The Enterprising University Seminar

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British Council

• The Enterprising University Seminar
• Berlin 8 and 9 October 2004
• Institutional Governance and Committees
• Dr J W Nicholls
• Registrar and Secretary
• University of Birmingham

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The Status and Control ofUK Universities

• Legally independent with charitable status
• Self-governing with lay-dominated governing
  bodies
• Regulated by law and government agencies
• Average of 40 direct funding from government
• Subject to standardised accounting procedures,
  financial agreements with government and standard
  costing arrangements for research

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The Status and Control ofUK Universities

• Increasingly direct relationship with state
• Differences emerging in devolved administrations
  (Scotland and Wales)
• Considerable pressure for reform of governance
  and management structures

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The Nolan Principles

• Selflessness
• Integrity
• Objectivity
• Accountability
• Openness
• Honesty
• Leadership

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Responsibilities of Governing Bodies of
Universities
Institutions of higher education are legally
independent corporate institutions which have a
common purpose of providing teaching and
undertaking research. They also contribute to
economic growth through research and developing
links with industry andthe community. The
council or board of governors is the executive
governing body of the institution and carries
responsibility for ensuring the effective
management of the institution and for planning
its future development. It has ultimate
responsibilityfor all the affairs of the
institution. Guide for Members of
Governing Bodies of Universitiesand Colleges in
England, Wales and NI CUC 2001
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Responsibilities of Governing Bodies of
Universities

• Proper conduct of public business
• Strategic planning and risk management
• Monitoring of performance
• Finance
• Audit
• Estate Management
• Charitable status
• Staffing
• Students Unions
• Health and Safety

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National Committee of Inquiry into Higher
Education 1997 (The Dearing Report)

• Dearing proposed a Code of Practice for Governing
  Bodies
• Unambiguous identity of the governing body
• Clarity of decision-making
• Appropriate membership and size of the governing
  body
• Arrangements for engaging formally with external
  constituencies
• A rolling review of effectiveness of the
  governing bodyand institution
• Reporting annually on institutional performance
• Arrangements to address grievances by students
  and staff
• Effective academic governance

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Governing Bodies Differences betweenPre- and
Post-92 Institutions

• Pre-92 Universities
• Council is executive governing body
• Works in partnership with but superior to Senate
• Lay majority
• Average size 33 members
• Oxford and Cambridge have a unique set of
  arrangements

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Governing Bodies Differences betweenPre- and
Post-92 Institutions

• Post-92 Universities
• Board of Governors established by articles
  dependenton 1988 and 1992 Acts
• Responsible for educational character, use of
  resources,approving annual estimates, staff
  remuneration
• Academic affairs discharged through Academic
  Board
• Membership not fewer than 12 and not more than
  24.Lay majority only two may be teachers ex
  officio andtwo may be students

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Developments since Dearing

• Most pre-92 Councils have been reduced in size
  but still above his recommended maximum of 25
• Effectiveness reviews take place regularly
• Greater attention to role of governing bodies and
  their responsibilities through CUC
• Lambert Review 2003

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Lambert Review

• Lambert Review of Business-University
  Collaboration initiated by Chancellor of
  Exchequer
• Devotes a chapter to Management, Governance and
  Leadership
• Reinforces Dearing recommendations and proposesa
  draft code of governance
• CUC revising its own Guide and taking
  strongaccount of Lambert

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Lambert Review

• Lambert specifically requested to ask
  businessfor its views on
• The present governance, management and
  leadership arrangements of higher education
  institutions and their effectiveness in
  supporting good research and knowledge transfer
  and providing relevant skills for the economy

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Lambert Review

• What did business say to Lambert?
• Universities could be more dynamic in their
  approach to collaboration. The perception is of a
  sector that can beslow-moving, bureaucratic and
  risk-averse

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Help and Hindrance from Government

• Third-stream funding (help)
• Regional Development Agencies (help and
  hindrance)
• Structural and policy shifts to support new
  agenda (help)
• Changes in charity legislation (hindrance)
• Taxation and spin-outs (hindrance)
• It is unclear that strategic management at the
  system level works (ie. state-led intervention
  and conformity)

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How can a governing body supportan enterprise
agenda?

• Good governance is essential to the
  effectiveness of universities.
• The role of the governor has to be clearly
  differentiated from that of the manager.
• Good governance provides the framework in which
  properly delegated authority and executive
  management can flourish.
• Being enterprising requires a balanced approach
  to risk-taking and a willingness to think
  flexibly
• a university must be responsive to the needs of
  the market
• must seize new opportunities which fit with the
  broad direction of an agreed institutional
  strategy.
• Effective governance must liberate senior
  management to operate within this framework.
• The governors should challenge, support and
  advise the managers of the University from
  their diverse backgrounds of knowledge and
  experience in the pursuit of the
  Universitys ambitions.
• Ultimately, the governors must hold the
  managers to account for their actions and take
  seriously their responsibility for the
  long-term health of the University on whose
  governing body they serve.

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Desirable Characteristics of aGoverning Body

• Appropriate size (nothing special about 25)
• Leadership qualities in its chair and senior
  officers
• Understands the boundary between governanceand
  management
• Has a majority of lay members but inclusive of
  academics and other members of the University

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Desirable Characteristics of aGoverning Body

• Members are appointed on merit and personal
  attributes
• Are sympathetic to the ethos and objectives of
  universities
• Represent a matrix of skills and experience most
  valuable to the Universitys mission and strategy
• Other important factors
• Regional/(inter)national balance
• Equal opportunities balance(gender, age,
  ethnicity, disability, etc.)

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Managing Conflicts of Interest

• Declaration and register of members interests
• Role of Secretary to the governing body
• Use of wholly-owned commercial subsidiaries
• Managing shares and interests in spin-off
  companiesor other vehicles
• Resolving potential conflicts of duty for those
  managing commercial activities

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Challenges for Governance and Managementin the
Enterprising University

• A strong and effective governing body
• Clearly defined roles in the executive
• Adaptable management structure
• Adaptable reward systems
• Managing diversity
• Managing conflicts of interest
• Short internal lines of communication
• Focus on client requirements
• Clarity and simplicity of interface with external
  clients

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Effective Management

• Defining the role, scope and function of the
  executive
• Flatter, integrated structures
• Incorporation of new skills and attitudes
  alongside traditional university administration
• Transforming traditional functions and
  investingin new ones (eg. marketing,
  communications,business development)
• Management as agent of cultural change
  andpartner in the academic enterprise

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Burton Clarks Analyses

• Creating Entrepreneurial Universities (1998)
• Sustaining Change in Universities (2004)
• Pathways of transformation
• The strengthened steering core
• The expanded development periphery
• The diversified funding base
• The stimulated academic heartland
• The integrated entrepreneurial culture

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