The Code of Higher Education Governance has had a complete rewrite

It’s difficult to think of a sector more important to the long term health of society and the economy than higher education.

Our sector educates and develops the next generation of talent, it is an engine for social mobility and local economic prosperity, and it is a world leader in research. Although the sector is autonomous, it is also in receipt of large amounts of student and public money. Boards, or their equivalent, are the primary governing authorities for their institutions, and the standards of governance they uphold is of critical importance.

The current financial state of the sector has led to intense scrutiny and much criticism of those standards. Whatever one’s view of the past, the future is that universities, and the students they serve, must navigate a world which is changing in material, unpredictable and volatile ways. The consequences attached to strategic judgements, or of ineffective oversight are profound, and the expectations placed on those charged with governance are naturally increasing.

Against this backdrop, and with a strong belief that the sector should take responsibility for raising its own standards of governance to meet the challenges of the future, the CUC has undertaken the largest programme of evidence gathering and consultation in its history. The result is a fundamental re-set of those expectations, embodied in a complete rewrite of the Code of Higher Education Governance. The code applies to all CUC members, other than those in Scotland, who adhere to the Scottish Code of Good Higher Education Governance.

Cross-sector relevance

The review had multiple objectives. First and foremost to develop a code of genuine practical value to those responsible for governance and leadership in the sector. Second, to build on the many examples of best practice we found in our evidence gathering, as well as looking outwards at other sectors both at home and internationally. Third, to work collaboratively across nations, with diverse parts of the sector, with executive and non-executive leadership, with students, with staff, with sector representative bodies, with academics, with governments and with regulators. And finally, for the the process of consultation and engagement to raise the profile of governance and to stimulate a sector-wide conversation.

The greatest challenge was to produce a code which would have relevance to a hugely diverse sector made up of of autonomous institutions, without resorting to the lowest common denominator. That led us to a code with six core principles, each underpinned by provisions which set out those minimum standards which must be adhered to, and those which should be adhered to. The latter category allows institutions to adopt a different approach where they can demonstrate and explain, that in their specific context, it better meets the intent of the code.

The transparent application of this “apply or explain” mechanism is fundamental to the effective working of the code. Where institutions adopt an alternative approach, it must not mean a lesser standard, and where it is done, the code expects institutions to publish clear, meaningful and compelling explanations.

There is little evidence of a single optimum structural governance model, so the code does not prescribe specific board structures and composition. However, it is clear as to the outcomes which governance structures must achieve, which will require institutions to give fresh consideration to traditional sector practices and norms.

Governance culture and behaviours; strategy, sustainability, risk and assurance; and academic governance are amongst the themes which were identified in the consultation as requiring significantly greater focus and they feature much more prominently in this version of the code compared to its predecessors.

Judged on impact

Underpinning the code is a belief that effective governance involves a partnership between non-executive and executive leadership, and the new code is much clearer as to the roles and responsibilities of those in key positions, and of the levels of engagement, support and development which are required.

The expectation which the code sets is that governance improvement should be treated not as a point in time “pass-fail” scoresheet prepared for the board, but as a board-owned process of regular reflection and continuous improvement. Governance effectiveness reviews should be viewed as important mechanisms by which institutions can challenge themselves, and periodically be challenged independently, to identify how their governance practices can be developed. We heard that, in too many cases, these can be performative and box-ticking exercises which do not achieve this, so the CUC will shortly be issuing further guidance in this area.

The publication of the new code is the start of a journey, and the code will rightly be judged not on its quality as a document, but on its impact. We will no doubt learn a lot in the early months of its adoption, and CUC is committed to working with others to support institutions as they bring it to life, and to helping the sector learn from each other. It would have been impractical for the code to address individually every issue facing the sector, and we found strong demand for the development of further guidance on the application of the code to key topics, so this is also an important priority for CUC, working in collaboration with others.

Working on the new code over the last year been a heartening experience, and the CUC is extremely grateful to everyone who has contributed to its development. What might have emerged as a negative and divisive project has been anything but. From the outset, and throughout the sector, there has been a strong appetite to engage in a thoughtful and constructive manner. The quality and level of that engagement is hopefully reflected in the code. It is also a cause for optimism, and a demonstration of the power of sector collaboration in taking responsibility for itself.