Governing Higher Education Today

International Perspectives

Tony Strike, Jonathan Nicholls, Rushforth John, Tony Strike, Jonathan Nicholls, Rushforth John

• Publisher: Routledge
• Year: 2019
• eBook ISBN: 9780429771576
• Edition: 1
• Topic: Education
• Subtopic: Education General

International growth in higher education, the introduction of new providers and increased public and state interest in university structures, levels of fees and funding models have made governance in higher education a vital and sometimes controversial topic.

Governing Higher Education Today provides challenging perspectives on the longer-term dynamics and policy trends in a world market for higher education. Through international perspectives and case studies, it considers:

• The emerging national responses, which are likely to shape institutional governance in the next decade.
• An analysis of the trends and strategic directions in governance and policy in higher education.
• Insights from practising thought leaders on the future of higher education governance and policy.
• Traditions and values within higher education governance.
• Lessons and trends in the interaction of institutions and government.

Whether you sit on a governing body, work in a university leadership role or in a governance or policy team, teach or study higher education, Governing Higher Education Today provides a thoughtful yet practical guide to the future of university governance with international applicability.

Part I

Different voices

Chapter 1

The role and perspective of a UK Chair of the governing body

Chris Sayers

‘A bend in the road is not the end of the road . . . unless you fail to make the turn’. This well-known quote is widely attributed to Helen Keller,¹ someone who knew and overcame challenges that most of us would find hard to imagine. Despite being left both blind and deaf at the age of 19 months after contracting scarlet fever, she became the first deaf-blind person to earn a Bachelor of Arts degree. This was an even more remarkable achievement as she graduated in 1904 when women in general were not even admitted to university. She then went on to become a highly regarded author, political activist and lecturer, and campaigned for women’s suffrage, labour rights, socialism, antimilitarism and other causes. Hardly a straightforward journey through life, but she navigated her way through some daunting challenges to achieve much more than many people of her day would have thought possible.

The difference between a bend in the road being the end of the journey or it being merely a change of direction lies in the ability to do a number of seemingly simple things. First, we have to see that the bend is coming up; second, we need to decide where and when we are going to turn and, last, we have to make sure that we do it. This is as true in business as it is anywhere, where the difference between those organisations that are successful and sustainable is their ability to navigate and successfully adapt to change. In the world of higher education (HE), our road is becoming increasingly twisty, and this chapter reflects on what governing bodies need to do to ensure that their institutions spot the bends and make the appropriate turns.

Universities occupy a vital position in the UK and, as in the fabric of any developed economy; they contribute to society in many ways. At the economic level, they play a significant role locally, nationally and globally. Universities are huge employers, with 3 per cent of all jobs in the UK linked to the HE sector, and in 2017/18 they put nearly £100bn into the UK economy. Perhaps even more importantly, the generation of new ideas is the oxygen of innovation and progress, and universities are an essential contributor to the ongoing development of civilised society. Nothing has more impact on the culture and progress of any society than education and, as university governors, we are entrusted with the governance of the highest of all educations.

Of course, universities do not run themselves. Running a university is a team sport and the players are the members of the university staff, led by the Vice-Chancellor (VC) and the executive team. The governing body, however, often occupies the role of team coach; agreeing the game plan, encouraging and motivating, observing from the side-lines and looking for ways to improve performance. And, like a team coach, when things are going well, governance is almost invisible but, as soon as anything does go wrong, the first question generally asked is, ‘What were the governors doing?’. This neatly shines a light on the joint purpose of governance: it must ensure the conditions that will support others to get on with their jobs and succeed, whilst at the same time looking out for potential problems that could trip us up, which could come from any quarter and, increasingly, from unexpected directions.

In UK universities, governance has an added complexity because we are always striving to find the appropriate balance between the differing agendas driving our institutions. We must react to the influence of market forces whilst being constrained to some extent by state control and all the while operating according to our charitable objects and remaining true to our individual institution’s mission. The impact of these different factors can vary to a substantial degree in different parts of the UK and across different parts of the sector, and they can change over time.

Good governance as well as good management underpins the success of any institution, but it is not a given, and organisations can fail because of problems at the governance level. Ineffective governance compromises the ability of the management to succeed, whilst effective governance is an important component of the overall leadership, strategy setting and assurance that all institutions need.

