There is progress on senior remuneration, but more transparency is needed

Advance HE has reviewed the impact of the Committee of University Chairs' code of practice on senior remuneration in HE. John Rushforth responds.

John Rushforth is the Executive Secretary of the Committee of University Chairs.

There is a quote often attributed to Benjamin Franklin, “In this world, nothing can be said to be certain, except death and taxes.”

If he were alive today, he would probably add, “…and that there will continue to be articles in the press saying how outrageous the salaries paid to vice chancellors are.”

In 2017 these stories achieved a new intensity and in part led to the development of the CUC higher education senior staff remuneration code, published in June 2018. Despite the publication of the code, however, the issues have not gone away.

Senior pay at universities is a complex issue and is not helped by a general lack of awareness, outside of the sector, of the complexity and scale of running a modern university and the reality of the competitive global marketplace in which universities must recruit and retain the best talent.

Recent stories have accused senior staff of receiving “eye-watering salaries” and “inflation busting” pay increases which are far in excess of other staff at their university and are a “source of shame for the university sector.” These accusations were mitigated to an extent when several vice chancellors opted for voluntary pay reductions as a response to the Covid-19 pandemic, but the dominant narrative remains one of unreasonable levels of remuneration.

Independent review

Although the code was well received at the time, the world has moved on, and it is important to honour the commitment given when we published the code that we would review it after a full year of operation to see if it was fit for purpose.

We took the view that the best way to test if the code was working was to commission a fully independent review. With this in mind, we asked Advance HE to carry out such a review now published in full. We think it is a robust and encouraging report.

We are pleased that overall:

  • There is a high degree of awareness of the code, especially among CUC’s members
  • Survey recipients indicated that 97 per cent use it to guide their remuneration committee activity
  • Most respondents and interviewees consider that procedure and practice at their institution has changed for the better in recent years
  • There was a very high degree of agreement in the survey that the elements of the code are applied at their institution
  • 95 per cent of respondents agreed “senior pay at my institution is fair, appropriate and justifiable”
  • 98 per cent agreed that “individuals are not involved in deciding their own remuneration”

The report concludes that the remuneration code is being adopted by its intended audience and that universities are making efforts to strengthen their governance of senior staff pay in the interests of transparency, accountability and public confidence.

Improving transparency

The one disappointment in the review was that although 73 per cent of those who use the code stated they publish a “readily accessible annual statement, as modelled in the code,” the quality of statements Advance HE sampled was highly variable.

Transparency is a vital part of the Code and we need to redouble our efforts to demonstrate the basis of the decisions we make. We hope therefore that HE leaders will review their own website and assess for themselves whether their annual statement is easy to find and easy to understand, and for our part will support institutions with examples of good practice.

Advance HE also helpfully points out areas where there could be improvement in four key areas: strategic, regulatory, transparency, and operational. We accept those recommendations and will be working with partners and stakeholders to implement them over the coming months.

It is important that we all work to improve public understanding of what we do and the contribution we make, even if we know that the dynamic of public discourse is such that all we are unlikely to transform the negative coverage of senior pay into a positive description of the value of higher education and its contribution to societal and economic growth.

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