.14 Monitor and review the effectiveness of the external audit function 2.15 Review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements 2.16 Recommend to the YHN Board the appointment, remuneration and terms of engagement of the external auditor 2.17 Develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm 2.18 Other:  review the terms of reference on an annual basis and recommend any necessary changes to the Board,  be provided with appropriate and timely training both in the form of induction for new members and on ongoing basis for all members,  give due consideration to all laws and regulations and the National Federation of Housing Code of Governance,  have access to sufficient resources in order to carry out duties, including access to the Company Secretary for assistance if required,  authorised to obtain, at the company’s expense, external legal or other professional advice on any matters within its terms of reference 3.

Matters reserved for YHN Board

3.1

Amendments to the committee terms of reference

3.2

Approval of the YHN Group Directors’ Report and Financial Statements

3.3

Approval of the Abri Trading Ltd Directors’ Report and Financial Statements

3.3

The following matters will be reserved to Asfaleia Limited Board: Approval of the Asfaleia Ltd Directors’ Report and Financial Statements

3.4

Appointment of External Auditors

Responsibility of committee members

4.1

Committee members will be expected to prepare themselves for meetings by reading the committee papers in advance. Where committee members are unable to attend a meeting, they should forward their views/comments on the matters to be discussed to the Committee Chair before the meeting with a minimum of 24 hours’ notice

4.2

The Committee must be satisfied that all figures presented to members and the outside world will stand up to scrutiny and can be relied upon. This requires Committee members not only to understand the financial statements and how they are made up, but also to challenge the Finance and Commercial Director and external auditors as draft accounts are produced

4.3

Committee members will be expected to take and seek opportunities to enhance their effectiveness through participation in induction courses, training and development programmes, and by increasing their knowledge of YHN and issues affecting the sector

Reporting to the YHN Board

5.1

Minutes of the committee meetings will be submitted to the YHN Board for information and the lead officer will present any areas that require Board attention

5.2

Where there are matters that (a) require YHN Board approval under delegations and/or (b) matters that have arisen during the course of the Committee’s work and require YHN Board’s approval, these should be reported to YHN Board as needed

5.3

Specific risk management items, where appropriate and necessary, will be reported more frequently, with a minimum of twice yearly reports to the Board. Any changes to the strategic risk register will be reported to the YHN or Asfaleia Board respectively.

Reporting between Committees

6.1

There may be occasions when Committee wishes a particular piece of work to be carried out that is not within these terms of reference. The Committee Remit Protocol should be used to make a request to the appropriate Committee

Membership

7.1

The membership of the Committee, including the Chair, will be five. Four members of the YHN Board and one representative from Asfaleia Limited

7.2

The nominated Chair will be an independent member of the YHN Board and not a council appointed member

7.3

The membership and Chair of the Committee will be proposed annually by the YHN Chair for agreement by the YHN Board at the first meeting after the

Annual General Meeting 7.4

The Committee will appoint a Vice Chair

7.5

The Chair of YHN Board and the Managing Director shall have a standing invitation to attend meetings where necessary

Frequency of Meetings

8.1

The Committee will meet quarterly and otherwise as required to align appropriately with financial reporting and audit cycles. The date and time of Committee meetings will be agreed by the Committee members where possible at least six months in advance of the meeting dates

8.2

Outside of the formal meetings, The Chair will maintain a dialogue with key individuals involved in the companyâ&#x20AC;&#x2122;s governance, including the Chair of the YHN Board, the Managing Director, the Finance & Commercial Director, the external audit lead partner and the Head of Internal Audit

Quorum

9.1

The quorum for the transaction of business at meetings of the Committee will be the Chair or vice chair and two Committee members

9.2

In the absence of the Committee Chair and Vice Chair, the remaining members present shall elect one of themselves to chair the meeting, of which will proceed provided that a quorum is achieved

10.

Lead Officer

10.1 The Lead Officer for the Group Audit and Risk Committee is the Director of Finance and Commercial, who will be supported at Committee meetings by their reporting officers as and when appropriate and necessary. The Lead Officer will nominate an Officer to co-ordinate the agenda and reports for each Committee meeting on his/her behalf 11.

