Independent Higher Education (IHE) Code of Governance for Independent Providers of Higher Education

IHE, an organisation for independent and alternative providers, has worked with its membership and the sector to develop what it says is a more flexible Code of Governance. It is designed to support institutions to be effective and accountable. The Code, which outlines ten principles, has been produced with support from law firm Shakespeare Martineau. Governance arrangements of independent providers are often different from those adopted by traditional universities and colleges; hence the Code is tailored to the diverse contexts in which these providers operate. However, the Code may also be of interest to governors of other types of institutions, for the purposes of comparison and considering some of the common issues.

At-a-glance:

• Every provider must establish a clear governance framework through which decisions and objectives are made, with a primary decision-making or governing body (the board) and clear division of responsibility between governance and management (p7)
• The board should have 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 (p8)
• There should be an appropriate framework in place for academic governance and the management of academic risk which ensures that academic standards are maintained and quality is enhanced (p10)
• The board should have oversight of key policies and procedures, and should have overall responsibility for risk management and internal control (p11)
• The board should be of an appropriate size and composition and have the requisite skills to discharge its responsibilities under the Code (p12)
• The board and any committees should discharge their duties in an effective and efficient way (p13)
• 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 (p15)
• Remuneration of board members and senior staff at the provider should be appropriate and designed to support the strategy and long-term sustainable success of the provider. No one should be involved in making or influencing decisions about their own remuneration (p16)
• External reporting should be fair and balanced, and minutes of board meetings (and key committees) should be published unless they relate to confidential matters (p17)
• There should be an appropriate level of dialogue between the board and the provider’s shareholders and other stakeholders, and appropriate engagement with students (p18)

Implications for governance

The IHE Code provides flexible governance “scaffolding” which can be employed by independent providers and is a useful resource for governors across higher education generally.

Its ten key principles – clarity, collective responsibility, academic governance, risk management,  size and skill, effectiveness, integrity, numeration, fair reporting and external and student engagement - cover the make-up and main responsibilities of governing bodies and the mandatory requirements for those providers which are Office for Student registered and receive public funds.

The code commentary sets out recommended practices, processes and mechanisms that governing bodies can use to underpin the key principles with the aim being for providers to establish models of effective governance that work for their own circumstances.

Helpfully, it draws in some of the more high-profile concerns that have emerged in recent times, including a section on remuneration. In the pages on academic governance, the Code highlights the duty, about to become enshrined in law, on the board to “understand, respect and uphold” the principle of academic freedom. This it defines as the ability within the law for academic staff to question and test received wisdom, and to put forward new ideas and controversial or unpopular opinions, without placing themselves in jeopardy of losing their jobs or privileges.  

Given the increasing importance of the student voice in higher education, the Code also pinpoints the importance of having appropriate feedback mechanisms to allow boards to have oversight of the issues and themes that of particular concern to the student body and which could be and are the subject of student complaints.

The code’s “apply or explain” basis means providers are encouraged to meet the principles or explain why they have not applied them and what they have done instead. For some independent providers which may have different ownership, accountability and regulatory requirements, some governance matters may be reserved for shareholders, parent companies, family trusts and/or other related organisations. Where this is the case, the Code recommends that this is explicitly stated and that the governance framework should recognise that the board is the primary decision-making body of the provider and any constraints on its ability to do so should be kept to the minimum necessary.

Throughout the document, references are made to the importance of transparency and to regular reviews of governance arrangements to ensure they are fit for purpose – a recommendation that, in the ever-changing higher education landscape, will be relevant across the sector.