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10 February 2020 | Comment | Article by Richard Macphail

Board Members: How best to prepare for a crisis

It is a fact of life; things don’t always go to plan. No matter how well your housing association is run, things can go wrong at times. When a reputational risk arises, it can shake the trust of your key stakeholders: your tenants, staff, funders and, of course, the regulator. How a housing association recovers from an incident can very much depend on how well it is handled. If not handled properly an incident could spiral into a crisis. As a board member you will want to ensure that you know what role you play in any incident management so that trust can be restored.

Prepare to Fail

The first question you should ask yourself is whether there is an incident plan in place. The old adage ‘fail to prepare, prepare to fail’ rings true in this instance. This concise document should outline when the plan would be invoked, who the key people are that need to be contacted (including their contact details), outline the first steps that the organisation should take to contain the initial risk and mitigate against any further damage being caused. The document should also include what the lines of communication should be (both internally and externally) to ensure that a clear, measured and consistent message is conveyed to stakeholders at the appropriate time. All board members should be aware of this document and have a copy (or at least know where to find it!).

Keep stakeholders informed

In the event of an incident, staff, tenants and other stakeholders will have many questions to ask. The Board will want to ensure that there are clear and consistent lines of communication, both externally and internally, to give assurance that the association is handling matters effectively and efficiently.

Good advice leads to good decisions

Thirdly, the Board must ensure that it receives the right advice to be able to make good, informed decisions. Whilst it is vital that the Board and management team work together in addressing any incident, the Board should not be afraid to engage third party advisers in the event it feels that an outside, independent view, or a specific expertise, is required. The management team may be under such intense pressure that it may not even have realised itself that third party involvement, such as legal, financial or other, may be required. As a board member, you should have confidence in the information you receive. It may be that professional expertise may be required so that any incident is handled properly. If you feel such advice is needed, you should ensure that it is obtained promptly.

After the storm

The Board should ensure that once the immediate issues arising from the reputational risk have been addressed, that a longer term assessment is undertaken. This includes assessing how the risk arose in the first instance, could it have been avoided, can it be avoided in the future, how did the management team respond, how did the Board (including individual board members) respond and are any training needs identified? Whilst an incident can sometimes not be avoided, the poor handling of it could exasperate it. A strong and effective Board will ensure that risks arising from an incident are contained and mitigated promptly and any areas of improvement that have been identified are acted upon.

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Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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