The usual suspects? We scrutinise the appointment of a new generation of chief executives

Another, possibly more important, factor is that many housing figures who came in to the sector in the late 1960s and early 1970s as part of the post-Cathy Come Home indignation are now hitting retirement age.

“It has been like a generation who grew up in the ‘housing movement’, reaching that stage together,” says Greg Campbell, partner at recruitment firm Campbell Tickell. Mr Campbell goes on to suggest policies announced under the Cameron government may have persuaded in some chief executives that now is the time to call it a day.

Mr Campbell says: “People were not expecting the rent cut, that meant organisations had to make cuts, and that made a lot of people think ‘this is not what I came into the sector for.’”

Added to this is pressure on organisations to diversify their funding streams, the challenges of digitisation, coping with an ageing population and welfare reform and changes to consumer regulation post-Grenfell. All of this may have been an influencing factor in persuading some to step down.

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The fact that 30 chief executives had served in their roles for 10 years or more suggests a lot of experience is being lost, it also raises questions about the length of executive terms in the sector, as does the fact that 28 current CEOs have been in their post for a decade or more.

The average length of CEO tenure for FTSE 100 companies is six years,research by international recruitment firm Heidrick & Struggleshas shown.

This suggests the biggest housing associations often have chief executives in the post for longer than other large companies.

Kate Still, chief operations officer at WM Housing, believes this needs addressing. “After 10 or 15 years you need some fresh thinking, a new perspective,” she says. Incidentally, Ms Still’s own boss at WM Housing, Kevin Rogers, is one of the new faces having been appointed chief executive in 2015 replacing the experienced Pat Brandum.

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Steve Douglas, partner at Altair, suggests long terms are not necessarily a problem if the CEO is still ‘growing, developing and thinking’.

However, what these lengthy terms do suggest is that it might be a number of years before so many roles become vacant again.

Mr Douglas said: “This is a window of opportunity to ensure greater diversity and the sector should seize it.”

So is the sector grabbing this opportunity so far?

The answer, unfortunately appears to be ‘no’.

Our analysis shows that just two out of of the 34 new chief executives appointed since 2015 are black or minority ethnic (BME) and one of these is Geeta Nanda, who had been an existing chief executive at Thames Valley before her move to Metropolitan.

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Only nine of the 34 appointments were women and only one was from outside the social housing sector.

Taking ethnicity first, the fact that just 5.9% of new appointments are BME stands out as a very low figure, suggesting little progress compared to the 4.5% of 331 housing executives identified as BME in an audit published by Inside Housing earlier this year.

Tom Murtha, a former chief executive and long-time campaigner for more inclusivity in the sector, says: “It is shocking and shameful that out of 34 appointments just two BME chief executives, including one that was already a chief executive, have been appointed. This was a huge opportunity and for whatever reason we haven’t been able to open up to talent from the BME community.”

Mr Murtha says a lack of skilled candidates within BME communities is not the problem, and there are high numbers of BME people working in the sector in more junior positions.

“All of the evidence suggests that diverse interview panels lead to diverse candidates and diverse recruitment outcomes", Steve Douglas, partner, Altair

Terrie Alafat, chief executive of the Chartered Institute of Housing, agrees. She says: “We know from our own internal research that as a sector, housing is actually more diverse than average. But at the top of our organisations, on our senior teams and boards, it’s a different story.”

For Mr Murtha the responsibility to change this situation begins and ends with boards, which are often dominated by white men and are, unconsciously or otherwise, drawn to appointing candidates who look like them.

He says: “A lot of the solutions you hear put forward suggest there is a problem within the BME communities and associations talk about the need to develop people and skills, but actually we are the problem, we need to get our culture right – we shouldn’t be just picking people in our own image.”

Mr Douglas says where there is a will from an organisation, recruiters should be able to ensure diversity of board membership. He adds that most associations adopt maximum board terms of six or nine years, meaning opportunities to refresh boards come up regularly.

He says: “All of the evidence suggests that diverse interview panels lead to diverse candidates and diverse recruitment outcomes.”

