Governance failings are putting UK universities at risk of collapse

New research shows that inadequate oversight is leaving institutions dangerously exposed, says Andrew Kakabadse

January 13, 2021
A house of cards
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Predictions that some UK higher education institutions are facing disaster are hardly new. There have even been recent rumours that 40 of them are “in cash trouble” as a result of the pandemic. Yet our new report, University Governance: A Risk of Imminent Collapse, breaks new ground by using the words of university leaders themselves to illuminate what is going wrong and propose some remedies.

The report forms part of a two-year research programme conducted by a team at Henley Business School, which carried out in-depth interviews with 43 opinion leaders (from a number of sectors), focusing on the role of independent directors. Their responses informed our subsequent survey, which was then tested to eliminate ambiguities. The final survey generated 135 responses from within higher education, across a range of leadership roles and university types and sizes. The words of vice-chancellors, chairs and members of university boards led us to a number of unnerving conclusions.

We know that the UK HE sector is facing a number of fundamental challenges to its position as a global leader in research and innovation. This has clearly been made worse by the pandemic, but even at a local level many universities struggle to identify their unique purpose and to provide qualifications that meet the needs of students and employers. Of particular note was that the majority of our respondents predicted that at least 20 per cent of UK higher education institutions will not survive in the current economic, political and educational climate. Indeed, several universities were mentioned as potential candidates for collapse (though only time will tell whether these insider predictions come to pass).

We also identified some of the crucial governance issues that help explain this. The office of vice-chancellor has acquired tremendous power in recent years, while university councils – supposed to act as a counterbalance – are poorly structured and outdated. Some v-cs appear to enjoy this state of affairs, but most are left exposed, either insufficiently challenged or inadequately supported by their councils.

The Committee of University Chairs’ Code of Governance states that “the governing body is unambiguously and collectively accountable for institutional activities, taking all final decisions on matters of fundamental concern within its remit”. This is a bold aspiration. Unfortunately, our study finds that councils do not possess the necessary personnel and skills to act as high-performing bodies. Universities are often very large organisations, with a level of complexity not found in many other enterprises: it is hard for council members to understand what is going on, or fully appreciate what matters most to the university. Vice-chancellors’ effective control of the agenda leads to an information chasm between the executive and independent council members, who lack the time or patience to find out more about the institutions they oversee.

Indeed, despite the tough challenges faced by universities, we found an extraordinary level of complacency and lack of engagement among many of the independent directors sitting on their councils. According to our research, 42 per cent of members never visit faculties, while 30 per cent don’t have roles as independent directors elsewhere (which might enable them to bring more relevant experience to their university posts).They tend to spend little time on the role, with an average attendance of only 16 days per year, most of them devoted to preparing for and attending council or committee meetings. Governance arrangements seldom encourage them to be proactive.

Moreover, university councils are large and unwieldy, and devote insufficient time to debate and scrutiny. Our research indicates that 80 per cent of councils have no more than six meetings a year, and most of them last no more than three hours. All of these failings must surely be a major factor in why many universities are struggling.

Our analysis has led us to make a number of suggestions. The role of chair of council urgently needs strengthening. Universities need to think and consult far more deeply about independent council members’ pay, the time they devote to council matters, and their roles and responsibilities. They should set out a formal policy on independent council members’ engagement with the wider university and staff. And there needs to be increased sector-led investment in the recruitment, training and development of council members.

Where should struggling universities turn for support? A sector regulator could drive improvements in governance, as the Care Quality Commission does for the National Health Service, identifying problem institutions before they reach irretrievable failure and help them fix governance issues in good time. The Office for Students might be the right vehicle to take on this role if it were able to expand its existing remit and support universities requiring special measures. The only alternative to such a remedy is to allow failing universities to collapse.

Andrew Kakabadse is professor of governance and leadership at Henley Business School.

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