Agenda Dispatch and Minuting of Meetings

11.1 The Councilâ&#x20AC;&#x2122;s Democratic Services Team will allocate a named Democratic Services Officer to support the Customer Service Committee 11.2 This Officer will a) dispatch the agenda and papers no later than five working days before the date of the meeting and b) minute meetings of the Committee 11.3 The Lead Officer will be responsible for making sure that the agenda and papers are sense checked before being provided to Democratic Services 11.4 Notices, agendas and supporting papers can be sent in electronic form where the recipient has agreed to receive documents in such a way

Finance and Performance Committee Terms of Reference 1.

Purpose

The purpose of the committee will be: 1.1

Establish a performance framework which enables YHN to proactively manage its financial and operational performance and ensure value for money

1.2

Undertake detailed scrutiny of in-year financial performance and medium term financial plans

1.3

Provide assurance to the Board regarding progress against the Delivery Plan targets set annually

Delegations

The committee will carry out the following duties on behalf of the YHN Board: 2.1

Review and monitor the in-year financial position (revenue and capital) against budget

2.2

Review and monitor the delivery of service reviews and transformation projects, including the use of the Transformation Budget

2.3

Review and monitor progress against the delivery of YHN investment activities

2.4

Review key financial health indicators, including cash flow and working capital

2.5

Where financial performance falls below target, review and challenge action plans to improve the financial standing of YHN

2.6

Review and scrutinise the development of the medium term financial plan, including stress testing

2.7

Review and monitor in-year performance against the key performance indicators and, where necessary, scrutinise supporting operational performance information

2.8

Where performance falls below target, review and challenge actions plans to improve poor performance

2.9

Review performance of YHN against Housemark and other national benchmark information

2.10 Review, scrutinise and challenge the development of the Delivery Plan for future years 2.11 Other: ď&#x201A;ˇ review the terms of reference on an annual basis and recommend any necessary changes to the Board, ď&#x201A;ˇ be provided with appropriate and timely training both in the form of

  

induction for new members and on ongoing basis for all members, give due consideration to all laws and regulations and the National Federation of Housing Code of Governance, have access to sufficient resources in order to carry out duties, including access to the Company Secretary for assistance if required, authorised to obtain, at the company’s expense, external legal or other professional advice on any matters within its terms of reference

Matters reserved for YHN Board

3.1

Amendments to the committee terms of reference

3.2

Approving the annual statement of accounts

3.3

Approving the Delivery Plan

3.4

Approving the Budget

Responsibility of committee members

4.1

4.2

Reporting to the YHN Board

5.1

Minutes of the committee meetings will be submitted to the YHN Board for information and the lead officer will present any areas that require Board attention

5.2

5.3

Specific financial or performance issues, where appropriate and necessary, will be reported more frequently

Reporting between Committees

6.1

Membership

7.1

The membership of the Committee, including the Chair, will be five. Four members of the YHN Board and one representative from Asfaleia Limited

7.2

The nominated Chair will be an independent member of the YHN Board and not a council appointed member

7.3

The membership and Chair of the Committee will be proposed annually by the YHN Chair for agreement by the YHN Board at the first meeting after the Annual General Meeting

7.4

The Committee will appoint a Vice Chair

7.5

The Chair of YHN Board and the Managing Director shall have a standing invitation to attend meetings where necessary

Frequency of Meetings

8.1

The Committee will meet quarterly. The date and time of Committee meetings will be agreed by the Committee members where possible at least six months in advance of the meeting dates

Quorum

9.1

The quorum necessary for the transaction of business at meetings of the Committee will be the Chair and two of the members.

9.2

In the absence of the Committee Chair and Vice Chair, the remaining members present shall elect one of themselves to chair the meeting, of which will proceed provided that a quorum is achieved.

10.

Lead Officer

10.1 The Lead Officer for the Finance and Performance Committee is the Director of Finance and Commercial, who will be supported at Committee meetings by their reporting officers as and when appropriate and necessary. The Lead Officer will nominate an Officer to co-ordinate the agenda and reports for each Committee meeting on his/her behalf 11.

