Governance

1. Establish a strategy and business model which promote long-term value for shareholders

We produce an annual business plan which is approved by the Board. The business plan sets out the business model and strategy, providing details of the challenges and risks faced by the business. The business review within the
Chairman’s Report summarises the strategy of the business, its business model and the key risks and uncertainties faced by St Arthur and how these are mitigated.

2. Seek to understand and meet shareholder needs and expectations

We have a shareholder agreement in place with its parent company, which provides key outputs and regulatory protections. Representatives of the parent company sit on the Board and they attend monthly management meetings. This ensures close, regular contact with shareholders and allows any concerns to be raised and addressed.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

We have a clear understanding of its key stakeholders and the methods by which it can obtain feedback. The stakeholders that we communicate with include shareholders, the Regulator, Wayfarer (a development consortium), house builders, residents, and staff. We ensure that all regulatory returns are submitted on time and seeks to maintain regulatory compliance to minimise communication with the Regulator. We attend regular meetings with Wayfarer throughout each year, to ensure that it is meeting all the necessary requirements in terms of the consortium and the Homes England grant funding requirements. We acquire good quality homes which are in sustainable communities (near to transport, healthcare, schooling, and other essential services) so that first-time buyers feel connected and contribute to their neighbourhood. We are professional and efficient with our developer partners, bringing the best of private and public practice to the design and construction
stage. The St Arthur Board is aware of the importance of customer feedback and systems are being developed to ensure regular and comprehensive feedback is made available to the Board to help influence decision making. The expanding regulatory requirements in this area will requiring more extensive data collection which is being developed. Over the year, we significantly grew our workforce and will look to
develop internal mechanisms to gain an insight into the views of the workforce as well.

4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

We are developing our risk management framework, including risk appetite and tolerances. The Board receive risk registers on a regular basis and all project appraisals, which have to be approved by the Board, include risk assessments. The quarterly financial and operational performance reports include market updates and risk identifications. It remains to formalise the risk management framework and the Board has yet to develop its assurance framework. This will be developed during the year as the business grows and develops further.

5. Maintain the board as a well-functioning, balanced team led by the chair

We have a Board with three independent non-executive directors, with other non-executive and executive members. The executive directors are all full-time employees. The non-executive directors that are representatives of the parent company along with the CEO also provide a significant time input, as they attend monthly management meetings to review detailed financial and operational performance.
The Board meet quarterly, with an additional meeting to approve the accounts. Due to the company’s small size, the Board has been dealing with all matters but during the next 12 months, it is planned to review its structure.

6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

Several board members also sit on the boards of other registered providers. With the appointment of an independent non-executive Chair at the end of 2021, following a robust recruitment exercise undertaken by an external consultancy, the final element of the board membership was completed and the establishment of robust governance processes can now be put in place.
During 2022 the board will undergo a full skills assessment and a board development plan will be developed. The Board has already agreed to a programme of nugget training prior to board meetings on key regulatory and sector specific issues, delivered by officers. The Board receive a regulatory update at each meeting to ensure they stay abreast of regulatory changes.
During the year, we engaged with Campbell Tickell, who undertook a review of the governance documentation that we had developed. Campbell Tickell noted that we were on a journey regarding its governance processes, having not long been established and they noted that the appointment of specific resources around governance and regulation should ensure that the Company was able to make rapid progress regarding its governance systems and process during 2022.
The size of the company currently negates some of the additional governance roles and structures that are good practice; but with the proposed growth plans, the Company will be looking to develop these over the coming year This includes a board committee structure, the appointment of a company secretary and consideration of appointing a senior independent director.

7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

We completed the recruitment of its independent, non-executive in December 2021 and a review of board effectiveness will be undertaken throughout 2022 as the Board develop new processes, systems and structures.
During the year, a board performance evaluation process will be developed. This will include at least annual appraisals of the Chief Executive and Chair. As a relatively new company, these processes need to be developed and embedded within the Company, including succession planning for board and senior management.

8. Promote a corporate culture that is based on ethical values and behaviours

We are registered with the Regulator of Social Housing and receives funding through Homes England. Both organisations expect the highest standards of ethical values and behaviours.
To ensure that we operate to these, the Company is developing a suite of board and officer level policies that will be embedded within the Company. The Company already has a Code of Conduct and will work had to ensure that the values expected of a registered provider are adhered to throughout the Company. The Company is a for-profit provider and staff are aware that the Company seeks to be profitable. A performance management framework is being developed and the new approved business plan will provide the performance targets for management to attain this year. The corporate culture is communicated to teams through staff presentations and the induction process. The Company’s core values (adaptable, trustworthy, honest, and supportive) are monitored and promoted by the Executive Team. Further mechanisms need to be implemented, such as staff surveys, to allow the Board to monitor and promote a healthy corporate culture.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

As noted, we are still in the process of developing its governance structures as it grows and becomes more complex. The governance structures and processes are currently appropriate for its size but the growth plans approved in the latest business plan will require the governance systems to grow with it. Following the self-assessment against the Code, we have developed a robust governance plan, that will enable it to meet its regulatory responsibilities, as well as evidencing that it follows the highest standards of corporate governance.
The roles of the Chair, CEO and non-executive directors will be set out in an approved set of standing orders. The recently appointed Chair is leading on the implementation of the actions from the governance action plan and they have a clear vision of the governance structures that we need to have in place to be an efficient and effective provider. As a shareholder and Board member, the CEO has an important role within the governance structures and the delegated authorities will be carefully drawn up to ensure that there is adequate oversight and scrutiny.

Currently the Board has reserved the following matters to itself:
• Approval of the annual business plan, budget and key strategies;
• Approval of the annual accounts;
• Approval of loans;
• Approval of all investment decisions/project appraisals;
• Board structures and appointments;
• CEO appointment and remuneration.

A full list of reserved matters will be included within the standing orders and delegated authorities. The planned committee structure will also be dealt with through the standing orders with terms of reference included for each sub-committee of the board.
The Board is also developing its approach to risk, including its capacity and appetite. A risk management framework is being developed and internal risk workshops have been undertaken to establish a clearer view and understanding of risk within the business at officer level.

10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

We have identified its key stakeholders and ensures that it regularly communicates with them regarding its business performance:

Shareholders – A shareholder agreement is in place with St Arthur Topco Limited, which is ultimately owned by the CEO and Matter Real Estate. Matter has two representatives on the Board, who also attend monthly senior management team meetings. This hands-on approach
ensures that they are closely involved with the key decisions of the business and ensure that Company’s strategic objectives are aligned with
those of the shareholders;

Regulator of Social Housing – We submit all the necessary regulatory returns in a timely manner and keeps the Regulator informed of any matters that they require information on.

Homes England – As part of the Wayfarer Consortium, we complete all the necessary returns required by Homes England and during the year had its first successful audit of a scheme by Homes England.

Local Authorities – For local authorities that we work with, they are provided with regular reports on development progress and officers attend face to face meetings.

Developers/builders – We maintain a healthy and regular dialogue with developers/builders it works with and those it may wish to work with in the future.

Wayfarer consortium – We are in regular dialogue with the consortium regarding operational matters.

Customers – The Regulator views customers as key stakeholders for registered providers and this relationship has been further heightened by the proposed changes to consumer regulation and the new tenant satisfaction measures. Although we only house shared owners, it still
takes its responsibilities as a social landlord seriously and will implement systems to meet the requirement of the new standard.