The sector’s financial challenges have shone a spotlight on governance effectiveness in higher education in England.
When the incoming government tasked the Office for Students (OfS) with directing more of its energy towards financial sustainability in the summer of 2024, it was only a matter of months before director of regulation Philippa Pickford put forward the view that the sector needed “a conversation” about governance, specifically about how robustly boards had tested some of the financial projections they had been prepared to sign off.
That signal of concern about governance has clearly manifested in the corridors of the Department for Education (DfE), if these words from the Secretary of State to the Commons Education Committee in May are anything to go by:
The government is clear that there needs to be a focus on and improvement in providers’ governance. Planning and strategy development within higher education providers, including financial planning, should be supported by the highest standards of governance to ensure realistic planning, robust challenge and the development of sustainable business models.
The sector has not been unresponsive to these cues – Advance HE in partnership with the wider sector is (taking the conversation metaphor literally) curating a “big conversation” about governance and the Committee of University Chairs (CUC) has pledged to review the higher education code of governance – which for a large number of institutions acts as a reference document for compliance with OfS’ conditions of registration on governance.
The implicit underpinning premise from OfS and DfE is fairly stark: the government is disavowing any responsibility it might have to come up with a financial settlement that would shore up higher education finances while retaining the current delivery model; nor is it especially keen to have to deal with institutional bailouts arising from institutional inability to manage the changed funding landscape. The strong signal is that it is up to higher education institutions to work out how to survive in this environment – and if boards are not up to the task of finding the answers then it’s the boards that need reforming.
Business acumen
I read this communication as part of a discursive stand off between government and the sector in which the lines between the role of government and role of individual institutions in securing the future of higher education is contested. Within that context, the validity of the implied criticism – that boards are insufficiently businesslike and strategic – needs to be interrogated.
There was a fascinating piece on The Critic last week by University of Buckingham academic Terence Kealey bemoaning the rise of the managerialist board. In Kealey’s analysis, when the balance of power in governance tilted towards the Senate – the governing body of academics – the institution thrived, as evidenced by strong performance in NSS and a financial surplus. But when the Council flexed its muscles, the university faltered, dropping in the league tables and spending more than it brought in.
Kealey’s core argument – that academics are best placed to steward the core higher education mission of excellent teaching and research – picks up a longer standing critique of higher education governance that perceives organisational strategic objectives as articulated by institutional boards and executive teams as frequently in opposition to the academic endeavour, being far too concerned with financial efficiency, performance management, reputation/league tables, and capturing market share. Echoes of aspects of this critique appear in the recent Council for the Defence of British Universities’ proposed code of ethical university governance, which urges boards to adhere to high standards of transparent, principled, and public-spirited conduct.
At the other end of the spectrum, the criticism of higher education governance – including sometimes from governors themselves – is that boards are insufficiently businesslike, fail to articulate long-term strategic objectives that will secure the institution’s sustainability, and have limited entrepreneurial spirit that would allow the institution to adapt to adverse headwinds. A more moderate version of this criticism argues that it is very difficult to convene the diverse skillset that could allow for effective board oversight of the wide range of activities that higher education institutions do.
Thinking about activities like academic and knowledge exchange partnerships, the creation of new campuses or the erection of new buildings, or civic and international engagement, all of these have the the academic endeavour at their core but are mostly about deploying the knowledge and reputational assets of the institution to generate additional value – and they each carry complicated associated legal and regulatory compliance expectations and reputational risk. It’s not clear that developing those strategies and managing those risks and expectations coheres well with academic professional practice – though some academics will obviously have a keen interest and want to develop knowledge in these areas.
The worst of both
There has always been an expectation that higher education institutions need to be simultaneously academically excellent and sufficiently business savvy to make sure the institution remains financially stable. Both academic and institutional governance can fail – the latter often more spectacularly and with greater reputational impact – but the impact of academic governance failure is arguably greater overall both on the long term health of the institution and on the lives of the staff and students affected.
So you could argue that it’s odd and/or problematic that the sector has witnessed the erosion of the power of senates and academic boards as part of a wider set of trends towards a more executive style of higher education leadership, the rise of metrics, league tables and more managerial approaches to institutional performance, the intensification of regulatory expectations, and the steady withdrawal of direct public funding from the sector. It’s telling that under the current regulatory regime in England institutional boards have had to master new expectations of oversight of academic quality, on the presumption that all institutional accountability should sit in one place, rather than being distributed – suggesting that quality is now seen as part of the wider business imperative rather than a counterweight to it.