The key role of the governing body is to ensure the sustainability and long-term reputation of the institution – and it does that by making significant and strategic decisions, establishing policies, and overseeing the institution’s activity. In practice, this means overseeing management, the finances, the academic quality and organisational culture, setting the strategic direction, building community relationships, establishing ethical standards, values and culture, and appointing the head of the institution and monitoring his or her progress.

Out of all of these, I believe that the two most important tasks that governing bodies have to perform are: (1) to select and develop the right leadership; and (2) to establish the direction and culture (in terms of values and acceptable behaviours) of their organisation. While these fundamental priorities remain constant, any governing body must also be ready to respond to new and different pressures, in order to remain up to date and effective.

Up until relatively recently, governance was mainly concerned with the integrity of the day-to-day running and reputation of an institution, which reflected a time when there was less financial uncertainty due to an assured number of undergraduate students and a relatively stable undergraduate and government grant income.

However, there was a quiet earthquake in the world of UK academia in 2011/12, when the government announced that not only would the full fee for undergraduate teaching become attached to the student, but that the control of the number of students going to individual institutions would also be removed, thereby allowing universities to attract as many students as they could or wanted.

This fundamentally altered the nature of the HE sector because, at a stroke, the undergraduate HE system went from being a primarily state-managed system, with limited competition based around the desire to attract the best qualified students, to being a competitive, open market.

Since then, several additional factors have intensified this competitive pressure:

– the decision to leave the European Union in 2016;

– the demographic decline in the number of 18-year-olds leaving school each year;

– fee levels not being increased by inflation, and the potential for a further funding review;

– a government policy of making it more difficult for many institutions to recruit international students coming to the UK; and

– the Higher Education and Research Act (2017) (HERA17) that has opened up even wider competition through alternative providers and an increasing range of options for 18-year-olds that include not going to university.

The net result is that there are fewer 18-year-olds in the system and that they have more options. In order to protect their income, universities now need to fight for market share and have had learn to compete more for students. To do this, they have had to become more business-like, more accountable and they are now expected to deliver much more than ever before.

As a result, many governing bodies today are facing a raft of new challenges, which require a different response, necessitating a different focus and a different working relationship with their executive teams. My observation over the last six years is that decisions taken today are often more far-reaching than they were in the past, chiefly because of the climate of greater financial uncertainty that we are currently operating in. There is a real need to make sure that our governance is, and remains, up to the task in hand.

In truth, the governance practices in some universities have not significantly changed for decades and, given the level of change the sector has been through and continues to face, it would be surprising if they are all now still fit for purpose. I believe that if a governing body is to keep abreast of the new changes facing the sector and hopes to manage them effectively, then there has to be some change both in the focus for governing bodies and in how they operate.

It is clear that many universities are changing quite dramatically, and the role of governance in those institutions is going to have to keep pace with those changes. As a discussion in the Guardian (Swain, 2016) higher education network in May 2016 explained:

When universities were first created in medieval times, they were mainly communities of ecclesiastical scholars. Now, they are multi-million-pound businesses with complex leadership teams, human resources departments, mission statements, international strategies, communications executives and directors of enterprise.

Like it or not, universities will need to operate in an increasingly commercially focused way; with many becoming more global in their operation and overall, carrying greater risks, and with less protection from the state.

The risks are high – HERA17 makes provision for the possibility of a university failing, and the new regulator, the Office for Students (OfS), has confirmed that its role is not to protect institutions but to protect the interests of the students (Adams, 2018). Since the Act was passed, there have been various stories in the media (Perkins, 2018; Vaughan, 2018) speculating that some universities are on the verge of bankruptcy.

An open, efficient competitive market can be a very good thing – it makes providers think about what people really want and need and can drive improvements in quality and value – but the flip side of any market economy is that a provider who can’t compete will not get the custom, and therefore neither will they get the income. Although it would be a mistake to start thinking of students as consumers or customers, the general principle is still true, and students are increasingly choosing to attend universities based on perceived quality, reputation and value for money and what it will do for their employment prospects. Universities now have to do more to convince potential students of the benefits that they offer.

