Mixed Messages: Housing Associations and Corporate Governance
| Date | 01 March 2007 |
| Author | Morag McDermont |
| Published date | 01 March 2007 |
| DOI | 10.1177/0964663907073448 |
| Subject Matter | Articles |
MIXED MESSAGES: HOUSING
ASSOCIATIONS AND
CORPORATE GOVERNANCE
MORAG MCDERMONT
University of Bristol, UK
ABSTRACT
Housing associations have traditionally been bound together by notions of providing
for those in housing need, non-profit making and a voluntary ethos. Since the mid-
1980s these understandings have altered when associations began to develop a private
sector ethos leading to: increased priority given to the needs of private funders; the
professionalization of boards of management, largely at the behest of the state regu-
lator; and a reimaging of tenants as ‘customers’. These changes have raised fundamental
questions about the appropriateness of associations’ modes of internal governance
through voluntary governing bodies. This article explores those shifts in culture and
the ways in which they have created difficult and contradictory subject positions for
members of boards, particularly tenant board members. The article raises questions
about the application of corporate governance models to the housing association
sector, and the appropriateness of applying private sector principles of corporate
governance to organizations in the voluntary/quasi-public sector. Using Foucault’s
insights on the subject and power the article will consider how tenant board members
are constructed by others and themselves, and how these constructions could affect
their potential for intervening in the power relations of the board.
KEY WORDS
corporate governance; expertise; Foucault; housing associations; tenants
INTRODUCTION
THE RECONFIGURATION of the ‘social’ is now such a common part of
everyday life that it no longer invokes surprise. Opposition to the
privatization and marketization of what we once thought of as public
services has become muted and seen as ‘old fashioned’. Having attained the
SOCIAL &LEGAL STUDIES Copyright © 2007 SAGE Publications
Los Angeles, London, New Delhi and Singapore, www.sagepublications.com
0964 6639, Vol. 16(1), 71–94
DOI: 10.1177/0964663907073448
status of ‘common sense’ the domination by the private sector does not appear
in need of questioning – what was once highly contested is normalized. And
yet New Labour’s continuation of Thatcher’s agenda raises fundamental ques-
tions about what we mean by ‘the social’, and concepts such as governing in
the ‘public interest’. This article examines some of these issues in the context
of the changing provision of social housing in the UK.1
The article takes as its starting point the shift in the provision of social
housing from local government to housing associations, not-for profit, once
voluntary organizations. While local authorities still hold the greatest propor-
tion of the stock of social housing, this is now simply seen a fact of history.
Even numerical superiority is being whittled away as local authorities transfer
the housing stock to newly formed associations through large-scale voluntary
transfer (LSVT), organizations that are private (social) businesses. Funda-
mental to changing institutional forms are the shifting mentalities and tech-
nologies of governing. Along with other public services, the move away from
public ownership is not just a replacement of the public provision with
market provision. Another part of the rhetoric is the out-datedness of repre-
sentational democracy, and the rise of ‘active citizenship’.2Citizens, or
consumers (the fundamental differences between the two are brushed over
with the jargon of the ‘citizen consumer’), are to become actively involved
in the governing of public services – in housing associations this is in the form
of tenant membership of the board of governors.
The intention of this article is to theorize about the framework in which
housing associations are governed, and in particular on the role of tenant
governors. I argue that the shifting governing of housing associations and
social housing policy has become dominated by private finance norms.
However, using the theoretical framework of Michel Foucault and the
governmentality scholars gives us a handle with which to analyse the complex
power relations in operation at the micro-level of board governing. The
article is primarily concerned with the mentalities of governing, but while the
first part demonstrates how the norms of private finance have come to
dominate at all levels, the second part uses Foucault’s work to theorize on
the relationship between the tenant governor as subject and the power
relations s/he becomes enmeshed within.
The governance of housing associations is complex. In Part 1 I outline the
changing nature of the housing association sector, from a small voluntary
sector largely funded from charitable resources, to a large corporate sector
in which the first imperative is to meet responsibilities to private funders. In
this move, the shifts in the mentalities of the sector have been effectively
embedded because they have not arisen just from central government dictat.
On the contrary, it was the housing association sector itself that perceived
the need to embrace private finance and business values in order to maintain
expansionist strategies. The sector has been quick to adopt models of ‘corpor-
ate’ governance – but not without some sites of resistance. I then consider
attempts to define the role of boards in the corporate governance of associ-
ations and other quasi-public bodies, and a discussion of the expectations of
72 SOCIAL & LEGAL STUDIES 16(1)
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