University governance in a new age of regulation; (PDF)

HEPI Report 119 University governance in a new age of regulation: A conversation between Professor Steven Jones and Nick Hillman, with a Foreword by Professor Michael Shattock  About the authors Professor Michael Shattock is the project leader for the research programme on higher education governance at the UCL / IOE and Oxford Centre for Global Higher Education; he has had extensive experience of advising governments and universities internationally and within the UK. His latest book, jointly authored with Dr Aniko Horvath, The Governance of British Higher Education: the impact of governmental, financial and market pressures, is due to be published in October by Bloomsbury Academic. Professor Steven Jones works at the Manchester Institute of Education, part of the University of Manchester. He writes about policy and practice in post-compulsory education, and has previously co-authored reports for the Sutton Trust, the Joseph Rowntree Foundation, the Higher Education Academy and the Higher Education Funding Council for England. Nick Hillman is Director of the Higher Education Policy Institute. Steven Jones and Nick Hillman are both members of the Board of Governors at the University of Manchester. Steven is an elected academic member and Nick is a lay member (and an alumnus). Nick is also a lay member of the University of Buckingham Council. Both have previously served as school governors. Steven was a community governor for a secondary school and Nick was a parent governor for an infant school. In this piece, Steven and Nick reflect not on any individual institution, but on the wider challenges for university governance during a period of unprecedented change within the UK sector.  www.hepi.ac.uk 3 Foreword Michael Shattock It is a pleasure to be asked to write a Foreword to correspondence about the role of governing bodies. Governance is much in the news both in corporate life and in the public sector. In uncertain times, governance – and whether its forms are fit for purpose – become a public issue. We should note that the Jones / Hillman correspondence deals with only one component of university governance, the governing body, albeit an important one, whereas in practice institutional governance encompasses senates / academic boards, faculties / colleges and a plethora of schools / departments, research institutes and student organisations, all of which are critical to some or particular parts of a university’s business. Pre-1992 universities like Manchester were designedly and by statute bicameral institutions, with senates described as ‘the principal academic authority of the University’ (Statute VII, University of Manchester) or in some universities ‘the supreme academic authority’. Given that teaching and research represent the core business, this should put the senate into the driving seat in terms of strategic planning, establishing priorities and all the key elements which contribute to reputation, external rankings and academic success. With senate representation comprising one-third of the lay membership on the governing body, the Manchester Statutes embody the concept of ‘shared governance’, a useful phrase originally created by the American Association of University Professors (AAUP) to describe the  4 University governance in a new age of regulation hard-won constitutional machinery created to link governing boards to their academic communities.1 By contrast, academic boards in the post-1992 universities operate within a unicameral constitution. A formal role in strategic planning was deleted from their constitutions in 1988, when the polytechnics were removed from local authority control, and it was not restored in the 1992 legislation when they became universities. This leaves institutional strategy – academic and otherwise – and related business firmly located exclusively in the hands of the governing body and the vice-chancellor. The strong tendency of government since the 1997 Dearing Report has been to favour the spirit of the post-1992 over the typical pre-1992 constitution. By putting pressure on governing boards to reduce the size of their memberships (including the academic component) and increasing their levels of accountability, they have created the assumption that governing boards are analogous in operational terms to company boards. This ‘business model’ is enhanced by the growth in universities of ‘the executive’, the product of the increasing size of institutions and the competitive pressures they are put under. The executive, usually meeting weekly, has in effect downgraded the influence of the senate in pre-1992 universities by simply bypassing them and has further depressed the status of academic boards in the post-1992s. It is easy to see why Steven Jones is concerned ‘that university governance seems detached from the day-to-day reality of many academics’ working lives’. When interviewing academics 1 As this report went to press, I was informed that, sadly, Senate membership of the Council is being reduced to only 20 per cent.  www.hepi.ac.uk 5 about governance, one comes across a wide sense of disempowerment. Why should this be a matter for concern, except for its effect on morale? In answer to Nick Hillman, it is because almost every managerial decision in a university has some academic implication which needs consideration if we want our universities to be truly academically competitive. In our forthcoming book, I use the phrase ‘the laicisation’ of universities to describe the way a model is emerging of a university governing body where the lay members operate as a group of company board ‘non-execs’ to call the executive to account, basing their rationale on external demands for accountability or preconceptions of how big organisations