Coronavirus – Advice for governing bodies
26 February 2021
This guidance is to support RSL governing body members during the Coronavirus pandemic. It covers the things that RSLs have asked us about. We will update this guidance as relevant issues are raised with us and to take account of any changes.
This guidance covers:
- What an RSL should do if its governing body is unable to meet or achieve a quorum;
- What an RSL should do if the membership of its governing body falls below the required number;
- What an RSL should do if it is unable to update its constitution at its next AGM;
- AGM’s and SGM’s;
- Approval of an RSL's accounts;
- Completing and filing accounts on time; and
- What a landlord should do if it can’t carry out its tenant satisfaction survey.
If the RSL governing body is unable to meet or achieve a quorum
Where you are unable to meet or achieve a quorum because of restrictions on public gatherings, governing body members being unwell or self-isolating, or shielding a vulnerable person, you should:
- Follow the Scottish Government guidance: ‘Coronavirus Covid-19 and Social Landlords’ which states:
- you should consider holding meetings remotely using teleconferencing or videoconferencing;
- you can temporarily amend your standing orders and delegated authorities to allow you to make essential decisions if your governing body cannot meet or cannot achieve a quorum. If you decide to do this, you should obtain legal advice; and
- maintain a clear record of the use of delegated powers to allow you to monitor and evaluate the use of these powers and the decisions being made.
- You can also read the advice the Scottish Federation of Housing Associations (SFHA) has issued to its members ‘COVID-19 Briefing: Practical governance advice’.
If the RSL governing body membership falls below the minimum number required
If governing body membership falls below the minimum number of people required in your organisation’s constitution, you should report it to us as a notifiable event and refer to your constitution.
Your constitution should set out how this must be managed. The model rules state that in these types of circumstances, landlords can operate as normal for two months. After this, the only powers the governing body has are to appoint new members. Governing bodies can appoint co-optees or fill casual vacancies to bring their numbers up. We know that this could be challenging at this time.
We will work with you to find a solution.
If the RSL is unable to update its constitution at its next AGM
We know that you may be concerned that you may be unable to update your constitution at your AGM due to the impact of Coronavirus.
Clearly your focus during the Coronavirus pandemic is on continuing to deliver services in these very challenging circumstances and this may impact on your capacity and ability to update your constitution to comply with the new Regulatory Framework. Please let us know if you are unable to update your constitution and when you think you will be able to make the necessary changes to your constitution. Please be assured that our regulatory response will take account of the difficulties and issues that arise from the pandemic.
AGMs and SGMs
We know you may be concerned that you might not be able to hold your AGM on time because of the impact of Coronavirus and the restrictions on public gatherings.
Your constitution should set out the arrangements for your AGM including when and how it should be held.
The SFHA has developed an optional amendment in the new model rules to allow virtual AGMs and SGMs. Earlier versions of the Model Rules require an AGM to be held within 6 months of the year end and require a ‘physical’ AGM to be held, they would not normally allow RSLs to hold a virtual meeting using remote technology. RSLs who have not adopted the optional amendment in the Model Rules allowing virtual general meetings have been concerned they may not be able to hold their AGM while the restrictions on public gatherings remain in place.
Changes introduced by the Corporate Insolvency and Governance Act 2020 (the 2020 Act) allow Companies and Registered Societies to hold meetings of members virtually regardless of whether their constitution allows it. These provisions apply to both AGMs and SGMs.
The changes made by the 2020 Act apply to meetings due to take place between 26 March 2020 to 30 March 2021. This means if your AGM is held between 26 March 2020 to 30 March 2021 you can decide to hold your AGM and SGM virtually using remote technology even where this is not expressly provided for in your constitution.
The 2020 Act also provides that if your AGM was due to take place between 26 March 2020 and 30 September 2020, the period during which the meeting must be held is extended to 30 September 2020. This extension period has now completed and therefore all AGMs due to occur between 26 March 2020 and 30 September 2020 should have occurred, even if by virtual means.
The provisions of the 2020 Act allow RSLs that are Companies and Registered Societies to conduct meetings of members by electronic or other means. Any constitutional requirements to hold a meeting in person or in a location are superseded by the terms of the 2020 Act.
The 2020 Act does not set out that meetings should be held in a certain way and allows RSLs the flexibility to hold meetings virtually should they choose to do so.
If you decide to hold your AGM or SGM virtually using remote technology, there are a number of practical considerations to take into account including:
- Access to technology. It’s important that all members are provided with the opportunity to take part in the meeting. You should consider the possibility that members may not have access to the required technology to allow them to participate. Where possible support should be provided to enable members who wish to take part to do so accordingly.
- Equalities. Duties around the Equality Act 2010 and other equalities legislation continue to apply during the coronavirus pandemic. Whilst RSLs are not listed as a public authority in the Equality Act 2010, there is an expectation for RSLs to comply with the legislation whilst carrying out public duties. As a result, you should consider whether you require to carry out an Equalities Impact Assessment to help you to identify and appropriately manage any barriers to participation by members with protected characteristics.
- Voting. You should consider how to appropriately and confidentially handle any votes that need to be held during your AGM or SGM. The 2020 Act affords RSLs the flexibility to use a method for voting by electronic or any other means during the relevant period.