We are already seeing market dynamics playing out in our sector, with some universities growing while others shrink. Some universities have realised the opportunity that competition brings to expand and grow, whilst others are now grappling with the unprecedented level of financial uncertainty and top line revenue volatility. As risks have increased (both of failure and missed opportunity) and government has been articulating ever more requirements on governing bodies, governors’ requirements of their institutions have also changed. They are wanting more engagement, are becoming more challenging and are looking for more assurance.

Some governing bodies are now using a whole new lexicon in the boardroom. Discussions have shifted from relatively straightforward reports on the state of finances, student applications, research success and property to also talking about student satisfaction, corporate plans, marketing plans, financial dashboards, scenario planning, cash flow management, competitive strategy, customer segmentation and buying decisions, the differentiation of educational offering, culture and the student experience and how all of this impacts the academic portfolio. Some universities were very quick to adapt, others not, but from the evidence of discussions with other Chairs at Committee for University Chairs (CUC) Plenaries, it seems that most are now thinking like this.

We are also seeing a very different approach to marketing with almost every university seemingly claiming to be top ten or number one at something or other, accompanied by an expansion in digital marketing activities and the recognition at some institutions that professional marketing is now a fundamental part of a university’s business. The National Audit Office (NAO) report on ‘The Higher Education Market’ says that:

Most providers we (NAO) spoke to were focusing increasingly on marketing and advertising since student number caps were removed. For example, one provider had tripled the size of its marketing team, while another was planning a £400,000 summer advertising campaign in the run-up to A-level results. Our interviewees were aware of some providers offering gifts such as football season tickets or iPads to entice students, though none did so themselves. Similarly, providers are increasingly willing to make unconditional offers, particularly to high-achieving students, to discourage them from looking elsewhere.

(NAO, 2017, p.30)

Meanwhile, the marketplace for key skills, recognised as being critical for an institution’s success, has resulted in some universities now paying their top people salaries that are attracting attention, and governing bodies need to consider carefully their remuneration strategies.

The net result is that we who are responsible for these complex institutions, at a time of such disruptive change, must make sure that our governing bodies are equipped to able to make strategic decisions and to find the right balance between competitive confidentiality and the increasing requirement for public accountability and transparency. Governing bodies will need to be better informed, benefit from a greater skills mix, have a stronger partnership relationship with the Executive and be even more actively involved in setting the leadership tone.

To achieve this, all governing bodies must have the right expertise around the table to deal with the critical issues of the time. Of course, as the CUC (2017) Illustrative Practice Note 7 states, it is:

important that post-holders can question intelligently, debate constructively, challenge rigorously, decide dispassionately, appreciate the difference between governance and management and be sensitive to the views of others, both inside and outside governing body meetings.

(CUC, 2017, p.3)

But they also need to bring a sufficient breadth of personal experience and understanding to the debate. Today’s governing bodies clearly need governors with commercial and business backgrounds, but we also need IT, digital, marketing and fundraising skills, to name but a few, to supplement the traditional mix.

In addition, there must be sufficient quality boardroom time to talk about the key subject areas, such as the well-being and experience of students, staff, money (costs and income), competition, an institution’s competitive offering and its reputation management. There can be a challenge in how to use board time well so that we do not have interminable meetings where concentration flags, but still manage to allow time for in depth consideration of important issues and for determining the direction of travel for the institution. At Northumbria University, we have addressed this by reversing the agenda – all the strategic discussion items are tabled first while all routine, update and constitutional items are handled at the end of the meeting. This ensures that we discuss the most important matters first and make our strategic decisions when we have both time and maximum energy in the room.

Thus far, I have been discussing how the sector has been responding to the known changes and challenges it faces, but governing bodies also have a responsibility to ensure the long-term sustainability of their institution. Change is a constant process and we need to continually adapt our governance models to meet not just today’s challenges and op...

Table of contents

• Cover Page
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Notes on Editors
• List of Contributors
• Acknowledgements
• Abbreviations
• Introduction: Located Voices
• Part I Different Voices
• Part II Global Perspectives
• Part III The English Experiment
• Part IV Elements of Governance
• Index