Assessing the Effectiveness of your Governing Body Jim Benson Secretary to Council Brunel University

Effectiveness of the governing body is key to the institution delivering its strategy The governing body and strategy – its role and the division of responsibilities Selection [qualification], Training and Development Conducting an effectiveness review - the Brunel experience

Features of an ‘Effective’ Governing Body Appropriate Balance of skills and experience Rigorous procedure for appointment Sufficient time to discharge responsibilities Induction and opportunity to update skills Having timely information and making timely decisions Process for formal evaluation of Governing Body Process for formal evaluation of Governors

Allan Schofield-Effectiveness Framework Leadership Foundation Defining the effectiveness of governing bodies Reviewing Governing Body Effectiveness. Higgs 2 – The FRC Guidance on Board Effectiveness [March 2011]

The Effective Governing Body and Strategy Where do responsibilities lie?

Strategy Who is responsible for: -Developing strategy? -Approving strategy? -Delivering strategy?

CUC Guide The Governing body has a duty to enable the institution to achieve and develop its mission... This responsibility includes considering and approving the institution’s strategic plan CUC Guide for Members of Higher Education Governing Bodies in the UK

HEFCE It is the responsibility of governing bodies to set the strategic and financial direction of their HEI and to hold it to account in a demonstrable and open way that promotes public confidence in their HEI. Principles supporting the relationship between institutional governing bodies and HEFCE-March 2011

What other Governance Codes state… ‘NEDs should constructively challenge and help to develop proposals on strategy’ Higgs Report 2003 ‘Role and Effectiveness of NEDs ‘The Board should set the company’s strategic aims’ The UK Corporate Governance Code ‘The Board should fulfil certain key functions including reviewing and guiding corporate strategy’ The OECD Principles of Corporate Governance

Collective Responsibility - Corporate Decision Making Dilemma 1 What matters should be reserved for the Governing Body?

The VC/Principal and the Chair of the Governing Body Aim to create collegial governing body where all governors debate and decide as equals: VC leads the executive Chair leads the governing body

Do responsibilities divide as neatly... -Developing strategyExecutive/Management -Approving strategyGoverning Body -Delivering strategy Executive/Management

LEADERSHIP DYNAMIC VC/Principal EXECUTIVE CHAIR OF GOVERNORS GOVERNING BODY

Dilemma 2 Can all governors make an equally valid input in approving strategy?

Legal Position Depends what is stated in the Articles of Association, Charter, Statutes and Ordinances Brunel Position ‘To approve the mission and strategic vision of Brunel University’

Selection, Training and Development ‘Only damage to society and economy could result from the attempt to professionalise… limiting it to people with special qualifications’ Peter Drucker ‘There are strong forces pushing towards professionalisation… rapid growth of voluntary director training… the issue of accreditation and skills is just becoming visible’ Bob Garratt

What qualifications is a member of a governing body required to have? Dilemma 3 Does a governing body need to be professional [and have a professional outlook on the appointment and development of its members] to be effective?

Conducting an effectiveness review The Brunel experience... -Annual Processes -Fundamental Review

Assessing the effectiveness of a governing body Annual Processes [Role of Nominations Committee] Assess the balance of skills, knowledge and experience of governors against Skills Matrix Assess training and development needs Review performance [attendance/contribution] Consider outcomes from appraisals Review of committee practices

Assessing the effectiveness of a governing body Fundamental Review Functions of governing body Effectiveness of committee structure Effectiveness of decision making and strategic thinking Roles and appointments Respond to stakeholder requirements

The Brunel experience-why? It had not been undertaken for 5 years New internal auditors provided opportunity Stuffed Donkeys

Governor hammers 'megalomaniac' v-c 3 September 2009 Brunel council's 'stuffed donkeys' embroiled in latest governance row

Conducting an effectiveness review - the Brunel experience 1.Extend role of internal auditors to non audit work – July Ascertain views of Council members [using external advisor] 3.Initial review of size and effectiveness 4.Consult interested parties [Council Away Day] – September Self reflection 6.Report by current member of Council – March Establish Task Group – April Draw conclusion – for external review or internal audit

3. Initial review size and effectiveness How many people should be on Council? How should Council organise its activities? [how often, at what time, agenda, professional development ] How can Council develop its processes to be more effective in an increasingly challenging HE environment? How can we build on the strengths of Council/rectify its weaknesses? How should Council further develop its working relationship with the executive?

7. Establish Task Group – April 2011 Terms of Reference To review the functions currently undertaken by Council, and that of its committees, with a view to defining its collective responsibilities and duties To consider the membership of Council and that of its Council Committees and the joint committees of the Council and the Senate To review the processes, both on going and milestone, by which Council assesses its effectiveness To recommend to Council any amendment that might be required to the University’s Charter, Statutes and Ordinances

Are effectiveness reviews worth it? All governance codes are voluntary Companies Act 2006 Charities Act 2006 View of the EU

That’s it……..

Dilemma 1-What matters should be reserved for the Governing Body? Approval of strategy Approval of budgets Oversight of operations Compliance [legal & Regulatory] Performance review-governing body and the exec Changes in structure

Dilemma 1-What matters should be reserved for the Governing Body? Approval of Annual Report and Accounts Approval of formal communication with stakeholders [HEFCE Financial Memorandum] Approval of major contracts and investments Approval of certain policies [H&S, employment] What might be delegated?

Dilemma 2 - Can all governors make an equally valid input in approving strategy? Role of staff governors Role of student governors Role of Vice-Chancellor/Principal Role of Chair Role of Lay/Independent members

Yes - Have equal legal responsibility - Provide balance - Have expert knowledge of HE and institution [staff] No - Question ability to form objective view - Inclination of staff to support/oppose Vice- Chancellor - Staff cannot properly be divorced from managerial or operational role - Overbearing influence of powerful individual

Dilemma 3 Does a governing body need to be professional [and have a professional outlook on the appointment and development of its members] to be effective?

Garratt - Yes HEIs are multi-million £ businesses requiring professional governance Professional board smaller, efficient and responsive HEIs deserve investment in selection and training Drucker - No Needs to be a realistic expectation of commitment HEIs are complex requiring broad range of skills to govern Professionalisation = cost Are there sufficient people with skills to go round?