work in other contexts. But no corporate board could possibly operate satisfactorily in this way with no executive members, except the vice-chancellor, and with virtually all the members being non- executive. Nick Hillman’s definition of a good university board member (‘an intelligent person who asks ignorant questions’) does not suggest that either of the institutions where he is a member operates like this. But our research has thrown up examples of boards where the chair is effectively an executive chair, where the lay members, drawn from around the country and meeting only four or five times a year, have little knowledge of the institution and are largely dependent for decision-making on reports from the executive because they have few other sources of information available to them. The effect is to create a top-down organisational culture that runs right through the institution. Our evidence suggests there is considerable uncertainty in many universities in the definitions of roles on key issues between the most senior members of the executive and the chairs and the most active lay governors.  6 University governance in a new age of regulation This uncertainty has been added to by a decision to require governing bodies to sign up to giving assurance on the maintenance of academic quality. Board members have been required to give their approval to an increasing range of complex financial and value-for-money returns but are now also required to confirm that they have discussed action plans for the ‘continuous improvement of the student academic experience and student outcomes’ and that the ‘standards of awards for which [they] are responsible have been appropriately set and maintained’ (Hefce 2017). These requirements certainly extend far beyond the professional competence of the average lay governor and have encouraged lay members in many universities to ask to sit in on senates or academic boards to witness academic decision-making in action. Conflict and lay intrusion into the conduct of academic business must be likely to follow, especially in some ‘at-risk’ institutions. Even in areas where lay expertise and experience might be most useful to universities, for example in major long-range borrowing or the control of executive salaries, the record of the lay contribution seems to be very mixed and, in the case of vice- chancellors’ salaries, it has been disastrous for the reputation of the sector as a whole. My conclusion is that governments place too much expectation on the powers and capacity of lay-dominated governing bodies, acting as pseudo company boards, to manage and direct the affairs of universities. If universities are to be able to confront the difficulties that lie ahead in the next decade, we need to re-establish a partnership between governing bodies and senates / academic boards so that their strength and expertise can be drawn on together. It is easy to forget  www.hepi.ac.uk 7 that a senior academic may be experienced in the control of a budget of many millions of pounds, in leading a major research programme or in advising major public or private sector bodies, providing them with an expertise in the management and direction of middle to large-sized organisations at least comparable to that of many lay members. But equally significant is that such a partnership ensures institutional strategies are embedded in the institution and academic staff feel a sense of ownership of them. To make this effective, however, many of the pre-1992 universities need to address questions such as the over-large size of their senates and their methods of conducting academic business, to ensure that they are in a position to respond to the managerial demands posed by an uncertain external environment. In the US, it used to be customary for university boards of regents or trustees to be described as acting as a ‘moat and a bridge’ to the wider community (Epstein, 1974). It is worth reflecting on how much our governing bodies see themselves as having a role in defending their university’s interests as distinct from simply accepting bureaucratic impositions from outside. The Committee of University Chairs (CUC), which sponsors training for lay governors, appears nowadays to be a compliant body, indecisive in dealing with the vice-chancellors’ salary issue and too anxious not to get out of step with government thinking. Nothing I have said above, however, should be interpreted as doubting the value of lay involvement in university governance, not only because it represents the direct involvement of the public interest in the affairs of individual universities but also because it brings professional expertise and knowhow to key  8 University governance in a new age of regulation areas of institutional decision-taking. Even more importantly, lay involvement in university governance is invaluable in acting as the ‘critical friend’ on occasions when difficult and contested decisions have to be taken – the ‘conversations between insiders and outsiders’ that Nick Hillman refers to may be a polite way of describing them. We are fortunate in being able to attract so many well-qualified and distinguished professionals to commit themselves to helping universities in such a difficult environment. We should not be apologetic that the structure of university governance is sui generis and reflects the nature of universities as unique components of modern society and we should be continuously on our guard against attempts to impose constitutional models derived from other forms of organisation: the business model is no more appropriate than the military or the public service model. By way of conclusion, I will respond to three other points about lay membership raised in the correspondence. Nick Hillman asks why officials at the Department for Education (DfE) (or he might add UKRI) are not recommended to serve as lay members. There is, of course, a reason: the historical presumption has always been that the state should separate itself from any direct involvement with the management of individual universities in order to preserve their independence from state interference. Thus, the senior civil servant in charge of higher education in the Department had to leave meetings of the University Grants Committee, to which he was an accredited observer, when the affairs of any individual university came under discussion. For a modern analogy, imagine the situation of a university having a staff member of Research England on its governing body at the time of the Research Excellence Framework!  