But simply pivoting the balance of power back to senates and the academic community doesn’t necessarily address the problem. It’s possible, I suppose, to imagine a relatively benign or at least predictable funding and regulatory environment in which some of the pressing strategic questions about institutional size and shape, partnerships, or external engagement are answered or moot, and in which knowledge stewardship, academic excellence, and (one would hope) student learning experience are the primary purpose of higher education governance.
But even if that environment was plausible – I’m not sure it has ever existed – it doesn’t really address the more existential contemporary questions that governments and the public seem to be putting to higher education: how does the country see, and experience the value of all this knowledge stewardship and academic excellence? To realise that value and make it visible in more than an ad hoc way – to be institutionally accountable for the systematic manifestation of public value from academic knowledge – requires knowledge and professional practice beyond individual teaching and research excellence. And, more prosaically but equally importantly, buildings, infrastructure, and systems that create the environment for effective knowledge stewardship. Without a functioning institution there can be no knowledge stewardship.
There’s a reason, in other words, even if you strip out all the neoliberal value propositions from higher education governance, why higher education institutions need a “business” arm and associated governance structures. And that’s before you confront the actual reality of the current situation where the funding and regulatory environment is neither benign nor predictable – and the need for effective external relationship-building and systematic collaboration is greater than it has been in decades.
On the other hand, some of the business decisions that are made to secure financial sustainability or long term institutional success put the academic imperative at risk. Rapid growth in student numbers, redundancy programmes, departmental or services cuts or new strategic partnerships can compromise quality, as we have seen in a number of recent cases. There may be mitigations or the impact may be worth the reward, but there can be no meaningful strategic decision without being able to weigh up both.
Yet where we have ended up, I fear, is in the worst of both worlds – institutional boards that are neither sufficiently academically robust to have a grip of academic excellence nor sufficiently strategic and entrepreneurial to ensure institutions are able to thrive in the current higher education landscape. This is no shade to the immense talent and knowledge of the individuals who take up roles as higher education governors – it is a structural critique.
Creative tension
Where I end up is with the question – if there is really an inbuilt tension between the academic and business imperatives of higher education institutions, what would it look like for that tension to be a productive one in higher education governance rather than a source of toxicity?
I suspect – though I’ve not (yet) asked – many vice chancellors and their executive teams would argue that in their individual experience and team skillset they manifest both academic and business imperatives – that in fact, it is their job to reconcile these two aspects of institutional leadership in their daily practice, decisions, and communications.
Yet if that reconciliation of two competing imperatives is the job of leadership, arguably it’s not going all that well. While this experience is by no means universal, it’s clear that at times both academic and professional staff can feel sidelined and disempowered in the tug of war for day to day resource – but also at a deeper level for a recognition of their purpose and contribution to the higher education endeavour. Each can feel subordinated to the other in the institutional hierarchy – yet while there are outliers on both sides I’d put money on the majority of individuals on both sides accepting and embracing the value and contribution of the other. Yet at the same time the real tensions and contradictions that manifest in the pursuit of the two parallel imperatives are deeply felt by staff yet not always acknowledged by leadership.
What if the job of leadership and boards of governors was not to seek to reconcile academic and business imperatives, but to actively manage the conflicts that arise at times? Where strategic questions arise related to either opportunities or risks, boards need to understand the perspective of both “sides” before being able to judge whether the executive team’s decisions are appropriate. And for institutional staff (and students, to the extent they have a role in institutional governance) there needs to be confidence that the governors have the skills and understanding of the value and importance of both imperatives and the relationship between them – so that there is the trust that decisions have been made in the most effective and transparent way possible.
There might even be a case for institutions to convene internal business strategy boards as part of the governance structure as a counterweight to academic boards – actively empowering both equally as sites of knowledge, expertise and influence – and potentially reducing the strategic burden on institutional boards through creating a more transparent and maybe even more democratic or at least representative forum for internal governance of strategic business development.
It seems likely that the next academic year will see the higher education sector in England move on from “conversations” about governance into something more systematically developmental, whether that’s via the mechanism of the CUC’s review of the Higher Education Code of Governance, or a policy agenda from one of the sector bodies. This is one of those areas where the sector can help itself with government by taking a lead on reform.
Yet there’s a risk that the financial pressures on the sector lead to too close a focus on the strategic business imperatives and not enough on the academic excellence imperative. Institutions need both to be successful, and boards and executive teams – as well as any reviewing organisation – need to give deep consideration to how those can – even if not always peacefully – coexist.
