"The Governor View" - The Big Conversation: Effective decision-making

At a time when universities and colleges are facing serious financial challenges, governing boards’ capacity to make effective and flexible decisions has never been more important.

The governor system has underpinned the development of world-class HE: but continuing financial pressures, increasing complexity, the threat of global disruption, and societal change, raise questions about whether current arrangements will be fit for purpose in the future, according to John Rushforth, Senior Governance Associate at Advance HE.

In a new blog published by Advance HE as part of its Big Conversation series on governance, he pinpoints three potential risk areas – structure, culture and skills - where good decision-making is critical.

On the first of these, governors who spoke to Advance HE points to the committee system as a strength, but with caveats. 

Committees are a way of utilising specialised expertise to free up the work of the board, according to the chair of governors at a new university in the north of England. 

At her institution, a scheme of delegation, which gives committees some level of decision-making, helps to avoid the risk of the bodies becoming simply “talking shops”, she said.

“We give our committee certain jobs that they have to do precisely so they don’t become talking shops. Two of our committees - audit and finance, and strategy and implementation - do a lot of our heavy lifting.”

While the committee system means members’ skills are put to good use, there is a “real danger” that it can generate two-tiers of governors, according to an independent board member at a new university in the South of England.

“There are committee chairs and the rest of the governors,” he said. “Committee chairs are giving quite a bit of time and it is these members who run through the agenda with the chair and have to be across every subject. Whereas people who are not chairs don’t get so much of that. It can feel like these people get informed in retrospect and they might have concerns about not being used or being kept up to date.”

To guard against this, he says that committee chairs have a responsibility to encompass and highlight the views of committee members in discussions at full board, “even if they don’t’ agree with these views”.

For governors at smaller, specialist institutions, a smaller governing body negates these kinds of concerns, but raises others.

“We have 12 trustees, which is relatively small for a governing body,” said a governor at an institution in London. “As a result, all members are very involved in everything. And that can mean heavy workloads.”

John Rushforth’s blog invites governing bodies to consider the extent to which their decision making is evidence-based and uses “robust data analysis”.

But one governor questions the extent to which, realistically, governors can be, or need to be, data experts.

“I don’t think the role of the governor is to be able to look at loads of numbers and draw their own conclusions,” he said. “Personally, I quite enjoy that kind of thing but I don’t think it is something that should be expected generally. It is completely unrealistic, for instance, to expect that people are going to be good at regression analysis and things like that.”

For him, the onus lies with the executive to present the data in a way that draws out the conclusions, while providing enough data to allow a high level of governing body oversight.

“Generally, the issues for governors are whether there is enough data, is it over a period of time, and have the executive shown that it is representative of whatever the issue is,” he said. “That is the level at which data is do-able, but you don’t have to call in a data scientist. Responsibility about what you can draw from the mountains of data does, by and large, lie with the executive.”

At one university in the North of England, governing body members include an NHS chief executive and a former vice chancellor who are “very data led”.

“We have got a group of people who understand data and its limitations,” said the chair. “But often you have to go beyond the data. It is never enough in itself, but it points to where you might need to ask questions.”

One area highlighted in the blog that governors agree is a potential structural weakness is what happens in the aftermath of things going wrong.

At some institutions, there are no clear processes for examinations to be carried out and lessons to be learnt if a plan fails, governors say. There also seems to be little appetite for establishing where accountability lies.

“Happily, I haven’t been though anything disastrous,” said one governing body member. “But generally speaking, learning loops, holding people to account and making changes to ensure it doesn’t happen again - that is something that the board doesn’t really get involved with directly enough in my view.”

One governor recalls an estates expansion where costs overran substantially.

“The relevant person on the leadership team patently did not have control over what was going on,” he said. “They gave a series of increasingly despairing apologies without actually doing anything. It appears that this person did not have much of a background in large investments.”

No specific action was taken by the board. Instead, the executive member was “hurried into retirement by the VC”. 

“I suspect this is the typical way in which things are handled at many institutions, rather than a system of formal feedback and process that leads to revising the relevant policies,” said the governor. “I don’t think, in most cases, it is done very well.”

At one northern university a “lessons learned” system was put in place after a campus project ran into trouble. But the chair has concerns that as plans only infrequently go awry, the review system that is sparked when they do may not be sufficiently embedded. 

She also has concerns about whether governors are skilled enough in assessing risk and understanding accountability.

“For instance, whether financial challenges are being met I would regard as a board responsibility,” she said. “You are supporting your executive in taking difficult decisions and you need to understand the impact of doing that, or not doing that. Governors need to understand where the step off points are if something is not going well; you don’t wait for five years before you do anything, you have to be abreast of how your decisions are working out.”