Agenda Dispatch and Minuting of Meetings

Remuneration and Nominations Committee Terms of Reference 1.

Purpose

The purpose of the committee will be: 1.1

to review and agree on an annual basis the level of remuneration of the Managing Director

1.2

to make recommendation to the YHN Board on Board appointments

Delegations

The committee will carry out the following duties on behalf of the YHN Board: 2.1

Determine the remuneration package for the Managing Director within the terms of the agreed framework or policy. The Committee will make its decision after taking into consideration remuneration packages of other ALMOs, relevant Boards and Newcastle City Councilâ&#x20AC;&#x2122;s Executive Management Team

2.2

The Chair and nominated Committee Members will be the panel for the appointment of the Managing Director together with a representative of Newcastle City Council and a relevant external person

2.3

For appointments to the Executive Team, the interview panel will include (but not be limited to) the Chair of the Board and another member of Remuneration and Nominations Committee

2.4

Regularly review the structure, size, composition and balance of skills, knowledge, experience and diversity of the Board and make recommendations to the Board with regard to any changes, giving due regard to the outcomes of the annual board evaluation and appraisal process

2.5

Responsible for identifying and nominating candidates to fill Board vacancies as and when they arise, for the approval of the YHN Board

2.6

Satisfy itself with succession planning and talent development initiatives that processes and plans are in place with regard to both Board and senior appointments, in particular the Chair and Managing Director

2.7

Make recommendations to the Board concerning the re-appointment of any Board member at the conclusion of his or her specified term of office, especially when they have concluded their second term, having given due regard to their performance and ability to contribute to the Board in the light of the knowledge, skill and experience required

2.8

Make recommendations concerning any matters relating to continuation of office of any board member at any time including the suspension or termination of service

2.9

Establish the selection criteria, selecting, appointing and setting the terms of reference for any consultants who advise the committee

2.10 Other:  review the terms of reference on an annual basis and recommend any necessary changes to the Board,  be provided with appropriate and timely training both in the form of induction for new members and on ongoing basis for all members,  give due consideration to all laws and regulations and the National Federation of Housing Code of Governance,  have access to sufficient resources in order to carry out duties, including access to the Company Secretary for assistance if required,  authorised to obtain, at the company’s expense, external legal or other professional advice on any matters within its terms of reference 3.

Matters reserved for YHN Board

3.1

Amendments to the committee terms of reference

3.2

The appointment of the Managing Director

3.3

The dismissal of the Managing Director

Responsibility of committee members

4.1

4.2

Reporting to the YHN Board

5.1

The Chair will report to the YHN Board on decisions taken by the Committee, to make whatever recommendations it deems appropriate on any area within its remit where action or improvement is needed.

5.2

Reporting between Committees

6.1

Membership

7.1

Membership of the Committee will be made up of the Chair and Vice Chair of the YHN Board, the Chairs of Group Audit & Risk Committee and Finance & Performance Committee

7.2

The Chair of the YHN Board will chair meetings of the Committee

7.3

The Company Secretary and Group Governance Manager will act as Secretary to the Committee

7.4

The Finance and Commercial Director or their appointee will attend all or part of meetings of the Committee by invitation to advise on matters of remuneration/policy. The Managing Director and external advisers may be invited to attend for all or part of any meeting, as and when appropriate and necessary, except when the remuneration of the Managing Director is under discussion

Frequency of Meetings

8.1

The Committee will meet as necessary but is not expected to need to meet more than once a year. There might be a requirement for additional ad hoc meetings for the committee to consider new appointments

Quorum

9.1

The quorum necessary for the transaction of business at meetings of the Committee will be the Chair and two of the members

10.

Lead Officer

10.1 The Lead Officer for the Remuneration and Nominations Committee is the Company Secretary, who will be supported at Committee meetings by their reporting officers as and when appropriate and necessary 11.

Agenda Dispatch and Minuting of Meetings

11.1 Meetings of the Committee shall be arranged by the Company Secretary and Group Governance Manager at the request of the Chair 11.2 Notices, agendas and supporting papers can be sent in electronic form where the recipient has agreed to receive documents in such a way

Customer Service Committee Terms of Reference 1.

