Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
There is no doubt that the new Regulatory Framework places greater responsibility on boards, expecting them to think strategically and to scrutinise the RP’s performance, compliance with standards and adherence to the code of practice. One of the key questions that the Regulator will ask the board is whether the RP is effectively led and controlled. Underpinning this is having the right people, with the right skills, at board and management level, to ensure that standards are being met. You would be well advised to carry out a detailed review to identify the skills and experiences needed within both your boards and executive teams to deliver your organisation’s strategy. Boards need to be satisfied that their executive teams have the skills to deliver their particular business – however diverse it might be –including the skills necessary to “stress test” the strategic plan, and vice versa. This may mean identifying areas of focus for future board recruitment and where it may be time for some board or executive team members to move on.
The end result should be that RPs:
- are clear on the skills they need at executive and board level;
- have clear roles, responsibilities and accountabilities for the board, chair and chief executive, as well the wider executive team; and
- are satisfied that any gaps in skills are addressed through an appropriate development programme, restructure or recruitment.
However, the right people and structure to lead the organisation is only the start. The Regulator’s Code of Governance states clearly that an RP needs an overarching, appropriate skills strategy to ensure that across the workforce have the necessary skills to deliver the RP’s business objectives. This skills strategy should then be reflected in the person specifications for all posts. It should also feed the RP’s learning and development strategy and help identify areas where more proactive performance management may be required.
Our view is that the new Code should have a direct impact on an RP’s people strategy and be treated as a tool to go beyond regulatory compliance to deliver excellence, taking into consideration the recommendations above.
For more information
Contact Kate Watkins.
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