In addition to ensuring diverse boards, Mr Murtha also suggests that if people from BME communities are not applying for roles, organisations need to think about how and where they advertise roles or whether they need to change the criteria.

The criteria used to select candidates is also a major factor in the relative lack of women chief executives appointed, suggest Ms Still.

44 chief executives have left the role since 2015

9 of the 34 chief executive appointments are women

5.9% are new appointments were black or minority ethnic

11.6 years the average length of term of those that have left since 2015

She points out that boards in the sector typically have a preference for candidates with skill sets in traditionally male-dominated areas, such as property or finance, rather than areas such as housing management. Of the 34 new CEOs it is not always obvious how to categorise their background, but it does indeed look as though the biggest group can be said to be from finance or development.

“There is a real undervaluing of the housing management part of the organisation” she says.

Ms Still says there is therefore “a skill set deficit” in the sector, and a misunderstanding about the nature of leadership. She argues: “A good leader doesn’t necessarily need technical skills, they need to be able to drive a business forward and take people with them.”

The danger in all this, she suggests, is that boards look at a narrow skill set based on finance and governance and that people who display different thinking and different characteristics are overlooked.

She also suggests that women often don’t want to apply for more senior posts because of stereotyping and constantly being told they are wrong by men. A lot of networking in the sector also takes place outside of work hours, which is not suitable for those with childcare responsibilities, often women.

“I think the turnover in housing association chief executives should be seen as an opportunity for the sector to re-energise and reinvent itself to meet the increasing challenges of the housing crisis. "Hopefully a younger and more diverse cohort of CEOs than when I became one in my mid 40s will challenge and disrupt the market and find new solutions.

"I retired as Accent CEO as part of my long term plan to retire when I turned 60, but am finding new energy and enthusiasm in my non executive director roles.

"Perhaps the nine- year max non-executive rule should be extended to CEOs?”

It certainly should be considered if a CEO has not led there organisation to grow, strengthen or transform its operations."
Gordon Perry, retired as chief executive of Accent Group in 2017

"There is a good reason for the nine-year rule with board members, and I think similar principles apply to chief executives - a time comes for organisations to get fresh impetus and we had actively planned for succession so it just seemed reasonably normal.

"Some people can switch off from work, unfortunately I’m not one of those and all the successes and failures of the organisation were very personal to me which gets a bit wearing after so many years. The rent cuts weren’t a factor ; we got over that within six months of it being announced."

Andy Orrey, who left his role as chief executive of Ongo in 2017

The concerns about a narrow focus when recruiting are arguably also borne out by the finding that just one out of the 34 new appointments are from outside of the social housing sector

Mr Campbell says boards often “flirt” with the idea of looking outside the sector, but when it comes to the crunch they tend to go with people who have social housing sector experience. “Some might say that is conservative but it is a pretty complicated sector,” he says.

Mr Douglas on the other hand, warns that not looking outside housing “would be a cause for concern if organisations are missing the opportunity to consider the widest pool of talent.”

The debate about hiring outside of your own sector is one that has been going for many years, but out-of-sector appointments are on the rise among the largest companies, according to a 2016 study by consultancy PWC.

But the overall picture in UK social housing is of risk-averse boards largely sticking to candidates in the sector, with a preference for those with finance or development backgrounds.

"The window of opportunity created by the old guard retiring is closing"

Only one in four of new CEOs are women, and hardly any are from BME communities.

Are we likely to see any change soon? There certainly has been much talk in the sector about inclusivity recently.

Inside Housing’s Inclusive Futures campaign challenges landlords to sign up to steps to promote inclusivity among leadership teams and the CIH’s presidential commission also has practical recommendations for landlords.

Several associations have pledged to adopt the Rooney Rule – which obliges them to shortlist women and BME candidates for senior roles.

The Leadership 2025 programme, sponsored by L&Q, Optivo, BME London and supported by the Mayor of London, aims to help BME leaders into senior positions, while the National Housing Federation has pledged to “bring organisations together and encourage them to challenge themselves” on diversity.

