Independent Higher Education (IHE), an organisation for independent and alternative providers, has worked with its membership and the sector more widely to develop a new and more flexible Code of Governance which is tailored to the diverse contexts in which the UK’s independent institutions operate. The draft code comes at a significant juncture in the development of university governance, following updated guidance from the Committee of University Chairs and the Office for Students, and the knock-on effect of the pandemic on the role of governing bodies. It, therefore, has relevance for governors across the sector, as well as those on the boards of independent institutions. The key points below cover ten core principles in the draft code. A four-week consultation on the new code, developed with law firm Shakespeare Martineau, will close on 23 April. IHE plans to publish guidance for the Code at a later date.
- Providers must establish an appropriate governance framework through which decisions about the organisation’s short, medium and long term needs and objectives are made, with a clear primary decision-making or governing body (the board), and clear division of responsibility between governance and management. The board should delegate appropriate matters to committees or to management. The Scheme of Delegation should be regularly reviewed. Information about the providers' governance should be transparent, published and easily available (p3)
- The board should be an effective, primary decision-making body with collective responsibility for the long-term success of the provider and for determining the organisational objectives, values, culture and strategy necessary to deliver that long-term success. It should ensure that the provider’s culture supports equality, inclusivity, diversity and fair outcomes for all students and have a clear, agreed and effective approach to equality, diversity and inclusion throughout the organisation. The board should appoint and periodically review the performance of a Chief Executive (p3)
- An appropriate framework should be in place for academic governance and the management of academic risk which ensures that academic standards are maintained and quality is enhanced. An academic board should be established to ensure that academic risks - such as those involving validating partners and awarding bodies, the recruitment, retention and attainment of students, or grade inflation - are effectively managed (p4)
- The board should have oversight of key policies and procedures and should have overall responsibility for risk management and internal control. The board should establish a process for identifying and keeping under review the key risks. Appropriate arrangements should be in place to consider complaints about alleged wrongdoing, impropriety and misconduct, including investigation and follow-up action (p4)
- The board should be of an appropriate size and composition and have the requisite skills to discharge its responsibilities under this Code. It should not be so large as to be unwieldy. The provider should carry out due diligence with respect to board members. Expertise gaps should be identified and addressed. The appointment of non-executive or independent members should be considered and, in the case of registered providers in receipt of financial support from the OfS, one independent member must be in place. The board should consider whether it is appropriate to appoint a student representative (p5)
- The board and any committees should discharge their duties in an effective and efficient way. A chair of the board should be appointed. The board should hold regular meetings, following agreed protocols, and receive timely and appropriate information. Where appropriate, a secretary to the board should be appointed, to provide operational and legal advice for compliance (p5)
- Board members should discharge their duties to a high standard of professionalism, act with integrity, and conduct themselves openly and transparently, with appropriate regard to confidentiality. The chair should ensure that all members of the board continually update their skills, knowledge and familiarity with the provider and the environment in which it operates. The board should establish appropriate processes to identify, record, declare and manage actual or potential conflicts of interest (p6)
- Remuneration of board members and senior staff should be appropriate and designed to support the strategy and long-term sustainable success of the provider. Remuneration arrangements for board members and for senior staff should be approved by the board. Policies and procedures should be published. Decisions about remuneration should reflect performance. No-one should be involved in making or influencing decisions about their own remuneration (p6)
- External reporting should be fair and balanced, and minutes of board meetings (and key committees) should be published unless they relate to confidential matters. An annual report of the performance of the provider against its strategy, objectives and values should be published (p7)
- There should be an appropriate level of dialogue between the board and the provider’s shareholders and other stakeholders. The board should identify stakeholders and determine how it will engage in dialogue. Opportunities for two-way communication between the board and students should be established (p7)
Implications for governance
Three years into the new higher education regulatory framework in England, the IHE draft code attempts to provide a flexible governance scaffolding that can be employed by a wide variety of independent providers, whether they be micro-companies or SMEs, charities or multi-national businesses, pathway providers or subject specialists.
Its key principles cover the make-up and main responsibilities of governing bodies and usefully pinpoint the mandatory governance requirements for those providers which are Office for Student registered and in receipt of public funds.
Governors may wish to either respond to the draft code consultation, or reflect on it in light of the Committee of University Chairs (CUC) updated code of governance, the Office for Students public interest governance principles, and the latest CUC/Advance HE report on the independent review of the HE senior staff remuneration code (see our news alert). IHE specifically asks for comments on how its draft code differs from the CUC code, and whether it adequately addresses the OfS public interest principles. Some aspects of these codes - such as the requirement to have oversight of academic governance and the management of academic risk, and delegation of appropriate matters to committees - may also be seen to have taken on greater significance due to changes brought about by the pandemic.
The IHE is particularly interested to hear views on areas of focus for supporting guidance for the Code, which it aims to develop during a later phase of the work and in partnership with sector organisations and providers. Responses and comments should be submitted by 23 April 2021 to firstname.lastname@example.org.
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