Implementing Enterprise Risk Management: Case Studies and Best Practices

CHAPTER 8 Housing Association Case Study of ERM in a Changing Marketplace

JOHN HARGREAVES

Managing Director of Hargreaves Risk and Strategy

This case has two main aims. The first is to help develop an understanding of the importance of enterprise risk management (ERM) in a charitable context, and show that modern charities are often very active organizations that face significant risks. Second, the case aims to illustrate the need for a close relationship between risk assessment and strategy development, particularly in sectors where objectives are defined in social as well as in economic terms. This case features four real-life charitable housing associations in England and Wales, each with a different strategy and risk environment. Simple yet practical tools to assist in risk identification and prioritization are also presented.

BACKGROUND

The UK housing market is going through a difficult period. The number of households is expanding by 250,000 per year, but the rate of house building is only half of what it needs to be. There is a tradition of home ownership, but the banking sector has recently not been able (or willing?) to fund further growth, and home ownership has fallen to its lowest level for two decades. Young working people who would previously have taken out a mortgage and bought their houses are now turning to renting. There is an urgent need to provide ordinary working people with good quality homes; the private rental market provides homes of mainly low quality, ...