Supporting the development of unified and strategic Boards capable of delivering transformation

These nine lessons are intended to support the development of unified and strategic Boards capable of delivering transformation; in times of challenge, both to policy and funding, the unity of governing bodies is more likely to come under pressure. Governing bodies must be equipped to work with purpose, integrity and in partnership with executive teams and the stakeholders - students and the many other business, industry and government partners - that they seek to serve in this challenging policy, regulatory and funding landscape.

They are grouped in two categories set against a policy backdrop informed by recent and emerging tertiary education legislation in the form of the Tertiary Education and Research (Wales) Act (2022), the current Tertiary Education and Training (Funding and Governance) (Scotland) Bill; and the Post-16 Education and Skills White Paper published by the UK Government in October 2025 and applying to England, albeit with some potential implications for Scotland. 

The first set of lessons points to the evidence base of empirical data and insight that must inform the effective scrutiny and constructive challenge at the heart of good governance. The second set addresses the culture and strategy that is delivered by good governance and which, in a dialectical relationship, also enables good governance. 

Lesson One of nine is provided by Codes of Governance: the Higher Education Code of Governance published by the Committee of University Chairs (CUC) in 2020 and covering universities in England, Wales and Northern Ireland and the Scottish Code of Good Higher Education Governance published by the Committee of Scottish Chairs (CSC) in 2023. I’ve reflected both on how little mention was made of the Code in my own engagement with governing bodies as a Vice-Chancellor and how helpful both Codes are in guiding executive and non-executive leadership. The crisis at the University of Dundee, for example, may readily have been avoided had both the executive leadership and the governing body (the Court) followed the guidance specified in the Scottish Code; which is a well written ‘manual’ both for leading a university and for maintaining a constructive relationship with the funding body. All members of governing bodies and executive leadership teams should familiarise themselves with their respective codes and take note of the revised CUC code when published later this year following the work of the current CUC Steering Group led by Iain Cornish, Chair of Leeds Beckett University, and of which I, as Chair of SFC, have been a member. 

The challenges of good governance are not unique to the UK and further lessons can be learned from the final report on the Quality of Governance at Australian Higher Education Providers, published in December 2025 by the Parliament of Australia following a year-long Senate-led inquiry. The report reflects global challenges and addresses many of the governance and leadership concerns voiced last year regarding UK universities. It makes 12 recommendations underpinned by eight guiding principles with the focus on re-establishing the core mission of universities as providers of research and education for the public good and with restored levels of trust and confidence from staff, students and the wider public. 

Lesson Two similarly recommends that governing body members pay due attention to the need for external Governance Effectiveness Reviews and that such reviews should be regular and rigorous and followed by an action plan implemented, monitored and evaluated by the governing body. On taking up role on the SFC Board I was surprised to find that some universities had not completed external reviews within the required five-year interval, others had not published the review on their website or completed an action plan, and that none were required to provide SFC with a copy of the review. In September 2025 SFC’s Expectations of Good Governance was published following a review of the process and outcomes relating to governance effectiveness reviews in Scottish Universities. Findings recommended, inter alia, more regularity, robustness and openness in governance effectiveness reviews with a need to focus on assurance as much as development to enable the governing body to assure itself that it is meeting the requirements of the funding body. Our guidance is also now more explicit that institutions must provide SFC with a copy of their final report.

The Scrutiny of Financial Sustainability together with financial modelling, stress testing and reporting forms Lesson Three. There is a perfect storm of factors which affect a Board’s increasingly important role in oversight of financial sustainability.   

The growing financial pressures across the sector, combined all too starkly with financial mismanagement in the case of the University of Dundee, demonstrates the need for governing bodies to become even more financially literate in their financial scrutiny and strategic planning. Such scrutiny requires significant skills and experience; there is a danger that the non-remunerated Board positions of university governing bodies become places where less experienced external (ley) members continue to ‘cut their teeth’ as they develop their non-exec careers and staff and student members become ‘representatives’ of internal communities under pressure. The large size of university governing bodies represents a challenge for unified Boards and can mean that members who leave the heavy lifting to others go unnoticed and unchallenged until there is a crisis. 

In September SFC published the report Financial Sustainability of Universities in Scotland 2022/23 - 2026/27 which lays bare the real terms reduction in public funding over recent years. The situation across the rest of the UK is not dissimilar and the resulting impact similar too with around 45% of universities in England and Wales forecasting operating deficits in 2025/26, compared to 55% in Scotland. 

However, one of the major lessons from the Dundee crisis is that we cannot look at finance in isolation from the wider policy and funding landscape or the global and national economic environment. Indeed, the criticism that Australian governing bodies have become overly corporatized and which led to the Senate review mentioned above is, in part, the inevitable outcome of an under-funded sector where leadership at both executive and governance levels has been forced to take more financial risks to generate income from new markets, primarily international students on campus or expanding ‘in country’ transnational education (TNE) provision. 

Finally, for financial scrutiny to be effective, governing bodies must challenge assumptions, ambitions and positivity bias among executive teams against their strategy, mission and purpose; the commercialisation and competition within the sector, exacerbated by flat-cash settlements, has encouraged a false confidence and expansionism, in part because it has been necessary to grow just to stand still given rising inflation, capital and revenue costs.

Allied to the need for better financial modelling, scrutiny and stress testing in a volatile policy and funding landscape is Lesson Four: the need for more sophisticated Risk Management Scrutiny of data, analysis, and accountability. This is one area where the best performing universities have forged ahead with scrutiny clearly aligned to well-developed strategic objectives and a thoroughly worked up risk appetite. Where improvements can still be made is in the analysis of sub-sets of risk, triangulation across risks, and scenario planning for risk mitigation in the event of market volatility or changes to the policy, regulatory or funding landscape. For example, the concentration of risk within one subject specialisation, at one level of education, in one international market, in one university represents a concentration of risk that no Board should tolerate. 