According to John Rushforth, governance culture in higher education “is often one of caution, hierarchy and risk aversion”. He cites one commentator who described governing bodies as “recklessly prudent” and asks whether this amounts to “cultural dysfunction”.

But one governor in the south of England believes that governing bodies, by their very nature, have to be cautious.

“There is an element of risk aversion, but I think it is important to realise that there ought to be,” he said. “The main function of the board is oversight. Its function is not to come up with a brilliant mould-shattering idea that will lift the institution above all the competition. Even if such an idea existed, the executive would see it as an invasion into its area.”

For this governing body member, oversight is about saying “have you thought about this, have you thought about that, maybe don’t go so fast until you’ve done this other step thoroughly”. 

Where the governing body can play a part in change and innovation is in its role in recruiting and setting objectives. 

“The board then has a role in getting in innovators and in saying we need creative ideas and a bit of risk taking to achieve those objectives,” he said. “In the current climate, boards should take time out to reimagine reshaped organisations and discuss that. That is something I have pressed for and we are doing. But this is not necessarily at odds with, a little but further down the line, saying we need more caution in a particular area.”

Robust discussion on governing bodies can help clarify what needs to be done and where unintended consequences may arise.

For one governor in London, supporting, but also challenging, the executive is not a zero-sum game.

“Just taking on board what is presented to you is not the job of the board: we have to get assurance for a number of things - that is the task the regulator has given us,” she said. “We have to, as far as we can, ensure financial sustainability. Our role is to question but in a respectful way, within a relationship of trust and overall positivity.”

As a Chair puts it: “We want the university executive to do a really good job and to help them do that. My job is to make sure the board does its job really well - so we have to question and challenge.”

This includes being cognisant of, and raising, ethical concerns. 

“Universities do their best on this,” said the chair. “For instance, where there is a plan to cut staff numbers, they do their very best to make sure it is as fair and open a process as possible. When developing partnerships, we try to get the values of the partner institution to align with our value base. But sometimes business objectives might have to take over in the real world.”

The governor at another university points to the protection at many institutions of jobs related to student wellbeing, despite acute financial pressures.

“Boards are getting better at starting from the basis of the student experience and they are worried about the impact of making reductions in areas that have an impact on that,” he said. “If anything, boards’ inclination is to reduce less than the situation demands from a financial point of view.”

Better governing body transparency would help stakeholders understand the governor standpoint, according to a governor at a new university. He points to publishing delays at some institutions of governing body and committee minutes, and welcomes suggestions in the blog about open or even streamed meetings and Q&A sessions.

“Boards need to think more about the different stakeholders that can make use of the information,” he said. “The primary one is staff and that is where most good can come from more exposure. Some staff think the institution is being run by people who just want to squeeze out as much as possible and that boards do not care about or value their work. It can be really positive where you can have more interaction, even in times where you have to make some difficult decision.”

Another area of concern highlighted in the John Rushforth blog is skills gaps on governing bodies and a lack of critical thinking. Are governors’ approaches coloured by their own time at university and do they understand the current student experience? 

“There are still some institutions where there are people on the board who think they are in Oxbridge circa 1930,” said one governor. “It just does not do the sector justice. Having said that, there is much more concentration of skills matrixes in recruiting than there has ever been.”

Another governor points to the average age of governing body members – just over half of  governors are aged 56 or over (52.7 per cent, compared with 18.8 per cent of academic staff: see Advance HE report) - and questions the extent to which they can really understand the pressures and demands on modern students. He emphasises the importance of creating opportunities to engage with the student body and looking closely at the findings of student surveys.

Another concern raised in the blog is whether in the current tough financial climate, leaders are entirely consumed by short-term pressures to the detriment of longer-term strategy and thinking about future risks and opportunities. 

It is a legitimate concern, according to governors, but one that can be mitigated by regular reviews of medium and longer-term plans and good modelling.

“We try and plan but short-term pressures get in the way,” said a governing body member in London. “It doesn’t consume us, but we really have to make efforts to look at the longer term.”

According to another governor, “strategic deficit is absolutely a danger of the current situation”. He says that the focus on achieving the goal of reshaping and reducing can mask longer term objectives. 

“An institution might achieve its financial aim but end up catering to only one part of the community,” he says.  Short-sightedness can mean the nature of an institution might shift fundamentally, losing aspects of its core mission in the process.

“In this climate, effective decision making has to be looked at in the context of what universities are going through at the moment,” he adds. “In decisions on shaping and restructuring, there is so much thinking about where demand for services lies and how institutions can deploy themselves. Not thinking things through thoroughly enough is a real risk.”