Over recent years, the UK higher education landscape has shifted as a result of political decisions, funding reviews and uncertainty about the future. Therefore, it is no surprise that the role of governance in HE institutions has become increasingly important, placing higher demands on governors themselves. While the legal framework surrounding governance in higher education hasn’t changed, the policy and implementation environment around it has. Both institutions and their governors must be aware of what it means for them and how they can better understand and address a shifting regulatory landscape.
Introduced last year by the new Office for Students, the regulatory framework for higher education places great emphasis on the role of the governing body and highlights the breadth of issues within the institution that it is responsible for managing. These range from strategic oversight of the whole student experience through to responding to media and politically driven issues (for example, senior executive pay or freedom of speech). Governors must be confident in identifying risks throughout all these areas.
The regulatory framework is designed to mitigate the risk that four primary objectives of higher education are not met; these relate to access and success in higher education for all, the high quality of education all students should receive, the ability to progress from higher education to employment and the value for money of courses. These are profound and broad issues for the institution to address. However, the new framework only covers the teaching and learning aspects of the activities undertaken at the university – other important functions, such as research and civic mission, are covered either by an alternative central body (UKRI) or have no regulatory or centralised attention at all. The governing body remains responsible for all these areas, notwithstanding the regulatory focus on teaching and learning.
It is human nature to underplay how serious it is when things start going wrong
Evidently, a breadth of knowledge is required from all members of a governing body in order to successfully fulfil their role. While non-executives from the world of business who discharge these kinds of roles may possess high-level financial insight and leadership experience, they may not necessarily have had academic experience or the confidence to make judgements on more education-specific matters.
Levels of experience of such matters within governing bodies in the sector are hugely diverse. While some have industry experts who are more than able to challenge and hold executives to account, in some cases, the governing body is dependent on the executive to guide them in overseeing the institution’s academic performance.
Examples of best practice involve executive teams who are open and transparent with the governing body about institutional challenges, and a governing body which offers support to executive teams while holding them to account. In these cases, the system works in harmony. However, human nature dictates that there is a tendency for people to underplay how serious it is when things start going wrong. Consequently, the model – based on a mutual relationship of trust – can sometimes break down too.
Factors such as Brexit and ongoing funding reviews place an additional burden on governing bodies as they adapt to the objectives set out by the regulatory framework – these external factors only go to exacerbate capacity and capability issues, making it more difficult to plan long term.
The work we have done with institutions, on the regulatory framework and more volatile HE landscape generally, has highlighted to us how little investment institutions have typically made in getting governance right. Many of the structures and ways of working existing today have been around since the 18th century and it begs the question: are these constitutions still the right governance systems for a sector which has evolved so dramatically in recent years?
UK higher education is dependent on an amateur volunteer model in terms of its governing bodies, based on the one which exists in the broader charity sector. Higher education can be distinguished from other charitable spheres in the sense that it is highly marketised and based primarily on the principle of competition, creating institutional instability and vulnerability. In some situations, it may not be sustainable for laypeople on a volunteer model to be responsible for the financial sustainability and success of multi-million-pound organisations, with many moving parts.
There is a growing awareness that things cannot continue to function in the way they currently are. A good example is the recent controversy surrounding vice-chancellors’ pay. This is set by governing bodies, and yet as column inches continue to be filled with attacks on the subject, governing bodies struggle to confidently justify the pay at the levels they had set. The result has been significant reputational damage to some institutions and to the sector as a whole.
It is, therefore, unsurprising that many institutions are now looking at how they can boost the capacity and the confidence of governing bodies to act where needed. Investment should be made in updating and modernising governance structures as well as thoroughly inducting and training those working in the specific roles. However, this approach needs to be sympathetically designed, recognising that as volunteers, governors may not be able to commit yet more time to being trained or to delivering their governance functions.
It may be necessary to think more radically, perhaps looking again at unitary boards where both executives and non-executives are represented and are jointly responsible for making decisions, and for their consequences.
In higher education, the executive team is not usually represented in the governing body except by the vice-chancellor, with the result that, in some cases this has meant that the executive makes the decisions; and non-executives – the governors themselves – are responsible for dealing with the consequences.
In order to ensure that universities stay strong in a changing climate, a strategy which focuses on how best to invest in governing bodies needs to be considered at a sectoral and institutional level. Too often the conversation focuses on whether to pay governors, but of itself, this may not improve quality of governance.
It is unsurprising that the new expectations of the regulatory framework have caused some confusion amongst governing bodies. However, more can be done by both institutions – and their governors – to better understand and address a shifting regulatory landscape, to ensure that they are ready to face bumps in the road ahead.
Smita Jamdar is head of education at law firm Shakespeare Martineau