Purpose

The purpose of the committee will be: 1.1

to strengthen the tenant voice in terms of influencing the decision making within YHN

1.2

to understand and improve the customer experience

1.3

to understand new innovations in customer service and explore how YHN can use these to improve services

Delegations

The committee will carry out the following duties on behalf of the YHN Board: 2.1

Develop and monitor the YHN Customer Insight and Engagement Strategy and action plan

2.2

Monitor the delivery of the customer commitments as outlined in the Delivery Plan

2.3

Receive reports from NCC independent housing Scrutiny function and Newcastle Independent Tenant Voice and commission insight and engagement projects where performance is an area of concern

2.4

Review complaints trends, decide how from a business we learn from this and contribute to improvement plans

2.5

Understand the impact of Government changes on people living in our neighbourhoods and how YHN responds

2.6

Commission projects to understand the impact of YHN decisions on tenants

2.7

Understand YHN customer satisfaction and service performance and commission insight and engagement projects where performance is an area of concern

2.8

Monitor the social value of engagement

2.9

Liaise with YHN Board

Matters reserved for YHN Board

3.1

Amendments to the committee terms of reference

3.2

Approval of the Business Strategy and Delivery Plan

3.3

Approval of budgets

Responsibility of committee members

4.1

4.2

4.3

The YHN Board will hold two strategic away days per year, Committee members will be expected to attend one of these sessions for a half day discussion relating to customer service

Reporting to the YHN Board

5.1

Minutes of the committee meetings will be submitted to the YHN Board for information and the lead officer will present any areas that require Board attention

5.2

Reporting between Committees

6.1

Membership

7.1

The Committee shall comprise up to twelve members;  Up to nine NCC tenant members, one of whom will be nominated as Chair,  A nominated member of the YHN Board  One NCC tenant representative from Housing Scrutiny  One NCC tenant representative of Newcastle Independent Tenants Voice

7.2

The Chair and Vice Chair will be appointed by members by a vote at the inaugural meeting

7.3

The Chair of YHN Board and the Managing Director shall have a standing

invitation to attend meetings where necessary 7.4

Committee members should refer to the Person Specification for eligibility criteria

Frequency of Meetings

8.1

The Committee will meet four times a year. The date and time of Committee meetings will be agreed by the Committee members where possible at least six months in advance of the meeting dates

Quorum

9.1

The quorum for the transaction of business at meetings of the Committee will be the Chair and four Committee members

10.

Lead Officer

10.1 The Lead Officer for the Customer Service Committee is the Customer Service Director, who will be supported at Committee meetings by their reporting officers as and when appropriate and necessary. The Lead Officer will nominate an Officer to co-ordinate the agenda and reports for each Committee meeting on his/her behalf 11.

Agenda Dispatch and Minuting of Meetings

Committee membership from 19 September 2017 Group Audit and Risk Committee

Customer Service Committee

Richard Clark (Chair)

Finance and Performance Committee Malcolm Page (Chair)

Abri Trading Limited

Asfaleia Limited

Lisa Doherty

Remuneration and Nominations Committee Jo Boaden

Paul Scope

Joyce McCarty

Up to 8 tenant members

Joyce McCarty

Stephen Bramwell (Chair) (Independent) Rachel Taylor (Independent)

Paul Scope Kevin Lowry

Marion Talbot

Representative from housing scrutiny

Richard Clark

Malcolm Page

Veronica Dunn

Elaine Snaith

Representative from Newcastle Independent Tenant Voice

Malcolm Page

Stephen Bramwell (Asfaleia rep)

Rachel Taylor (Asfaleia rep)

Dennis Hall (Independent) Doreen Huddart (YHN) Helen Simpson (YHN)

Delivering great services, enabling people to live in great communities, supporting a great city

Your Homes Newcastle Board 19 September 2017 TITLE

Meeting Dates

AUTHOR

Jill Davison, Company Secretary

COMPANY

Your Homes Newcastle

ACTION REQUIRED

For Approval

SUMMARY

Board members are asked to approve the meeting dates scheduled for 2017/2018.

