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

Lessons Learnt from the University of Dundee (Part Four)

This is the final part of a four-part series, which presents some of the key learning points arising from the report by Professor Pamela Gillies into financial oversight and decision-making at the University of Dundee. It raises a number of questions for discussion by HE governors and leaders.

You can read the other blogs in the series here:

• Part one – Overview
• Part two – Accountability, risk and governance operations
• Part three – Financial management, operations and financial reporting

Culture

The third element in the Committee of University Chairs (CUC) Code is concerned with reputation:

The governing body safeguards and promotes institutional reputation and autonomy by operating in accordance with the values that underpin this Code, its various elements and the principles of public life.

Two of the additional points under this element of the Code are relevant here:

Members of governing bodies must always act ethically in line with the principles of public life (the Nolan principles), the institution’s own ethical framework, and in the interests of the institution, its students and other stakeholders.

Promoting trust in institutional governing bodies requires assurances that there is effective communication with relevant stakeholders, including the reporting of significant changes in circumstances. Governing bodies will need to consider how they engage stakeholders in decision making and how they publish information and report performance to stakeholders.

And the primary responsibilities of the governing body as set out in CUC Code include the following:

7. To conduct its business in accordance with best practice in HE corporate governance and with the principles of public life drawn up by the Committee on Standards in Public Life.
8. To safeguard the good name and values of the institution.

As with other issues, the Scottish Code is more detailed than the CUC Code on this point (the CUC Code was stripped back some years ago). It notes that nine principles – the seven Nolan principles supplemented by Duty and Respect – together form the foundation for the governing body’s behaviour and its decision-making processes.

Of the recommendations made by Gillies for general consideration are two strong exhortations relating to culture and values:

10. 10. Both the UEG [University Executive Group] and all members of Court should live the nine principles of public life;
11. 18. A values-led University culture, which privileges transparency and accountability, is likely to actively support evidence-based collaborative decision making, integrity and openness to challenge and debate.

Curiosity and challenge

In addition to these very clear expectations regarding both governing body and executive culture there are several important points made by Gillies about the need for proper questioning and challenge. There are a number of references in the report to the reluctance of senior staff in particular to raise concerns and ‘speak truth to power.’ Curiosity and challenge are vital cultural practices for ensuring governing body and management effectiveness.

Element five of the CUC Code includes the following specific point on this topic:

An effective governing body has a culture where all members can question intelligently, debate constructively, challenge rigorously, decide dispassionately and be sensitive to the views of others both inside and outside governing body meetings.

Three of the recommendations made by Gillies for general consideration focus on questioning and curiosity:

5. There needs to be a culture (in practice) of the validity and value of questioning at all levels in a way that is without fear;
6. The Chair of UEG (ordinarily the Principal) should be receptive to challenge;
7. Curiosity should be encouraged (and whether at UEG, ARC [Audit and Risk Committee], Finance Committee or Court) – one person’s ‘innocent question’ (“I don’t really understand but…”) is often a catalyst for another person and the engagement leads to a far richer understanding and potentially uncovering of risks and issues that are worthy of debate;

This openness to challenge and a welcoming of curiosity are strong indicators of a healthy culture within the governing structures of an institution. Another facet though is the need for openness, transparency and broader engagement with the institutional community.

Engagement

The sixth element of the CUC Code covers the issue of engagement:

Governing bodies understand the various stakeholders of the institution (globally, nationally and locally) and are assured that appropriate and meaningful engagement takes place to allow stakeholder views to be considered and reflected in relevant decision-making processes.

This section of the Code also includes the following specific point:

The governing body needs assurance of regular, effective two-way communication with students, staff and other stakeholders, and must be advised of any major issues arising.

A related recommendation is made by Gillies in the list of issues for general consideration:

8. There should be clear and unambiguous early communication to Court and its committees regarding matters of importance to the whole university;

Dialogue with staff and students on difficult issues around savings, restructuring and reductions in investment that may be required are likely to be challenging. But they are going to be much more productive in the early stages of a strategic reassessment than after a disastrous fall out. In any discussions held with university staff the governing body needs to recognise that senior managers tend to be more optimistic, other staff less so.

Both can be right, but the basis for their assessments needs to be properly questioned. Senior staff are more likely to have a rounded picture and a longer-term view of the strategic opportunities. However, it is possible they may also be in denial about the evidence which contradicts their position. Other staff may be better sighted on operational realities but also could be generally disposed to scepticism about the veracity of senior management commentary.

Everyone needs to be challenged, but the important point from all of this is that two-way communication needs to be planned and executed regularly, and the governing body properly assured it is happening and that it is alerted rapidly to any issues emerging.

Discussion points for governing bodies and executive boards

• Is the governing body operating in line with the principles of public life? How does it know? Do governing body members and executives live these principles and behave ethically and in line with the stated institutional values?
• Is there a culture of challenge, curiosity and effective scrutiny within the governing body and its committees (and at the executive level)?
• Are there examples of individuals feeling able to question senior leaders in formal university meetings and other contexts?
• Do stakeholder views genuinely inform decision-making at the governing body?
• Are there means for effective two-way communication with staff and students and for alerting the governing body of issues arising?

How can we help?

You can read the three previous blogs in the series here:

• Part one – Overview

• Part two – Accountability, risk and governance operations

• Part three – Financial management, operations and financial reporting

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.