Company Secretary Snapshot

Welcome to another edition of the monthly snapshot. This month we’re looking at the Regulator of Social Housing’s tenant satisfaction measures for the new consumer standards, the latest from the Housing Ombudsman, some key themes for AGM season and more developments around the sector.

The Regulator publishes Tenant Satisfaction Measures and new TSM Standard

The Regulator for Social Housing (RSH) has published the new tenant satisfaction measures (TSMs), the new accompanying TSM Standard and the requirements for the TSMs.

• The new requirements come into force from 1 April 2023 and registered providers of social housing (RPs) must then start collecting data for TSMs.
• The requirement on RPs to collect TSM data is set out in the new TSM Standard. RPs will be required to provide the data to the RSH and to publish their results on an annual basis and in a way that tenants can easily access and understand. RPs will be expected to provide their first set of TSM data to the RSH in Summer of 2024. The first collated data around the TSMs will be published by the RSH the following Autumn.
• There are 22 TSMs. 10 of these will be measured by landlords directly, and 12 will be measured by landlords carrying out tenant perception surveys.
• The TSMs cover the following five themes: Keeping properties in good repair; Maintaining building safety, Respectful and helpful engagement, Effective handling of complaints; and Responsible neighbourhood management.
• The TSMs themselves include “overall satisfaction”, satisfaction with repairs, including time taken with repairs and building safety checks such as fire and gas safety.
• RPs with a large number of units will also have the option of surveying groups of tenants, but in doing so will have to follow rules that the RSH has set about how many tenants are surveyed and how to randomly select participants. The aim is that the results will be similar to a scenario where all tenants were surveyed.
• RPs with less than 1,000 units will be subject to the TSM regime but with modified requirements. They will have the option of running their tenant surveys every two years instead of annually and will not be required to submit their TSM data to the RSH.
• Governance teams may need to think about with how they will link in with other teams in their organisations to ensure that outcomes are reported into the governance structures, and how any issues are identified and escalated.

Quarterly report from Housing Ombudsman Service

On 8 September 2022, the Housing Ombudsman Service (Ombudsman) published its quarterly report covering the period April to June 2022. The Ombudsman reported that it issued 22 complaint handling failure orders, 17 of which were complied with and five of which were non-compliant. The quarterly report names the landlords, made up of eight councils, ten housing associations and one housing co-op. The report also includes three case studies which illustrate the experiences of tenants and how the complaint handling failure orders have been used to progress their complaints.

The Ombudsman issues a complaint handling failure order to RPs where there is a failing on their part to comply with their obligations as a member of the Housing Ombudsman Scheme. These orders are issued to ensure that the RPs’ complaint handling processes are accessible, consistent and enable the timely progression of complaints for tenants.

There are three types of complaint handling failure orders, covering unreasonable delays in accepting or progressing a complaint, unreasonable delays in providing information and failure to comply with membership obligations.

In July 2020, the Ombudsman introduced the Complaint Handling Code (Code). All landlords have until 1 October 2022 to complete a self-assessment against the Code. RPs must carry out an annual assessment against the Code to ensure their complaint handling remains in line with the Ombudsman’s requirements. RPs must also publish the results of their self-assessments.

Governance teams should ensure that any useful learnings are fed back to the board and/or relevant committees and that the Ombudsman complaints are monitored to allow for updates to any complaints handling processes.

The Regulator Publishes the Social Housing Business Plan 2022/23

The Regulator for Social Housing (RSH) has published its business plan for 2022/23. Here are some of the key themes and priorities for the RSH:

• Consumer regulation remains the priority. The RSH notes that it will continue to work with tenants, landlords and other stakeholders to implement changes to the consumer regulation framework. While consumer regulation will be taking much of the RSH’s focus, it also notes that at the same time, the RSH will continue to focus on and deliver its “robust approach” to economic regulation and its existing reactive consumer remit.
• The RSH has set out its “vision” for the sector which includes that:

“landlords maintain tenants’ homes so that they are safe and of a decent standard and that landlords provide a quality service. Where things go wrong, complaints are handled effectively, and things are put right. The relationship between tenants and landlords is underpinned by shared expectations of fairness and respect and a shared understanding of their respective rights and responsibilities. Landlords demonstrate that they understand the diverse needs of the communities that they serve, and their services reflect that. Tenants understand, use, and have confidence in the recourse that they have to get problems resolved.”

• IDAs: The RSH aims to carry out IDAs on RPs (where required) at least every four years. The RSH carries out IDAs more frequently on RPs that are considered high risk or high impact. In the Business Plan, the RSH has identified the following groups which come under this high risk category:
  • very large providers with 40,000 or more units, and
  • providers with a high level of non-social housing activity, primarily market sales but also including facilities management, care, and other activities.

The RSH considers that these RPs would have a significant impact on the sector if they experienced difficulties. The RSH therefore aims to carry out an IDA on these RPs at least every three years, and to engage with their executive teams in the years in between.

FAQs – Common themes for AGM Season

Welcome to our monthly FAQ section where we spotlight some of the more common topics that you have been asking us to advise on. Annual General Meeting (AGM) season is well under way and we have received a number of questions around the requirements to hold AGMs and what the relevant procedures are.

Below is a selection of some of the common questions that we have been asked:

Why do you need to hold an AGM?

