Can the HE sector govern its own pay?

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Far away from all the furore in Westminster about a few people getting and leaving jobs, writing about perceived injustices on others’ behalfs, and then Tweeting furiously at each other about it, some actual HE policy is beginning to emerge.    

With neither headlines nor hashtags, and less than an hour before the change of university minister, the Committee for University Chairs (CUC) launched a consultation on a draft of new remuneration guidance for the UK higher education sector.

The guidance is thorough and well-reasoned, addressing the balance of factors and stakeholders required in senior pay decisions, which also varies by institution.

Will this new guidance allow the sector to rise above its critics with clear, unassailable moral leadership, or will it fall back into their sights for self-serving and unaccountable practices?

CU-who?

CUC is the representative body for the 135 individuals that chair UK university governing bodies (or their equivalent boards etc.). Membership is voluntary and open to non-executive chairs of institutions with degree-awarding powers and full university status (and who pay their membership dues).

Since CUC’s predecessor organisations first started in 1986, it now has a small staff team of four, and an Executive Committee of seven. It supports its network of members with training, events and guidance, and works with a range of partners (including Wonkhe), in order to promote high standards in university governance across the whole UK sector.

Recent publications include guidance on hiring a chair or a vice chancellor, an ‘illustrative practice note’ on remuneration committees, and the evolving HE Code of Governance – last updated 2014, and which members are expected to adhere to. In October 2017, the Committee of the Chairs of Scottish Higher Education Institutions produced the Scottish Code of Good Higher Education Governance, which Scottish institutions should ‘look first to’. Both codes already have sections on good remuneration practices, with the new guidance providing updates to the remuneration section of the CUC Code.

Chairs’ action

After a summer of discontent about senior pay in the sector, much heat in the press, and some recent high-profile departures, the CUC is now openly inviting responses (to 24 questions) about its draft guidance, developed after initial input from members and others.

The new 17-page guidance document aims to support governing bodies and remuneration committees, to ensure people of “appropriate calibre” are: rewarded in a fair, transparent and accountable way; that also attracts, retains and motivates them; and which achieves value for money. It is hoped that achieving this balance will maintain long-term trust in “our world-leading sector”, while not losing ‘talent’ to better-paying roles in Australia or the USA.

The proposals for the voluntary guidance include greater transparency and clarity about pay decisions, tighter rules about supplementary earnings, and more reasonable severance payments. Remuneration committees should have suitable expertise and vice chancellors should not sit on them for decisions about their own pay.

In line with some other sectors, universities should also publish pay ratios each year, with four-fifths currently paying vice chancellors 4.5-8.5 the ‘average’ staff salary. The University of Bath’s vice chancellor was paid £468,000, 12 times that of the average member of staff.

A new ‘apply or explain’ principle means institutions must provide public and ‘meaningful explanations’ for any situations where they do not follow the guidance or have made alternative arrangements, while still allowing for institutional diversity.

‘Must’ and ‘should’ statements identify what is a minimum requirement versus what is encouraged. There is also a template for an institutional annual remuneration report. The guidance will be reviewed every four years.

Will the sector take this opportunity?

Jo Johnson may have left the HE sector for the bright lights of transport, but Andrew Adonis still has a Twitter account, UCU will be watching closely, and the Office for Students chair has spoken repeatedly about senior pay since being appointed. It’s not clear yet what Sam Gyimah or his new boss Damian Hinds think about senior staff pay, but value for money has been a useful lever for their predecessors.

The UK higher education sector is a diverse community of independent and autonomous institutions. The recently lowered bar to entry means it should be about to get even more diverse. It will now be up to each of those individual universities, and the individuals who lead and govern them, to respond to recent pressures in a way appropriate to their institution. Each will need to follow due process, make clear, fair and reasonable decisions about pay, and balance the needs of all the different stakeholders involved.  

That task should not be underestimated, and there will always be criticism from some quarters. But, if they can do it, then the sector will be able to build on its excellent global reputation for many more years. If they can’t, you can expect even more headlines, distracting from other issues – such as funding and regulation.  

The deadline for responses to the consultation is 12 March 2018 and the final guidance will be agreed at the CUC Spring meeting on 20 April, for implementation from September. CUC is one of the supporters of Wonkhe’s IT’S ALIVE! conference on higher education regulation, on 20 March at the British Library.

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