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A recent National Housing Federation seminar was entitled To Pay or Not to Pay?, but this is not the defining question for associations. The burning issues for all organisations, whether or not they pay their non-executive board, are how they define good governance, how they know whether they've got it and what they do if they haven't.

The report on private sector governance undertaken by former banker Derek Higgs for the Department of Trade and Industry has been much vaunted as an example for the housing sector, but I believe much of the talk about Higgs misses the point. Yes, the report sets out a valuable revised code for boards of PLCs aiming to achieve better governance through the more effective use of non-executive directors, and its twin aims of improved accountability and better managed businesses are relevant to the housing sector.

Yet one size can't fit all, as Higgs acknowledges. I would turn first to the 1992 report by Lord Cadbury for advice. Higgs offers a framework for how to get good governance in the company sector; Cadbury addresses the essential question: "what for?"

Housing associations must answer that question first, and so should the Housing Corporation. What exactly are the outcomes of good – or bad – governance? How do we assess it, and who judges in the absence of shareholders as owners? If we can't be clear about the outcomes of continuous improvement in boardroom performance, we will expend a lot of effort and perhaps our tenants' money to no avail. How can we improve our strategic planning and risk management? Our performance delivery? Our oversight of controls and proprieties? These are the key questions for any board.

A non-executive's life is one of real responsibilities, whether to shareholders, tenants or regulators. It matters not one jot to anyone whether you are paid or unpaid. Penalties for failure quite rightly attach to board members as well as to executives; public opprobrium can certainly damage your health and career. This concentrates the mind wonderfully. We have to be clear about this when appointing and supporting board members, appraising performance and addressing the transparency of our results. The principles of good governance are openness, integrity and accountability.

If we can’t be clear about the outcomes of improving boardroom performance, we will expend a lot of effort – and money – to no avail

Perhaps paying board members would make us more comfortable about taking a professional and rigorous approach to these responsibilities. It may also help in justifying the more rigorous appraisal processes that the Housing Corporation says are now essential tools for achieving continuous improvement in board performance. But it won't change the task or its importance. Whether the benefits of payment exceed the costs – administrative as well as financial – will be for each organisation to decide.

It certainly won't bring good governance automatically. Robust and professional relationships that build trust matter more.

It isn't easy to define the impact of independent, experienced and constructive challenges on business outcomes, but as a chief executive I certainly know their value when they are there.