DELIVERY PLAN OBJECTIVE

STRATEGIC RISK REGISTER

NUMBER & TITLE LIKELIHOOD

GR12: Ineffective governance of YHN Group

IMPACT

3 - Moderate

FINANCIAL / VALUE FOR MONEY IMPLICATIONS

CUSTOMER IMPACT / VIEWS

EQUALITY & DIVERSITY CONSIDERATIONS

Your Homes Newcastle Meeting Dates

Purpose of report

1.1 The purpose of this report is to confirm the meeting dates of the YHN Board, Asfaleia Board and committees up to the AGM 2018. 2.

Background information

2.1 The dates for the meetings of YHN Board, Asfaleia Limited Board, Finance & Performance Committee and the Group Audit & Risk Committee are set out in appendix 1. These were previously presented to the YHN Shadow Board meeting on 8 September. 3.

Conclusion and recommendations

3.1 Members are asked to approve the meeting dates for 2017/2018. Contact Officer: If you have any questions about this report that you would like clarifying before the meeting, you can contact Jill Davison by telephone on 0191 278 8624 or email jill.davison@yhn.org.uk

Board and Committee Calendar 2017/18 Month September

Date Meeting 8 YHN Shadow Board 19 YHN AGM & Board

October

November 2016

7 16 28 Nove m 19

December 2016 January 20162016201 6 February

Timing 9.30-11.30am 4-7pm

Asfaleia Board

5-7pm

Finance & Performance Group Audit & Risk YHN Board

5-7pm 5-7pm 5-7pm

Board Away Day

9.30 – 4.30pm

23 25

YHN Board Asfaleia Board

5-7pm 5-7pm

13 20

Finance & Performance Group Audit & Risk

5-7pm 5-7pm

March

YHN Board

5-7pm

April

Asfaleia Board

5-7pm

May

15 22 29

Finance & Performance Group Audit & Risk YHN Board

5-7pm 5-7pm 5-7pm

June

Board away day

July

10 26 31

Group Audit & Risk Asfaleia Board YHN Board

5-7pm 5-7pm 5-7pm

August

Finance & Performance

5-7pm

September

YHN AGM & Board

4-7pm

*Please note that meeting dates can be subject to change.

9.30 – 4.30pm

Delivering great services, enabling people to live in great communities, supporting a great city

Your Homes Newcastle Board 19 September 2017 TITLE

Independent Remuneration Panel Report

AUTHOR

Jill Davison, Company Secretary

COMPANY

Your Homes Newcastle

ACTION REQUIRED

For approval

SUMMARY

Board members to receive the report of the Independent Remuneration Committee and agree the recommendations

DELIVERY PLAN OBJECTIVE

STRATEGIC RISK REGISTER

NUMBER & TITLE LIKELIHOOD

GR12: Ineffective governance of YHN Group

IMPACT

3 - Moderate

FINANCIAL / VALUE FOR MONEY IMPLICATIONS

CUSTOMER IMPACT / VIEWS

EQUALITY & DIVERSITY CONSIDERATIONS

Your Homes Newcastle Independent Remuneration Panel Report 1.

Purpose of report

1.1 The purpose of this report is to seek approval on the recommendations put forward by the Independent Remuneration Committee. The report was discussed and debated at the YHN Shadow Board on 8 September 2017. 2.

Background information

2.1

Newcastle City Council’s Independent Remuneration Panel (IRP) report is attached as appendix 1.

2.2 Further information supplied by Campbell Tickell with regard to payment to Asfaleia members is attached as appendix 2. 3.

Issues and concerns

3.1 The shadow board in its discussion on 8 September, reviewed the remuneration for YHN’s subsidiary Asfaleia Limited and the tenants participating in the Customer Service Committee. 3.2 There was significant debate and discussion with regard to the participation of tenants on the Customer Service Committee and various points for and against remuneration were considered. 3.3 The shadow board agreed to recommend no remuneration for the Customer Service Committee, but to keep the issue under review. 3.4 The issue of payment to the charitable subsidiary was discussed with regard to benchmarking what other charities and mutual societies remunerated and it was established there was a mix across the sector. 4.