- Communication and notification. You should comply with the notification requirements for AGMs and SGMs that are set out in your constitution. Given that the arrangements for a virtual meeting are likely to be more complex, it will be important to support members with clear and accessible information about the arrangements for the meeting.
- Minutes. You should consider how you will record who attended the virtual meeting and the outcome of any votes.
- Member engagement. You should consider how you will ensure, where possible, members are able to take part in the meeting. The 2020 Act allows members to vote at the meeting however, they will be unable to participate in the usual manner. Consideration should be given to whether members will be able to ask questions and/or make contributions in advance of the meeting.
- Confidentiality. You should consider the suitability of the platform or IT system you use to hold your AGM or SGM, especially if the discussions could reference any sensitive or personal data.
Holding a virtual AGM or SGM may seem more complex, particularly if this is the first time you have held a large virtual meeting, but it gives an additional option to allow you to hold your AGM on time. The SFHA has published advice for RSLs on holding a virtual AGM and SGM.
The changes made by the 2020 Act will not give you the ability to hold your 2021 AGM or SGM virtually unless your AGM is due to be held before 30 March 2021, or the time period in the 2020 Act for holding virtual AGMs is extended, or your own constitution already allows it. If your constitution does not permit virtual AGMs and SGMs and you want to retain the ability to have virtual AGMs and SGMs you will have to change your rules to include a provision allowing you to do that, it may be helpful to make the change to your rules while the provisions on virtual AGMs and SGMs still apply.
If you decide you are unable to hold your AGM virtually and the restrictions on public gatherings remain in place this may mean you won’t comply with the provisions in your constitution about holding your AGM within 6 months of the year end.
We recommend that RSLs take appropriate advice to guide your decision about your AGM and make best endeavours to use the flexibilities introduced by the 2020 Act. If having taken advice you decide you will be unable to hold your AGM on time, please get in touch with us to let us know by submitting a Notifiable Event. Please be assured that our regulatory response will take account of the difficulties and issues that arise because of the restrictions on public gatherings.
If you have been unable to hold your AGM on time because of the Coronavirus you should arrange your AGM for as soon as possible after the restrictions have been lifted.
Approval of accounts at AGM
Being unable to hold your AGM shouldn’t mean your accounts can’t be approved. RSLs which are Registered Societies are not required by the Co-operative and Community Benefit Society Act 2014 or by the Model Rules to have their accounts approved at an AGM. RSLs which are Limited Companies are similarly not required by the Companies Act 2016 to have their accounts approved at an AGM. If you can’t hold your AGM you may still be able to approve your accounts on time. It is important that you take your own professional advice about how to appropriately approve your accounts, particularly if you have not adopted the Model Rules and might have different arrangements set out in your constitution.
Completing and filing accounts on time
We are aware that some RSLs are experiencing difficulty arranging for their accounts to be audited due to the impact of Coronavirus.
Section 70 of the Housing (Scotland) Act 2010 (the 2010 Act) requires RSLs to provide us with a copy of their accounts and auditor’s report within 6 months of the year end. To reflect the very challenging circumstances RSLs are operating in and the difficulties RSLs may experience in complying with the statutory timescale, the time period for providing accounts to us was extended for last financial year from six months to nine months. This change was introduced by the Coronavirus (Scotland) (No.2) Act 2020. For the financial year ending 31 March 2020, RSLs had up to nine months from their year end to submit their audited accounts to us. Accounts were therefore due by 31 December 2020. However, these provisions have not been replicated for the financial year ending 31 March 2021, so, currently, accounts for 2021 must be provided to us within 6 months of the financial year end.
If you are experiencing difficulty and are concerned your accounts for the financial year ending 31 March 2021 may not be submitted in time please contact your engagement plan lead.
In addition to the requirement to provide us with accounts and auditor’s report, some RSLs have other accounting obligations. Charitable RSLs are required to submit their annual accounts to OSCR within 9 months of the year end. OSCR has published guidance for charities on the impact of Coronavirus including on their accounting obligations, you can read the OSCR guidance here.
RSLs which are Limited Companies are required to submit their annual accounts to Companies House within 9 months of the financial year end. Companies House has published guidance for companies who are unable to file their accounts on time due to Coronavirus. You can read the Companies House guidance here.
RSLs which are registered societies are required to send their accounts and annual returns to the Financial Conduct Authority (FCA) within 7 months of the financial year end. The FCA has published guidance for societies on the impact of Coronavirus on their accounting obligations. You can read the FCA guidance here.
If you can’t carry out your tenant satisfaction survey
Landlords should carry out a tenant satisfaction survey at least every three years. However, we recognise that the impact of the pandemic may affect your ability to undertake a survey, or affect how you go about conducting your survey this year. If you normally carry out your survey using face to face interviews you could decide to carry out your survey by post or telephone. The Ipsos Mori Scotland guide gives further information about using post and telephone survey methods. During the pandemic you may consider using an online or digital survey tool as an alternative to face to face interviews. As with any approach, you need to assure yourself that the methodology you use will be inclusive and effective. We will take forward a review of the Conducting surveys of tenants and service users guide at a future point and our review will include considering online and digital survey approaches.