• The main function of AGMs is for the members/shareholders of an organisation to hold the officers to account. In practice, in particular in the housing sector, AGMs are used for the receipt of accounts and financial reports and for the election of board members/directors (where these officers are elected by shareholders rather than being appointed by the board). AGMs can be a good opportunity to engage with shareholders and many of our clients use them as an opportunity to also pass special shareholder resolutions (for rule changes, for example) where needed.

Who needs to hold an AGM?

• Most RP registered societies are required to hold AGMs under their rules in order that the accounts can be approved by their shareholders and to ensure that the RP can meet their reporting requirements with the RSH, lenders and other third parties.
• For private companies (whether limited by shares or by guarantee), the general rule is that they are not required to hold an AGM unless their articles say otherwise.
• There is no requirement for LLPs to hold an AGM.
• All public limited companies (PLCs) must hold an AGM including dormant PLCs.

If an AGM is required, when should this be held?

• Registered societies should check their Rules, but generally AGMs should take place within six months of the financial year end.
• For trading private companies, an AGM will need to be held 9 months from the day following its accounting reference date. Non-trading private companies are not obliged to hold AGMs.
• A public company will need to hold an AGM within 6 months beginning with the day following its accounting reference date.

What is the length of notice required for an AGM?

• Rules should be checked to confirm, but ordinarily general meetings require 14 days or clear days’ notice.
• The Companies Act 2006 sets out the statutory notice periods for general meetings for companies, being at least 14 days. However as companies are permitted to lengthen the minimum notice period for general meetings, the articles should be checked for any variation to the statutory provisions.
• Beware of when the notice period begins. They generally start from the day the notice is received in line with the notice periods in the constitution, not the day it is sent.

Can AGMs take place virtually?

• Whether AGMs can take place virtually will depend on what is provided in your articles or rules. If your rules are silent as to whether you can hold your AGM virtually, we recommend that you update them to make explicit provision for virtual AGMs. A member of our governance team can assist you with making these updates, and in the meantime there may be other ways that you can hold your AGM in a pseudo-virtual manner (e.g. by use of proxies).

FRC Good Practice Guidance for Company Meetings

The Financial Reporting Council (FRC) published its good practice guidance for general meetings on 21 July 2022 (Guidance). Since the Covid-19 pandemic, many companies have now moved to a hybrid form of meeting to allow shareholders to attend in person or remotely via an online platform, and to vote either at the physical meeting or remotely via the electronic platform or by proxy.

The Guidance recognises this trend and has set out seven key principles including practical actions for consideration. These are summarised below:

1. Prior to the general meeting, provide shareholders with clear instructions on how to attend the meeting and participate.
2. Regardless of how the meeting is going to take place, allow shareholders to engage in the business of the meeting.
3. The board should provide an update at the AGM on matters raised by stakeholder groups that it considers to materially affect the company’s strategy, performance and culture.
4. Consider the broadest access to and participation in general meetings by a diverse range of shareholders. Shareholders participating in the meeting should have the ability to ask questions, whether they attend virtually or in person.
5. Depending on the format of the meeting, shareholders should be able to vote in real time, or to appoint a proxy in advance. Make use of appropriate technology.
6. Be as transparent as possible with shareholders in relation to matters discussed and raised by shareholders at the meeting.
7. Shareholder engagement should not be limited to an annual event. Opportunities to update shareholders should be offered throughout the year, with an emphasis on ensuring all shareholders have access to similar information.

Regulatory Upgrades

Our monthly review of regulatory upgrades/downgrades/regrades in the sector has highlighted the following themes:

• Governance downgrade resulting from:
  • insufficient assurance on stock condition and inadequate provision for asset investment made in business plan. The judgement demonstrates the need for boards to monitor and have strategies to deal with fundamental issues with their asset base, as well as monitoring and delivering on routine compliance obligations (which has more commonly resulted in downgrades).

• Governance upgrades resulting from:
  • significant changes to board and executive leadership resulting in board skills aligning more closely with the activities of the association which in turn facilitated improved scrutiny and challenge of performance
  • strengthening of board oversight of landlord compliance
  • improved quality of reporting, stress testing and mitigation planning
  • simplification of governance structure and implementation of changes to legal structure (namely resulting in a registered group parent)
  • group structure better aligning with an updated strategy, placing greater emphasis on core purpose
  • focus on delivery of strategic objectives
  • improved risk and internal controls arrangements which have addressed weaknesses, to enhance the board’s oversight of key risks.

• Financial Viability regrades (V1 to V2) resulting from:
  • a reduction in headroom on tightest interest cover covenant following an investment in existing homes, thereby resulting in a material risk that only a limited amount of stresses could be absorbed
  • a reduction in capacity to respond to adverse events as a result of increased levels of stock investment expenditure which put pressure on interest cover ratios and increased revenues and exposure to the housing market through the development and sale of shared ownership properties.

• Breaches of the consumer standards resulting from:
  • fire risk assessments being overdue
  • not having carried out remedial actions identified in fire risk assessments
  • not having valid communal asbestos surveys in place
  • current electrical condition reports not being in place
  • current risk assessments for water safety not in place.

AOB

Date for your diary – 3 November

The next in our Fit For Purpose webinar series will take place on 3 November, 11am – Midday. This webinar will look at Managing risk in diversified activities, with guest speakers from KPMG and Nottingham Community Housing Association. Look out for this activity on our Events webpage to register your place.