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Iraq is going to test our cherished ideals about democracy. Iraqis, or the US military, will have to agree on an electorate and on a basis for partisanship that does not involve shooting one's opponents.

Democracy is about complex institutions and social habits that permit disagreement while accepting the legitimacy of minority government. We are in no position to preach, since we know a great deal about the deformations and limits of democracy.

It is not, for example, much of a principle when it comes to running organisations providing such essential social services as housing. On paper, private-sector firms do ape some democratic forms: those with a ticket (share certificate) get a vote in a peculiar annual election and ballots take place as if companies had a monarch (the chair) and a prime minister (the chief executive). The analogy is less of a guide in the not-for-profit corporate sector. Who gets to vote in annual meetings of registered social landlords? Often it's "the members", usually a select band of ancients who – if they bother to turn up for the free lunch once a year – can be relied on to vote for the executive's ticket.

Most RSLs operate with a perplexing mixture of oligarchy (the perpetual rule of the few), democracy (tenants do vote, but only for a restricted number of representatives) and, in some instances, autocracy (try bucking the will of the chair or, in some cases, the chief executive).

Recently, into this mix have been tipped new thoughts from the private sector. In January, Derek Higgs produced a report for the Department of Trade and Industry that sought to rebalance the responsibilities of plc directors, giving non-executives the job of ensuring the chair is not too cosily in bed with the executive managers. In a parallel move, the government wants to make auditors the servants of the company's owners (the shareholders) rather than of the executives. These are important, if limited, changes to private sector mores, but are they relevant to RSLs?

The official line is that RSL boards should "take Higgs on board" so that they can qualify for City loans. But RSLs are different from plcs. They aren't owned. Of course their directors have large moral as well as legal responsibilities but they cannot be the same animals as company directors. One reason is that although RSLs may not themselves be democratic, they are public entities operating within a democracy. Ministers have some leverage over them, albeit through a regulatory quango.

RSL directors, like the Housing Corporation, should look to the public interest in how they operate. One of the strongest objections to full tenant "democracy" is that the interest of tenants in housing is a private one, and not to be confused with the public's interest in social housing. Accountability is one element in the democratic package but it is only one, along with "capacity" – the strength that RSLs and arm's-length bodies acquire thanks to their distance from government, allowing them to innovate and take risks.

Back to Iraq. Conventional wisdom says that having suffered under dictatorship for so long, social trust in Iraq is likely to be in short supply for years and trust will be hard to construct between rival religious and ethnic groups (as if we lacked for such social differentiation here).

But let's not pretend we have some simple formula. Often, trust is merely an unknowing willingness on the part of the public to let a variety of organisations – governed who knows how – just get on with it.