Conclusion and recommendations

4.1 Board are recommended agree:      

to increase the level of allowance for the Chair of YHN to £12,000; to increase the level of ‘basic’ allowance for Independent Board members to £3,000, including Asfaleia members; to maintain the level of allowance for Chairs of YHN committees at £1,000, including Asfaleia Chair; to implement the new allowances from the Annual General Meeting in September 2017; and if requested, to consider a further strategic review of YHN allowances within the first two years of operation of the new Board. Keep under review the remuneration of Customer Service Committee members

DRAFT REPORT TO YHN BOARD 8 September 2017 Review of Your Homes Newcastle Board Allowances Report by:

Independent Remuneration Panel, Newcastle City Council

Ward Implications:

All

For Decision

Purpose of the report

1.1

This report summarises the work undertaken by the Independent Remuneration Panel (IRP) and sets out their recommendations on the level of the allowances for the new Your Homes Newcastle (YHN) Board members, including the Chair.

Recommendations

2.1

YHN Board is asked to consider the IRP’s findings as follows:     

to increase the level of allowance for the Chair of YHN to £12,000; to increase the level of ‘basic’ allowance for Independent Board members to £3,000; to maintain the level of allowance for Chairs of YHN committees at £1,000; to implement the new allowances from the Annual General Meeting in September 2017; and if requested, to consider a further strategic review of YHN allowances within the first two years of operation of the new Board.

Introduction and background

3.1

Newcastle City Council’s Independent Remuneration Panel (IRP) was asked by the YHN Board in May 2017 to undertake a review of Board Members Allowances, taking into account the recent Governance Review of YHN undertaken in Spring 2017.

3.2

Whilst the role of the Council’s IRP is clearly set out in legislation - under the Local Authorities (Members’ Allowances) (England) Regulations 2003, the City Council has to make a new Members Allowances Scheme before 1 April each year and it must have regard to the recommendations of its IRP before making or amending a Scheme – there is no direct scope within the legislation for the IRP to undertake allowances for other organisations. However, the IRP has an established track record in this area of work,

including leading the review of YHN Board allowances in 2009, which remains the basis for the current allowances scheme. As a result of that work, the IRP was asked to carry out this review, drawing on recent and previous experience. 4.

Findings

4.1

In undertaking the review, the IRP took into account the report to the YHN Board dated 10 March 2017, which set out a new governance structure for YHN to be implemented from the annual meeting in September 2017. The Panel noted that the governance review took into account recommendations from a governance improvement plan and new company structure set up in 2015/16, alongside changes in the operating environment due to welfare reform and the Housing and Planning Bill. A new 10 year management agreement was signed and a new Managing Director was appointed in June 2016. On that basis, the IRP understood that the original review of the YHN Board was undertaken to:    

ensure that it became more strategic in outlook; introduce a more agile governance structure; improve line of sight and level of scrutiny through the committee structure; and reflect best practice elsewhere in the sector.

4.2

In undertaking the review, the IRP received information on the role of YHN and how it had changed over the years and the new direction anticipated in the coming months and years. YHN is an Arm’s Length Management Organisation (ALMO) responsible for managing council homes on behalf of Newcastle City Council. It was set up in 2004 to manage council properties, to improve housing in order to meet the Government’s Decent Homes standard, and to provide a range of support services for Newcastle City Council. The portfolio includes 26,700 council homes, over 400 homes on behalf of Leazes Homes and the management of 1,500 leasehold properties on behalf of the Council.

4.3

The Panel met in May 2017 and considered a range of background information and particularly noted the key recommendations of the governance review, which included reducing the size of the YHN Board to no more than 12 members; configuring it as a “common purpose” board which would also take oversight of Abri; and that appointments would be based on skills and competencies. All current YHN, Abri and Asfaleia Board members and all committee members would stand down and, where existing terms of office allow, could apply for appointment to the new boards and structure. Newcastle City Council would make four of the appointments to the new YHN Board and the remainder would be independent members, including the Chair. The IRP also looked at their original report from 2009.

