A leading housing association has been criticised by a government watchdog for failings at boardroom level.

Tower Hamlets Community Housing (THCH), which manages 2,000 homes, was warned by regulator the Homes and Communities Agency (HCA) that leadership issues could trigger “failings in risk management or internal control.”

The housing association’s board grew in September when four Independent cabinet members on Tower Hamlets Council were appointed by the borough’s mayor, Lutfur Rahman.

But the regulator’s judgement said: “THCH has not yet demonstrated that the skills of its board are aligned with the association’s range of activities and associated risks.

“Given its financial exposures, the regulator requires that the board has sufficient relevant financial, development and commercial skills.”

Despite the size of the 15-strong board, it was criticised for delegating some of its responsibilities.

“The board has inappropriately delegated to committees ownership and responsibility for key risks, and is concerned that this could lead to failings in risk management or internal control,” the judgement warned.

The four cabinet members are among a total of seven new board members to have been installed this year.

THCH chief executive Mike Tyrrell said the association will work on a timetable for reducing the number of board members to the 12 recommended by the regulator in its September judgement.

It will also limit their terms to six years. The current longest-serving board member was elected almost 14 years ago.

“I am pleased that the new rating given by the HCA still showed that THCH was properly governed and that the action to deal with the concerns they raised have been dealt with,” added Mr Tyrrell.