Issues for Consideration by Governing Bodies and Executive Boards | Lessons Learnt from the University of Dundee (Part One)

Governance lessons from the University of Dundee financial crisis

What happened at the University of Dundee?

In June 2025 a report was presented by Professor Pamela Gillies to the Scottish Funding Council (SFC) setting out the findings of an investigation into financial oversight and decision-making at the University of Dundee. The SFC commissioned this independent investigation in order to determine the causes and contributing factors to the deterioration of the University’s financial position as revealed to its Court on 12 November 2024. The SFC wished to understand how it was possible that the financial deterioration of the University had not been identified by the University Executive Group (UEG) earlier and notified to the SFC.

The full report can be downloaded from the SFC website here and it contains a great deal which will be of interest to governing bodies and executive boards.

In this comprehensive blog, we present some of the key learning points – which go far beyond the particular circumstances of Dundee – and highlight a number of questions for discussion by HE governors and leaders.

What were the issues?

The foreword to the report by Professor Gillies provides a concise summary of the specific failings:

The main causal factors of the financial failure uncovered by this investigation are largely specific to the University of Dundee. They include poor financial judgement, inadequate management and reporting, poor monitoring of the financial sustainability key performance indicator, lack of agility in responding to a fall in income by the University leadership and weak governance in relation to financial accountability by the Court. Financial oversight was lacking when most needed.

These failings were compounded by the top-down, hierarchical and reportedly over-confident style of leadership and management, a lack of transparency and clarity in respect of financial data, the promulgation of a positive narrative around financial matters and a culture in which challenge was actively discouraged.

Key lessons to be learned for the University of Dundee and the sector are captured in this report. They cover themes relating to: financial acumen; the accurate, consistent, clear and comprehensive reporting of financial data; the importance of a knowledgeable, responsive and effective Court holding senior management to account and the value of an engaged workplace and inclusive University culture in which challenge and dissenting voices are welcomed and listened to.

The consequences have been significant and far-reaching with loans required from the SFC to keep the university afloat and the departure of a number of senior staff, including the Principal and Vice-Chancellor.

Many of these failings should resonate with institutions across the sector, though not to the same extent and not coinciding to the same degree. The Office for Students (OfS), for example, has alluded to its concerns that governance in the sector may not be well equipped to deal with the challenges the sector in England now faces. It would be a mistake, therefore, not to take the opportunity to reflect on what the wider sector can learn from Dundee and the Gillies report.

What was the challenge for university governance?

Gillies presents a chronology of issues going back to August 2021. Some of these issues, particularly the deeper cultural matters, predate that starting point but remain worthy of consideration

The single pervasive issue that emerged from the investigation was the extent to which cultural context and values in relation to leadership and governance contributed to the financial difficulties experienced by the University. A summary of submissions made to the investigation include comments on: issues in the presentation, clarity and interrogation and understanding of financial data; inhibition in expressing opinions most especially dissenting views; leadership style promoting a positive narrative; lack of collaborative working at UEG; poor transparency with respect to decision making and information sharing; and limitations in the challenge from Court and in monitoring key performance indicators. However, there were individual and collective failures in the financial governance of the University.

The key reference documents here are the Committee of University Chairs (CUC) Higher Education Code of Governance from 2020 and its Scottish counterpart from 2023, the Scottish Code of Good Higher Education Governance. There is also the Financial Memorandum with the Scottish Funding Council (OfS regulatory framework in England).

The CUC Code and the Scottish Code essentially cover the same ground, although the latter document does go into considerably more detail than the former, which is more principles-based. . The CUC Code is currently under revision, and we can expect more advice for governing bodies following the Gillies report.

AdvanceHE has helpfully published recently a report arising from its ‘Big Conversation’ on higher education governance. This report, which sets out 10 priorities to enhance higher education governance, suggests a number of changes including in relation to board composition, more agile decision-making, proactive scenario planning, transparency, strategic partnership and regulatory compliance openness.

What should governing bodies be doing to respond?

In considering the fundamental governance issues arising from the Gillies report, governing bodies will be well advised to set aside the idea that the set of circumstances which led to the crisis point at Dundee was unique to that institution. Drawing together the themes in the report, governing bodies should, in our view, take the opportunity to consider how comfortable and confident they currently feel in dealing with the following areas:

• Part two – Accountability, risk and governance operations

• Part three – Financial management, operations and financial reporting

• Part four – Culture, challenge and openness

How can we help?

If you would like any further information or support in relation to higher education governance issues, then please do get in touch with our expert education team.