So there is much talk, but the window of opportunity created by the old guard retiring is closing and the time for action is now.

Inside Housing is launching the Inclusive Futures Summit

Our high-level summit will bring together respected people leaders and exemplars from the across sector and wider business to debate, discuss and learn how to embed diversity and inclusion in your organisations and harness the myriad benefits that this creates and to ensure that your workplace is reflective of the diverse communities you serve.

Themes being discussed include why being an inclusive organisation can help you be more successful, how to make inclusion visible in your organisation and the best approaches to encourage diversity at board level.

Discussions will also focus on how to future-proof your recruitment processes, promote inclusion through talent management, build working environments safe from prejudice and tackle unconscious bias.

The summit will take place on October 11 at the Emirates Old Trafford, Manchester.

CLICK HERE TO BOOK NOW

Inside Housing’s Inclusive Futures campaign aims to promote and celebrate diversity and inclusion.

We are pledging to publish diversity audits of our own coverage.

We are also committed to proactively promoting positive role models.

We will do this through the pages of Inside Housing. But we will also seek to support other publications and events organisations to be more inclusive.

Our Inclusive Futures Bureau will provide a database of speakers and commentators from all backgrounds, for use by all media organisations.

We are also challenging readers to take five clear steps to promote diversity, informed by the Chartered Institute of Housing’s diversity commission and the Leadership 2025 project.

Click here to read more or to sign up for more information

THE INCLUSIVE FUTURES CHALLENGE

Inside Housing calls on organisations to sign up to an inclusive future by taking five steps:

Prioritise diversity and inclusion at the top: commitment and persistence from chief executives, directors and chairs in setting goals and monitoring progress.

Collect data on the diversity of your board, leadership and total workforce and publish annually with your annual report. Consider gender, ethnicity, disability, sexuality, age, and representation of tenants on the board.

Set aspirational targets for recruitment to the executive team, board and committees from under-represented groups.

Challenge recruiting staff and agencies to ensure that all shortlists include candidates from under-represented groups.

Make diversity and inclusion a core theme in your talent management strategy to ensure you support people from under-represented groups to progress their careers.

THE CASE FOR CHANGE

34%

of housing association chief executives are female

1%

of housing association executives have a disability

1.6%

of housing association board members are LGBT

Women make up 46% of the UK workforce, but Inside Housing research found that they are under-represented on housing association boards (36%), executive teams (39%) and among chief executives (34%).

Almost a fifth of working-age adults have a disability (18%), yet associations reported only 1% of executives and 4.5% of board members with a disability. Many were unable to provide details.

Nationwide, 14% of the working-age population come from a BME background, climbing to 40% in London and Birmingham. Yet our research found that 6.8% of board members identified as BME, compared with 4.5% of executives.

Statistics on representation of LGBT people in the workforce are in short supply, but official statistics suggest that 2% of the total UK population identify as lesbian, gay or bisexual, rising to 4.1% for 16 to 24-year-olds. Our survey found that 1.6% of board members and 10 executives were LGBT – but most organisations were unable to provide figures.

Click here to read the full research

INSIDE HOUSING’S PLEDGES

We will take proactive steps to promote positive role models from under-represented groups and provide information to support change.

We pledge to:

Publish diversity audits: We will audit the diversity of the commentators we feature. We will formalise this process and publish the results for future audits twice a year.

Promote role models: We will work to highlight leading lights from specific under-represented groups, starting in early 2018 with our new BME Leaders List.

Launch Inclusive Futures Bureau: We will work with the sector to compile a database of speakers, commentators and experts from under-represented groups. The bureau will be available to events organisers, media outlets and publications to support them to better represent the talent in the sector.

Take forward the Women in Housing Awards: Inside Housing has taken on these successful awards and will work to grow and develop them.

Convene Inclusive Futures Summit: Our new high-level event will support organisations to develop and implement strategies to become more diverse and inclusive.

The media plays a key role in championing diverse role models, so we designed a project to measure Inside Housing’s track record.

CLICK HERE TO SEE THE RESULTS