Montagu directors hold Law's academic reins

The private equity firm that owns the UK’s first for-profit university will have a say in controlling the institution’s academic authority.

January 3, 2013

Unlike all other UK universities, the University of Law is not a charity but a company limited by shares.

Three of the company’s eight directors are employees of Montagu Private Equity, which completed the purchase of the former College of Law for about £200 million after the government’s decision to award it university title.

The University of Law’s articles of association, lodged with Companies House, state that the “directors shall, using their powers under the Companies Act, establish and thereafter maintain an academic board to act as its academic authority”.

The articles add: “The directors shall establish and thereafter maintain regulations governing the composition, powers and responsibilities of the academic board.”

The directors have the same powers over the academic standards committee, according to the articles.

Sally Hunt, the University and College Union’s general secretary, conceded that board membership for owners is standard practice in private-equity takeovers. But she said that this was “not what we are looking for in our universities. The direct power of fund directors over academic decision-making … raises serious issues of academic integrity.”

Geoffrey Alderman, professor of history and politics at the University of Buckingham and a former chair of the University of London’s academic council, said he had no concerns over Montagu Private Equity’s board membership, but expressed concerns about the directors’ powers over the academic board.

He said: “My reading is that the company has the sole and unfettered right to determine the composition, powers and responsibilities both of the academic board and of the academic standards committee. Where is the safeguard here?”

In other universities, academic standards were “a matter for the most senior academic body of the university”, its senate or academic board - which Professor Alderman said he would expect to have a majority of members “elected or appointed by academics”.

A spokeswoman for the University of Law said that the “governance arrangements, including corporate and academic, have been the subject of independent audit” and were signed off by the Higher Education Funding Council for England board and the Department for Business, Innovation and Skills.

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