Phil Baty looks at the strengths and weaknesses of governing bodies and asks: are you safe in their hands?
Anyone with enough time on their hands to do a proper job as a university governor tends not to have the "streetwise nous" to do the job well, says Jonathan Ree, a former staff governor at Middlesex University.
Philosophy lecturer Professor Ree quit the Middlesex board earlier this year having "lost faith" in its ability to hold managers to account, he said. Celebrating a minority of hard-working members, he believes that most university governors are simply not of the right calibre for overseeing the proper management of billions of pounds of public money.
In an open letter to staff regarding his resignation, he explained that because university governors are all volunteers, "most of them have onerous business outside the board: even with the best will in the world they cannot be expected to form genuinely independent judgements on every matter that comes before them".
The limited amount of research on university governance suggests that Professor Ree's perception of a personnel problem is legitimate.
Last summer, a picture of white, middle-class, aged governors supervising the higher education sector badly was painted by Peter Scott, at the time director of the centre for policy studies in education at Leeds University, and his research associate, Catherine Bargh.
Governors, they found, were atypical of the student community, and of the population at large. Their research found that governors were aged between 46 and 65. All but 2 per cent were white, and only 17 per cent were women, compared with 50 per cent women in schools and 22 per cent in colleges. Almost half (43 per cent) voted Tory in the 1992 general election. Four out of ten had professional backgrounds.
Analysis by The THES, based on 1997 data, shows that only 9 per cent of board chairs are women. A minority come from academia, with 13 per cent PhDs and just three professors. Although a questionable measure of calibre, 21 chairmen have knighthoods.
These are the people with ultimate authority for all the affairs - including the proper stewardship of public funds - of legally independent corporate institutions. Yet Scott and Bargh concluded that "governing bodies have failed to hold errant vice-chancellors to account".
Recent high-profile exposes of governors' roles in incidents at Portsmouth, Glasgow Caledonian, and Southampton Institute, among others, have led to serious moves to improve accountability and efficiency.
Nolan's committee of standards in public life made clear the importance of meritocracy, after problems with cronyism. Nolan's report said that governing bodies "must select on the basis of merit and skills subject to the need to achieve a balance of relevant skills and backgrounds on the board".
Lord Dearing's report into higher education acknowledged the problem: rapid and extensive change, said Dearing, "has made particularly heavy demands on the office-bearers in governing bodies who generously give their time and expertise on a voluntary basis". "We are strongly of the view," he said, "that the quality of membership of the governing body is crucial."
But Dearing touched only on ways to improve the calibre of governors. He said that membership must "not be determined by external appointments or offices held but on the expertise and capacity of the individual". Nominations committees would ensure this.
But Dearing concentrated largely on structural issues and the machinery of accountability. A code of practice, with a register of interests at its heart, underpinned Dearing's plans. Members and chairs should serve for not more than two terms, usually of three to four years each. Board membership should be "unambiguous", lay people, staff and students should be members. Governing bodies should report annually and be subject to regular reviews of their effectiveness.
The government welcomed the broad thrust of Dearing plans, and the Committee of University Chairmen redrafted its guidance for governors and issued a new guide in March this year. But little could be prescribed, and underpinning Dearing's report was the explicit recognition that institutions were autonomous.
Those boards that have moved definitively to improve accountability and transparency are, of course, to be celebrated, said Professor Ree. But some of the most squeaky-clean and transparent governing bodies can be the most ineffectual. "It is all very well congratulating yourselves on being Nolan-pure and conforming to a code of practice," said Professor Ree, "but if you have got no gumption, you will not be a good governor. Governors are either retired civil servants or people too busy to do the job properly."
Patrick Lister, 76, has just given up his chairmanship of the board of governors at Coventry University after 11 years. He is a retired engineering chief executive.
He spots the inherent contradiction in the personnel issue - being retired is integral certainly to being a good chair, he said, because of the necessary time commitments. But board members must also be "in touch" with the real world.
"I have to say, the better chairs are retired," he said. "It is a question of loyalty and commitment. Chairs are no longer just figureheads plucked from the great and the good. There is a lot of pressure to participate to a high degree, and it can be very demanding."
Mr Lister's typical commitments as a governor included the main governors meeting once a term; all finance and personnel subcommittee meetings (about three or four a term); "always the odd working party"; and social events, such as public lectures, meetings with local authority representatives, degree ceremonies.
But Mr Lister acknowledges the importance of a serious business-like approach, with members in touch with the commercial world. "What I have always preached is that we are a non-executive board of a public company," he said. "We are no different, and we must behave in those terms. We were lucky at Coventry, we had a good mix - a solicitor, an engineer, a representative from the chamber of commerce, and someone from the Trades Union Congress."
Coventry governors were never beholden to the executive, he said. "The leading questions we put to the vice-chancellor and his team came fast and furious," but this kind of scrutiny, he accepts, depends entirely on the personalities of members, which can vary enormously between institutions.
Personnel is certainly an area of governance that the committee of university chairmen is trying to address. "It is an issue for us," said CUC chairman Ken Dixon, chair of governors at York University. "It is something that we talk about. It is not always an easy process to find people with the time and the right balance of skills and the right relevant experience. People with major outside commitments cannot always resolve conflicts of time in the interests of the university, while retired people may not be as close to outside affairs and what goes on in the world. I must say I'm retired but remain involved in a number of things. It is largely up to institutions to arrange it in their own way."
The CUC, he said, would recommend external advertising for board members, and a forum to allow members to put forward names. "This is done by most," he said. "But it is up to the institution."
Any attempt to impose uniformity would not work, Mr Dixon believes. "There are different policies between institutions. Some just want big names, some want local people, some want national people, if they can get them to attend. There is no single formula. Universities are autonomous."
