Advance HE Governance Conference 2023 Governance Culture: Navigating policy, politics and people

At a glance:

• The classic view of universities as distant bastions of knowledge needs to be left behind. The ivory tower should become the “glass box”, characterised by transparency, humility, networking and engagement, delegates heard
• Governors cannot be all things to all people. Boards should be strategically clear about roles and responsibilities, have a rigorous focus on impact and the ability to horizon-scan for big events/trends that influence the future, such as the impact of AI. Defining strategic objectives and ensuring they are delivered can be the “North Star” for governors in a constantly changing environment
• Genuine board diversity in class, race, age etc is hard to achieve. As the role is voluntary, governors tend to be retired and affluent. Without remuneration, this is unlikely to change. It may also be a barrier to recruiting governors with the right skill sets. In addition, with the new regulatory demands on boards, the governors’ role has become more demanding. This further strengthens the argument for remuneration, but it is a difficult case to make in the current financial climate.
• Boards must guard against group think and unconscious bias in recruitment and also be aware of cultural differences in communications. Board apprenticeships can be an effective way of creating a pipeline of recruits. A strong induction is vital and should not be just a one-off activity
• When a board/VC fails and is replaced, there can be a tendency to overcompensate, as onerous reporting demands can hamper decision making. This can expose a tension between agility and democracy within boards
• Governors should be mindful of avoiding too much complexity in strategic plans. If staff do not know and are unable to outline key themes, even the best laid plans are likely to be ineffective. Policies can look fine on paper but people have to be able to follow them
• Ad hoc committee meetings, drop-in sessions on a theme or looking at a topic in more detail can aid agile governance. One university has instigated free form off-agenda discussions. Lay governors can bring important new perspectives
• The national narrative of “rip-off” degrees is hard to recognise and often does not land locally. Universities can look to local politics to garner support and use civic engagement to demonstrate value
• External governors can act as champions and open up networks. Universities will become more permeable if their approach is “how can we help solve your problem” rather than “these are our problems”
• Board secretaries and clerks are “honest brokers”, acting as an interface between governors and the executive. They should be able to offer independent advice and to act as a whistleblower if necessary
• The question of “how do we know it works?” is critical and depends on asking for and receiving good data and being able to drill deeper. Other evidence, such as campus/faculty visits and speaking to staff and students, can support this
• The position of chair is crucial in setting the board culture and keeping governors feeling engaged, confident and listened to. The chair has a responsibility to be welcoming, curious and interested and to shut down unacceptable behaviour in discussions. The chair and VC relationship is also crucial. There needs to be an honest discussion of roles and responsibilities. Some boards have regular meetings minus the executive and clerk, which is fairly common practice outside of HE
• A good culture can be characterised by a board/council that encourages constructive challenge. It can be a good idea to agree a code of conduct/behaviour to clarify acceptable communication, style and language. Some institutions use governor performance reviews to establish training needs and get feedback
• Research into CEOs/boards in industry suggest three pointers to success: a culture of learning, doing the right thing for the right reasons, and a chair/CEO who members see as “a good listener”
• Board evaluations, which should involve private interviews with members, can yield important feedback and help boards to do things differently. Efforts should be made to establish the appetite for change at the outset
• Good governance is a means to an end not an end in itself. The approach of the OfS is based on three main concerns – quality, financial sustainability and the protection of public funds
• Most institutions are in good financial health but are in a constrained operating environment that will continue for some time. OfS Chief Executive Susan Lapworth urged universities to engage with the regulator if there are concerns about financial performance. In a bid to address the reluctance to engage through fear that “it will get out”, she emphasised that much of the work happens “behind the scenes”

Implications for governance:

If culture starts at the top, board culture, and how it influences approaches to the intertwining elements of policy, politics and people, is critical. A chair who is engaged in active listening contributes to a culture in which boards are willing to learn and through that, more likely to ask the right questions.

The position of chair, and the relationship between the chair and the VC, was mentioned frequently by the range of board members, chairs, governance professionals and members of the executive who made contributions throughout the conference.  

Having clarity about roles and responsibilities can avoid the kind of tensions that arise between boards and the executive, while setting clear strategic objectives and focusing on them can prevent governors from being distracted by the constant noise of a changing environment. 

As at last year’s conference, the question of remuneration was on people’s minds, with discussions about whether the new demands and duties on boards means the role is more akin to that of a non-executive in industry or the NHS – roles that are paid.

An example was given of a private university where the heavy lifting is done by six to nine non-executive board members. However, one VC mentioned the benefits of a larger board (20 plus members) with a wider span of skills and capabilities and diversity of voices.

Improving diversity, succession planning and ensuring governors receive the right support were major preoccupations, with some practical suggestions arising - from ad-hoc committees and information sessions, giving more support to governors without portfolio, to drawing up codes of conduct.

While a welcoming and open culture is important, the point was made that too much agreement is not necessarily a positive. Constructive challenge and the avoidance of optimism bias ensure the right, and sometimes tough, conversations are being had. For instance, on dealing with freedom of speech legislation, keynote speakers were in agreement that universities cannot retreat or shield themselves from debate and need to have clarity upfront about how they will protect the voicing of opinions but respect the sensitivities that may arise around it.

Engaging directly with the national debate was suggested by one chair who, along with seven other governing boards in Wales, wrote to the education minister about concerns over funding levels.

While national politics and policies may take up substantial agenda space, a number of speakers emphasised the importance of local politics and civic engagement, where universities can have a direct impact and help shape the agenda. One chair said that his university playing fields, which were only used on Wednesdays and Saturdays, have been recently opened up to the public, making a “massive difference” to the local community. Another university has worked with the local council and development organisations to take over a city centre building recently vacated by a department store, enabling the partnership to secure £20 million of Levelling Up funding.

According to OfS CEO Susan Lapworth, universities need to continue to find ways to operate in the current funding landscape, as factors such as inflation, estates that need investment, and competition for students, are issues that are “going to be with us for some time”.

Governors may also wish to note her comments about the quality assessment reports that the OfS published recently, following investigations at a number of providers. She said that assessors were recruited on the basis that the probes are an academic endeavour and not a bureaucratic exercise, providing a real opportunity to shape the development of teaching and learning.

From a governance perspective, boards needed to be “clear eyed” and ask “sharp questions” about weak performance against the B3 conditions on student outcomes, such as “how do you know that students are getting the support they need and if they are not, what would you do?”. Quality assessment reports can be used to prompt thinking about making changes.

A rapid and significant growth in franchise arrangements is another area of OfS focus. The regulator is looking closely in this area “to establish if the returns made to the Student Loans Company are accurate”. In some cases, funding has been clawed back, said Lapworth.

In an effort to be more transparent about its work and engage more widely, the OfS recently held a meeting with audit committee chairs. A similar gathering of university board chairs is being planned.

In summary, the Advance HE conference highlighted a wide range of issues and challenges currently facing governors, but a common theme throughout was the importance of ensuring boards are made up of the right people, and of creating and maintaining a culture that allows for a diverse range of voices and viewpoints to be heard.