Lesson Five calls for greater Interrogation of Benchmarking Data. University Boards and Courts have a tendency to ask for no more than a dozen metrics by which to manage performance. This might work in businesses or industries producing a small range of products or services but works less well in large and complex universities unless accompanied by a sophisticated set of sub-measures that are scrutinised at least at Committee level. Each top-level metric has a plethora of sub-metrics (I had 151 in the strategy that underpinned the transformation that saw Cardiff Metropolitan University awarded Times Higher Education ‘University of the Year’ in 2021). There I also made extensive use of performance data produced by the then Higher Education Funding Council for Wales in the form of simple bar charts for what seemed like an endless set of criteria that demonstrated the performance of each university relative to the other 150 plus across the UK. These were extremely useful in alerting both the executive and the Board of Governors to metrics where the University was performing well, less well or was an unintended outlier relative to its benchmark group and where corrective action might be required. Selecting a benchmark group of six to 10 universities that could provide both insight and challenge is also something that governing bodies should consider in efforts to increase meaningful scrutiny and raise performance levels.

Moving from numbers and measurable performance to the culture and strategy that creates the environment in which students, staff and wider stakeholders can thrive and succeed heralds in four further lessons for good governance. 

Lesson Six is the importance of a Culture of Partnerships; it’s the combination of people, places and partnerships that enables universities to create the culture that establishes the all-important sense of belonging and performance that, in turn, helps them and others to thrive and succeed. Universities are not random gatherings of people but communities and partnerships that share a mission and purpose within and between institutions and with wide-ranging stakeholders. The need to maintain and nurture universities as communities themselves and as vital contributors to wider communities and economies was evident in the discourse surrounding the University of Dundee last year and, particularly, in the discussions of the definition of ‘meaningful engagement’ between executive leadership, staff and trade unions. 

Lesson Seven focuses on what might have been the buzz word of 2025 and is likely to remain at a the top of our HE lexicon for 2026: Transformation. Much of what we saw last year falsely equated transformation with efficiency only; genuine transformation isn’t simply about cutting costs but is a major innovation that requires coherent policy direction, strategic leadership, and investment of finance, time and talent in order to achieve better outcomes. While some of these outcomes might increase efficiency the real prize will be in achieving greater effectiveness and impact by transforming the sector to be more agile and responsive to student demand, employer need, skills shortages and economic opportunities in an effort to realise both the economic and social value of public investment in education and research. 

Lesson Eight is the need for Engagement with Funders or Regulators. This again emphasises a culture of relationship building, partnership working and ‘no surprises’ by building relationships between the university and the funder or regulator and with both parties being well-briefed on ‘notifiable incidents’ or ‘reportable events’. There were a number of surprising moments in 2025 but perhaps the biggest for me was the Scottish Parliament’s Education, Children and Young People Committee session where it became all too apparent that none of the key executive or governance figures at the University of Dundee appreciated that breaching a bank covenant and being unable to pay debts that put the university at risk of insolvency was something that the Scottish Funding Council should be formally notified of and which constituted a crisis. 

My time as a Vice-Chancellor in England had drawn to a close by the time HEFCE was replaced by the Office for Students and I retired from my position as Vice-Chancellor in Wales just as Medr replaced HEFCW but I always found the support and advice I received from both HEFCE and HEFCW to be invaluable and I’ve watched with admiration the way in which SFC colleagues engage with universities and colleges in Scotland when they reach out for advice and support, including financial support. For the first time all three funding/regulatory bodies (OfS, Medr, and SFC) are chaired by recently retired long-serving University Vice-Chancellors and we therefore have increased opportunities to build knowledge and understanding across universities and regulators and between the bodies that represent university leaders and Chairs.

Finally, a list of lessons learned from 2025 would be incomplete without a distinct and perhaps summative Lesson Nine which references the Learning from the University of Dundee and the ways in which this one university has undoubtedly shaped our collective learning in relation to all of the lessons outlined above:

• The gap between the governing body, the Court, and executive meant good governance was impossible: governing bodies and executives need to have open and honest dialogue outwith as well as inside formal governing body meetings;
• The lack of scrutiny of the five evidence bases highlighted above meant there could not be good governance: governing body members need to know their numbers;
• The lack of a coherent and realistic strategy supported by a strong culture contributed to institutional failure: it is the responsibility of the governing body to ensure adequate stress testing of all strategies and financial plans has been undertaken;
• The starting point for recovery was flawed with a myopic focus on cutting costs to secure financial sustainability rather than seeing financial sustainability within a more comprehensive picture of mutually informing and aligned relationships between governance, leadership, strategy, culture and financial sustainability.

Governing body members might serve one, two or three terms of anything up to nine years in total but many of the institutions they serve have been in existence for hundreds of years. Governors or Court members, just like the executive members, are merely custodians of the university’s future; the decisions they make during their terms must be fit for long term futures. These nine lessons in university governance reflect the challenges of the role that governing body members have and are likely to continue to have as the sector embraces reform and transformation in an era of continuing fiscal constraint.

Professor Aitchison is Chair, the Scottish Funding Council (SFC) and served as President and Vice-Chancellor of Cardiff Metropolitan University (2016-24). She was previously Vice-Chancellor and CEO of Plymouth Marjon University (2013-16) and Head of Moray House School of Education at The University of Edinburgh (2010-13).