CUC publishes new Remuneration Code
We have had a welcome respite from stories about Vice Chancellor’s pay over the last few months, but the publication of the CUC’s revised Remuneration Code has sent the subject back up the press agenda.
The Code itself treads familiar CUC ground: principles-based rather than prescriptive, and respectful of the autonomy and diversity of CUC’s members.
There are three key elements to the Code which are in turn underpinned by a series of principles. They are:
- Fair and justifiable remuneration. Relevant principles include linking remuneration to the institution’s context and strategy, the value delivered by the individual and the individual’s performance.
- Procedural fairness. Relevant principles include that heads of institutions should not sit on remuneration committees, that levels of senior pay should take into account the proposed increases for other staff, and that the remuneration committee should be independent and competent.
- Transparency and accountability. This essentially involves the publication of an annual report setting out the policy and approach to remuneration, and the pay multiple between the head of the institution and the median earnings of the whole workforce.
The new Code has perhaps predictably been dismissed as “woefully inadequate” by UCU. The efficacy of the Code is likely ultimately to be judged by two measures:
- whether it actually results in a reduction in the highest levels of pay in the sector; or
- whether institutions who follow it are better able to justify their decisions to staff, students and other stakeholders.
The overlap with the Regulatory Framework should also be borne in mind. Under the management and governance condition, and in connection with the public interest governance principles, the OfS has stated it will consider the extent to which a provider has published a written commitment to comply with the Code and also the visibility and strength of that commitment. If the provider does not intend to comply with the Code it will have to explain why.
Under the accountability condition providers have to comply with an accounts direction relating to senior staff play which involves the disclosure of specific details of senior staff packages and the justifications for them.
Perhaps this is where the greatest change lies. Now the sector has a formal regulator whose job it is to scrutinise compliance with the new Code, and which has the power to impose sanctions if it does not feel that a provider is addressing the issue. It will be a test of the OfS’s priorities and independence as to whether it yields to the pressure that it will undoubtedly come under to take action, or whether it treats the issue as what it really is: a sideshow in the great debate on what value for money means in the context of higher education.