www.hepi.ac.uk 9 Steven Jones raises the interesting comparison with membership of school governing bodies. In my experience, all the members are local and, of course, there are parent governors. This ensures that governing bodies are relatively well-informed about the school independently of the headteacher’s report. Universities, however, were encouraged to dispense with local authority membership – the pre-1992 by the pressure to reduce the size of their memberships by the Jarratt (1985) and the Dearing reports (1997) and the post-1992 by the decision in 1988 to remove them from local authority control. This trend was intensified by universities’ own decisions to seek people of wider public standing who did not necessarily live in proximity to the institution. Although there are obvious advantages to such a policy, I agree with Steven that this has contributed to universities losing a sense of local-ness and, because of travelling times, it has had a perceptible impact on the way meetings are conducted, especially when committee meetings have to be held on the same day as the governing body meeting, meaning their reports are oral and cannot be read and considered before the meeting. It also strengthens the position of the executive as it reduces the influence of local information networks regarding the university and its policies. Finally, let me comment on Nick Hillman’s support for paying lay governors. This is a controversial question: the CUC has not been in favour but in our research we found chairs who are quite strongly in favour. The Higher Education Governance Act (Scotland) 2016 provides explicitly for the payment of lay governors but as part of a package designed to democratise governing bodies by making the chairs elective by students  10 University governance in a new age of regulation and staff and adding trades union representation. Its intention, therefore, as Nick Hillman’s, is to encourage people who could not otherwise afford to take time off work to put themselves forward. My concern about payment to individuals is that it potentially changes their relationship with the institution, and in particular with the vice-chancellor who might be seen as the essential decision-maker in such transactions. A further real danger is that payments to some governors such as the chair or the chair of the audit committee might over time climb, as it has in some companies, to levels that spark the kind of controversy we have seen over vice-chancellors’ salaries. Hospital boards, where payments are made, are often quoted as analogous to universities in this respect but the record of hospitals’ failure of performance does not provide evidence that payment attracts a better level of chair or lay member, or a higher level of commitment. Until we see a serious shortfall in the numbers of possible lay governors responding to invitations, I do not see any plausible trigger to change the practice of over a century of public higher education. References Epstein, L D (1974), Governing the University, San Francisco: Jossey-Bass Higher Education Funding Council for England (HEFCE) (2017), Circular Letter re Assurance Statements about Quality and Standards from Accountable Officers for 2017-18, HEFCE October 2017/37 University of Manchester, Statute VII The Senate  www.hepi.ac.uk 11 Exchange between Professor Steven Jones and Nick Hillman Dear Nick, It’s good to have this exchange with you. The role of university governors is beginning to get some critical attention, but it still seems neglected relative to the responsibility that it now carries. I sense that Board members across the higher education sector feel pulled in different directions. On one hand, there’s a traditional idea of ‘wise elders’ meeting to offer some light- touch and well-mannered guidance on a university’s general direction of travel. On the other hand, there’s a regulatory framework that positions governors as legal custodians of multi-million pound global organisations. The Office for Students wants Boards to be accountable for upholding ‘public interest governance principles’, but what are those principles and how best can they be defended? University staff who volunteer for governance roles are usually regarded with suspicion. I received condolences from some colleagues when elected! Maybe this follows a long tradition of academic misgivings about perceived compromises of ‘freedom’. Back in 1918, Thorstein Veblen characterised non-academics who join Boards as ‘quite useless to the university for any business-like purpose’.2 I was reminded of this more recently 2 Thorstein Veblen (1918), The Higher Learning in America: A memorandum on the conduct of universities by business men, New York, Cosimo  12 University governance in a new age of regulation when Peter McCaffery, a former Vice-Chancellor of the University of Cumbria, suggested Whitehall departments privately regard the way in which universities are governed as ‘bogus professionalism’.3 However, my main concern isn’t lack of knowhow. It’s that university governance – and the