On University Governance
… beyond assurance
TL;DR: The Committee of University Chairs (CUC) Code of Higher Education Governance raises expectations of university governing bodies and strengthens oversight in sensible ways. But universities face a challenge that extends beyond assurance – institutional transformation. Governing bodies need to become partners in strategic adaptation, supported by renewed academic governance. Governance must evolve beyond assurance if universities are to preserve both their academic purpose and their public legitimacy.
The Committee of University Chairs (CUC) has published a new Code of Higher Education Governance intended to set expectations for governing bodies. I would not be surprised if you had not noticed this. If you are engaged in university leadership it should have reached your inbox, though perhaps not your reading list.
It is, I think, a thoughtful and largely unexceptionable document, understandably concerned with the mechanics of governance. It places considerable emphasis on financial resilience, sustainability, assurance and risk. It also acknowledges the importance of public trust, what I have elsewhere described as a university’s social licence. It treats this, however, largely as an outcome of good governance rather than as something governing bodies themselves must actively cultivate. I judge this to be a key shortcoming. Universities derive their authority from sources beyond regulation. Students, employers, governments, local communities, funders and taxpayers each form their own judgement about whether universities continue to justify the autonomy they enjoy. Governing bodies therefore have responsibilities extending beyond financial stewardship. They are necessarily custodians of institutional legitimacy.
The central effect of the Code as it stands is to raise the expectations placed upon governing bodies and to extend their responsibilities in relation to executive management. It is not explicit about an expanded model of board accountability, but that expansion is implicit throughout the Code. Governing Bodies are expected to satisfy themselves on an ever wider range of institutional activity. Responsibility has increased although authority has not.
I am not entirely sure that, in the present circumstances, I would choose to become a non-executive member of a university governing body. Many years ago I served on an NHS board. Meetings consisted largely of reviewing risks, many of which had no realistic mitigation available either to the board or, for that matter, to the executive. Responsibility far exceeded practical control; it was not an experience I would care to repeat.
As financial, regulatory and reputational pressures increase, governing bodies naturally seek additional assurance. The easiest route is more reporting, more scrutiny and greater involvement in executive activity. That response is entirely understandable. It is also capable of changing the relationship between governing body and executive in ways that reduce clarity of responsibility and slow institutional adaptation.
The governance arrangements that most universities have inherited were developed for institutions operating within relatively stable assumptions about funding, regulation, technology and public expectations. The current situation of UK universities is not ‘business as usual’. We are resting on the cusp of a period of major disruption. Our operating models, workforce, and academic activities – both research and teaching – require wholesale transformation. Student expectations continue to evolve. The configuration of the sector is set for substantial change through mergers and consolidation. We must navigate all of this with very limited financial headroom, constrained capital investment and uncertain public and staff support.
Greater assurance undoubtedly has value. It improves visibility of risk and strengthens accountability. It also consumes organisational capacity and can reduce agility. Most governing bodies were not designed to lead fundamental organisational redesign. That requires different expertise, different rhythms of decision-making and a different relationship between governing bodies and executive.
Nor is the coming transformation primarily a governance problem. It is a strategic and technological one. Universities are becoming increasingly digital organisations. AI will reshape universities from admissions through curriculum design to research practice, professional services and student support. Its effect on institutional behaviour is likely to exceed that of any governance reform. Governing bodies therefore require confidence in technology and institutional transformation alongside the more familiar disciplines of finance, audit and risk.
The Code gives greater prominence than its predecessors to academic governance, and properly so. Universities are not ‘corporations’ delivering services. Our academic communities are central to legitimacy, quality and long-term success. Effective governance therefore depends upon a productive relationship between governing bodies, executive leadership and academic governance. Assuring academic standards is necessary but not sufficient; we need to ensure that academic judgement plays a formative role in institutional strategy and adaptation. This suggests that current models of academic governance have a great distance to travel.
If the sector is to respond successfully to the challenges ahead, governance itself must evolve. The relationship between governing bodies and executive should be characterised by trust, delegation and strategic partnership rather than incremental extension of oversight. Governing bodies should concentrate on purpose, long-term strategy, institutional capability, risk appetite and stewardship. Executives should retain the authority and freedom necessary to deliver change at pace. Academic governance should be renewed and strengthened as an essential component of institutional leadership rather than regarded principally as an assurance mechanism.
The next phase of university governance will not be defined by stronger audit committees or more comprehensive reporting. It will be defined by whether governing bodies can help universities navigate profound institutional transformation whilst preserving their academic purpose and public legitimacy. Another dashboard, a few more KPIs, or a longer risk register just will not cut it.
Nicely nuanced article. Surely the foundational problem is that our whole public sector has a skewed view of risk - if you manage (i.e. minimise) it, all will be well. Better safe than sorry has become a mantra without asking who will be safer and who will be sorrier.
Our corporate experiment, now well into its second century, shows that risk and success dance to a more intricate measure - sometimes into growth, sometimes to destruction.
And so, our educational sector, and the NHS are in peril until we find a less primitive take on risk.
Lots to say here. Formally most pre and post 92 universities are corporations. They are mostly charities as well with the Board/Council as trustees as well as (technically) corporate directors. Pre-92 universities are chartered corporations established by Royal Charter or Act of Parliament, established in constitutional law rather than company law. Post-92s are Higher Education Corporations under the 1992 Act and the 1988 act. So ‘corporate governance’ is right. And the esteemed Prof Serious (after all, a VC) underplays a little the role of Councils when just concentrating assurance. The Council (with some exceptions) are responsible as the ultimate decision maker though delegating day-to-day operations to the executive team and deferring to the academic senate on specific educational matters. And I know from personal experience of both HEFCE and OfS that they do engage with the Boards, albeit that in general the engagement is with the executive.
David Walker rightly draws attention to the issue of representative members. I think it is worse than he suggests as many board members (other than staff members) are essentially representing a stakeholder group (whether it be local residents or businesses ) and most - in my experience - board members have limited understanding of the constraints and drivers which the executives face. So yes, there is not easy alignment given that the formal responsibility of board members is to the institution as an entity, balancing the interests of multiple stakeholders but in their capacity as board members they are not responsible to the stakeholder group from which they were drawn. Squaring that is challenging for everyone.
Things are slightly different in Scotland (though not much) but it was visible to all in the painful public hearings that Dundee’s Court had failed the failed the institution in addition to the very serious weaknesses at executive level. A large part of that failure appears to have been in the assurance function but underneath that the university had challenges in terms of strategic direction for which the Court was unequivocally responsible. For those universities which face existential challenges - and I wish that was not so - the primary responsibility for direction lies with the governing body. As I have heard the story the early-ish stages of the City St George’s merger involved the Boards agreeing to pursue the plans developed - as you would expect - by the executives. And so it should be - get the Board on board early!