4.4

In between the Panel meeting and this final report, the IRP members were given access to the comparisons of Board allowances undertaken by recruitment consultants Campbell Tickell. The report from Campbell Tickell compared a number of similar organisations nationally. The

recommendations in this report are based on analysis of all of the above. Whilst the IRP has been undertaking this review, a new Chair of YHN has been appointed and the recruitment of Board Members is underway. 5.

Conclusions

5.1

Given the information and analysis undertaken by the IRP into the role of Board members, Panel members were keen to stress the level of responsibilities to be placed on the new YHN Board members as nonexecutive directors and the need to have the right arrangements in place to attract the right mix of experience, skills and competencies to lead the future strategic direction of YHN. Whilst the Campbell Tickell report compared average Board pay for providers which have similar objectives or level of complexity as well as other ALMOs, the IRP noted that the arrangements for YHN are particularly complex, with the potential for these roles and responsibilities to evolve further in future, particularly following recent tragic national events. The level of expectations on the new Board will reflect the new governance arrangements and the roles will be significantly different to those of the previous Board. As the Board is also smaller, this is likely to lead to a greater call on individual members’ expertise, time and skill. Whilst the external report recommended levels of Board remuneration at a higher level than those set out below, the IRP believes that the proposed changes set out in this report reflect local circumstances. 

Allowance for Chair of YHN. The IRP noted that, at the time of meeting, recruitment was ongoing for the Chair of YHN, based on an advertised allowance of £10,000 (subject to review). The panel discussed the level of the current allowance and noted the changes in direction and the impact on roles and responsibilities anticipated in the new arrangements. In conclusion, the IRP agreed to recommend that the allowance for the new Chair of YHN should be £12,000.



Board Members’ Allowance. As with the Chair’s role as set out above, the Panel noted that recruitment for seven Independent Board members would shortly be underway. Again, taking into account the anticipated changes in levels of responsibility of the independent board members and the new focus on specialist expertise and knowledge, the IRP agreed to recommend that the allowance for Independent Board members should increase from £2,000 to £3,000.



Allowance for Committee Chairs. The Panel discussed the roles of each of the four committees: Group Audit and Risk Committee; Remuneration and Nominations Committee (to be chaired by the Chair of the Board); Finance and Performance Committee; and Customer Services Committee (to be Chaired by a tenant). The IRP noted that two out of the four committees would need to be chaired by one of the Independent Board members. Taking into account the change in focus and remit from the previous structure, the IRP is proposing maintaining the level of allowances for committee chairs at £1,000 each. Taken together with the basic allowance of £3,000, the overall allowance for committee chairs of

£4,000 would stand at 1/3 of the allowance for the chair of the Board. 5.2

The Panel noted that the approximate cost of the allowances of the previous Board structure amounted to £40,000. Taking into account the proposed level of allowances set out in paragraph 5.1 above, the new cost is anticipated to be approximately £35,000.

5.3

In addition to the above recommendations, the IPR also wanted to make a number of general observations: 

Whilst it was understood that the changes to the Board membership would be implemented from the Annual General Meeting in September and that mechanisms were in place to recruit the Board chair and Board members (now almost complete), the IRP felt that the level of Board allowances could be more effectively reviewed once the new Board had been operational and that this should take place within the first two years of operation.



As the conclusions of the governance review did not specifically mention the role of Councillors on the Board and historically allowances have not been paid to them, the IRP has not taken a view at this stage as to whether to introduce an allowance for the four Councillors appointed to the new YHN Board. The IRP noted that Councillors are appointed to a range of external boards and hold directorships of Council Companies, but do not usually receive any remuneration for this in addition to their councillors allowances.

Background papers 

Report to YHN Board on Board Member Payment 2009



YHN Governance Review Working Group Report to YHN Board 10 March 2017



Board Member description and skills



Comparison with other areas

Contact officer Linda Scott – Service Manager Democratic Services: tel 0191 211 5159 or email linda.scott@newcastle.gov.uk

Asfaleia Board remuneration

August 2017

Asfaleia Board remuneration

INTRODUCTION

1.1.

Asfaleia Ltd is a community benefit society set up as a subsidiary of Your Homes Newcastle (YHN). It provides services in relation to sheltered housing, community alarms, employability and young people (including advice and support). The Board’s remit is governed by an intra group agreement and service agreement with the parent organisation, YHN. It has a Board of five people, comprising two Board members from the main YHN Board and three independent members.