corporate model upon which it’s generally based – seems detached from the day-to-day reality of many academics’ working lives. In my experience, this gap is wider in the higher education sector than in the compulsory part of the sector, where the pressures of school teaching are perhaps better understood by governors. As an ‘insider’, I sense frustration among colleagues that representation on decision-making bodies is usually limited to a handful of staff, and that Boards sometimes focus on the narrow market needs of their individual institution at the expense of the wider societal contribution that universities make. As an ‘outsider’, what do you think? Dear Steven, Thank you for starting this important conversation. My experience is different to yours. When I was appointed as a lay governor, no one commiserated me. Nor did they congratulate me. Perhaps the silence reflects how poorly understood the 3 Peter McCaffery, ‘University governorship should not be like marriage’, 21 October 2018, https://wonkhe.com/blogs/university-governorship-should-not-be-like-marriage/  www.hepi.ac.uk 13 role of university governors is – far below knowledge about school governorship. I am amused by Peter McCaffery’s words but they don’t resonate with me. When I worked on higher education in Whitehall, little thought was given to university governance issues. There were many reasons for this but perhaps the most important is that Whitehall looks for big problems to solve and university governance seemed at the time to be ticking over quite nicely. Admittedly, my Whitehall experience came before the really big rows on vice-chancellors’ pay as well as before Hefce had made way for the new Office for Students. During my own experience as a governor at two universities, I have been impressed by the professionalism and calibre of the governors, especially the chairs. Many other lay governors that I have come across have fitted well into that general definition of a good Board member: an intelligent person who asks ignorant questions. That is not meant to sound rude: anyone who has ever been interviewed by the media knows that perceptive but unexpected questions can prove the most testing. An intelligent outsider’s perspective can teach an institution lots about itself – and, of course, new lay members rapidly stop being ignorant anyway. But no one associated with higher education must allow the core strengths of the sector to hide the need for constant improvement. Nor should we respond so defensively to media coverage that we refuse to look in the mirror for flaws. I want to avoid sweeping generalisations, yet I do worry that the quality of governance in our sector may not always be quite as good as we like to think.  14 University governance in a new age of regulation The regulation of higher education has been transformed in recent years, especially from the top via initiatives like the Higher Education and Research Act (2017), which puts far more onus on governors – including for the self-reporting of problems. I am not entirely convinced, as I travel up and down the UK speaking to senior managers and governing bodies, that governance has changed as fast as regulation. Perhaps it is naïve to think this could happen quickly but, unfortunately, the regulatory changes have occurred at the same time as other changes that have, in some instances, literally threatened the existence of long-standing universities. Moreover, people with experience governing other comparable bodies that sit between the public and private sectors – for example, in the health sector – often claim change has come later in higher education than elsewhere. Perhaps because I am not an ‘insider’, I worry less than you about the disconnect between academics and governors. For a start, I think the supposed disconnect is overdone: the input of academics at governors’ meetings (either as members or observers), at away days discussing strategy and in other ways is more common than might be expected. This helps to provide a map for those governors still trying to uncover the lie of the land. Lay governors come into close contact with the day-to- day life of academics in other ways too – for example, when chairing disciplinary review hearings. Despite all this, if I were an academic I might not worry too much about being ignorant of the finer points of governors’ latest discussions. These can be some way removed from the  www.hepi.ac.uk 15 core responsibilities of teaching students and pushing forward the boundaries of knowledge so could sap time and effort from the more immediate responsibilities that would have brought me into academia in the first place. Dear Nick, You’re right to say that academics would much rather be doing teaching and research than pondering institutional strategy. But in the last few years, we’ve seen an increase in staff becoming more curious – and then better informed – about how their universities are run. The pensions dispute is the obvious example, but there are other issues too, from capital expenditure to investment strategy. In my view, this is a good thing. But it does bring to the fore questions about who gets to govern our universities and what kind of values they bring to the table. Take the current composition of many governing boards. Having a lay majority is useful in that that universities are forced to justify their activities to people who come from different professional backgrounds and have different perspectives. For me, it’s always refreshing to hear non-academic voices – university staff quickly become institutionalised, losing touch with how the sector is viewed from the outside. But the lay- majority composition has drawbacks too, especially where academics are framed in negative terms: as change-resistant or ‘difficult’ or instinctively critical.