BACKGROUND AND CONTEXT

2.1.

Following a governance review, YHN has reviewed the constitution and skills needed on the parent Board and Asfaleia and is now recruiting on the basis of the skills and competencies needed to run the businesses at strategic level, while continuing to have Council nominees sat on the YHN Board.

2.2.

YHN Board remuneration has been reviewed: a recommendation is pending approval/decision which proposes that Board payment for individual YHN Board members is increased to £3,000 p.a. from £2,000 p.a., and that Committee Chairs will receive an extra £1,000 p.a. This is within the pay range for ALMO Board members.

2.3.

YHN is mindful of the NHF Code of Governance requirements to ensure any Board pay is reasonable and proportionate for the complexity of the organisation and also Charity Commission good practice around Trustee/Board member remuneration.

REASONS FOR SEEKING PAYMENT FOR THE BOARD OF ASFALEIA

3.1.

The market for non-executive recruitment has changed considerably over the last five years. It is an increasingly competitive market, competing both within the housing association sector itself and across other sectors, such as health and commerce. Within the housing association sector, there has been an upward trend for a number of years in organisations looking to pay their Board members. While remuneration in the ALMO sector is less common, nevertheless 40% of ALMOs pay their Chairs and/or their Board members.

3.2.

The recent recruitment exercise undertaken by YHN was originally designed to attract members to the YHN Board, but the success and depth of the field has allowed the Asfaleia independent contingent of non-executive places also to be filled. Given that the ‘ask’ of individuals in these roles is effectively the same – to pick up the strategic direction of the organisation, generate growth and ensure effective performance and operation of all services – there is an argument to say that the treatment of them should be no different to that of the YHN Board members. We note furthermore that both Boards will in any case be meeting together on a six-monthly basis.

3.3.

There are risks attached to the running of Asfaleia, both financial and reputational as its client group are in the main, vulnerable. It is an independent organisation legally and as such the Board members have direct responsibility for managing the risks of the business and for their fiduciary custodianship of the organisation; they are subject to the requirements of charitable law. August 2017

Page 2 of 3

Asfaleia Board remuneration

3.4.

We also note that it is a legal requirement that has set out the disaggregation of Board members in the group across two Boards rather than a common purpose structure across the whole group. The legal advice is that Asfaleia’s Trustees must act in good faith in the organisation’s interests and that too many interconnected Trustees might compromise what is in the charity’s best interests by considering wider group interests; otherwise the membership of Asfaleia’s Board would have been drawn from the same pool, further underlining the complementarity of ask of Asfaleia’s non-executives. As it is, there is an explicit value based upon the independence of the three ‘external’ Board members who operate as Trustees of Asfaleia.

3.5.

The issue of parity is raised by the mixed membership of Asfaleia’s Board. Two members of the Board are likely to be remunerated at the recommended new payment level of £3,000 p.a. (if that is indeed approved) – it would seem to be inequitable that the other three members receive no remuneration.

3.6.

Our anecdotal experience in advising on such matters for some 12 years now is that payment at whatever level (even if nominal) creates a psychological contract between the organisation and the individual to carry out the role to the expected standard and engage in appraisal, extra Board activities and overall engagement. Payment encourages motivation and retention, and provides for some stability and continuity – Board members can feel more ‘bound’ to the organisation.

3.7.

In coming to a recommendation about the remuneration we have taken these factors into account and also the need for a practical and easy to administer approach that is seen as fair across the whole organisation and the fact that Asfaleia is a Board that requires highly skilled and competent people.

RECOMMENDATIONS

4.1.

We recommend that Asfaleia pay its three independent Board members £3,000 p.a. This is in line with the recommended payment level for YHN Board members.

4.2.

We do not recommend that any additional payment is made to the two YHN Board members serving on Asfaleia’s Board, and assume that Board members across the Group structure will have additional responsibilities of various kinds.

4.3.

An additional £9,000 p.a. of expenditure will be incurred if these recommendations go forward.

Campbell Tickell Ltd

August 2017

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