In the new university sector, Professor Ree believes, much of the problem lies in the changes introduced in the 1988 Education Reform Act, when local authority funding was switched to the Polytechnics and Colleges Funding Council, and locally elected councillors were removed from boards.
"It is very striking there are no political people," he said. "In the old days, councillors were alert to the thought that people in positions of power in the university might want to mislead them, but the new breed of governors are all so trusting."
Mr Lister disagrees: "It is more convenient not to have the local authority member on the board. We maintain very close relations with them anyway." But he believes that as board members they have too many commitments, and political vested interests in other places.
Despite calls for the return of locally elected representatives to college governing bodies, it is unlikely to happen in higher education.
The solution to the personnel problem, believes Mr Lister, is to keep governing bodies small. Coventry had just 19 members. "We kept the board on the minimum side," he said. "It is big enough to get a good cross-section of people and to set up subcommittees without too much burden on members, and communications are easier. And the bigger the board, the more people are able to offer their apologies and opt out."
His views are shared by Clive Booth, chair of the Committee of Vice-Chancellors and Principals' Nolan group, and former vice- chancellor of Oxford Brookes University for 11 years. "We had a council of only 13 - the minimum number under law. It worked extremely well for us. We had a group that could get round a small table and work well together. And because we were only looking for a small number of members, we could be very selective when recruiting. We didn't have a problem with finding people of a high calibre. We could have a high-calibre team three or four times over, because of our size."
Another tip from Professor Booth: "Advertise locally. People who have to travel more than an hour to get to meetings often can't make it."
But the make-up, size and structure of governing bodies are, by historical accident, subject to huge variations across the sector, and may be enshrined in charter statutes which can be changed only by the Privy Council. New universities, under the 1992 Further and Higher Education Act, are required to have a membership of between 12 and 25.
Old universities can have bodies of normally about 50 members. The London School of Economics, the only university that is a company limited by guarantee, has almost 90 members.
Professor Booth said: "Many old universities are trying to work with councils of 40 or 50. That is very hard - you can't get any personal chemistry."
Indeed, Lord Dearing tried to impose a ceiling on membership at 25. "Governance needs to be vested in a body whose size is conducive to effective decision-making. We do not believe that, over the next 20 years, very large governing bodies will be conducive to the proper exercise of individual and collective responsibility, to individual liability or to institutional effectiveness." He recommended bodies of more than 25 should "show good reason" why a larger body is needed, he said.
The government, in its response to Dearing, said that this was a valid suggestion and promised to introduce new procedures to enable institutions wishing to review the size of their governing bodies to make the changes more quickly. But, as ever, institutional autonomy prevailed. "The outcomes of reviews of size and internal effectiveness are a matter for institutions," ministers decided.
The question of size is one of the CUC's most pressing concerns. Mr Dixon said: "People at the moment are aiming to bring their numbers down and there is a downward trend. But there is no magic number. I'd expect numbers to average out at around 30. But it is more important to ensure you have got a multi-functional body, with enough people to be able to do the job."
PROBLEMS WITH GOVERNING BODIES
THE PUBLIC ACCOUNTS COMMITTEE
The House of Commons financial watchdog, in a report last summer on university's building projects warned: "The committee is deeply concerned that governance arrangements at some institutions do not comply with best practice."
More than 10 per cent of institutions do not have registers of interests, the PAC found, and some do not have arrangements to handle conflicts of interest. The committee expressed its "deep concern" that governors were not properly accountable and value for money could not be guaranteed.
Investigations by the National Audit Office into the overseas activities of the institute, published last week, found "a lack of cohesiveness in the board of governors". Governors had not been properly informed or involved in decision-making and power was "concentrated in a small group of individuals". The clerk to the governors was not sufficiently detached from management.
The NAO recommended that higher education institutions should "ensure that all governors are aware of their role in decision-making".
Following two years of campus unrest, staff called for the resignation of David Smith, chair of governors.
GLASGOW CALEDONIAN UNIVERSITY
Inquiries surrounding the controversial sacking for gross misconduct of principal Stan Mason, found the governance at the institution wanting. Although Mr Mason recently won a claim for unfair dismissal, John Sizer, chief executive of the Higher Education Funding Council for Scotland, had criticised arrangements for governance at the university as "poorly drafted", "ill-defined" and "showing some significant weaknesses".
The NAO found that "errors of judgement" were made by governors in their handling of investigations into expenses fraud by vice-chancellor Neill Merritt. The governing body at first decided not to notify the funding council of the problem, which was "wrong". They were also "unwise" to delay a full audit inquiry until after the claims had been raised with Mr Merritt.
SWANSEA INSTITUTE OF HIGHER EDUCATION
An investigation by the NAO found "a breakdown in both governance and management" at the institution. Governors and managers took 91 trips abroad between 1992 and 1996 - at a cost of Pounds 125,000 the NAO found.
The severance package of former principal Gerald Stockdale, who had made expenses claims that were "not accounted for", was "ill-conceived". The governors remuneration committee "went beyond terms of reference," said the NAO.
"It is disturbing ... that there should have been such fundamental weaknesses in governance," the NAO said.
HOW UNIVERSITY BOARDS SHOULD ACT
GUIDELINES FOR THE CONDUCT OF BUSINESS BY GOVERNORS', issued by the Committee of University Chairmen
* Governors are ultimately responsible for: funds, both public and private; strategic planning; performance monitoring; auditing arrangements; estate management; safeguarding an institution's charitable status; staffing; students union; and health and safety
* Governing bodies should observe the seven principles of public life, laid down by Lord Nolan - selflessness; integrity; objectivity; accountability; openness; honesty and leadership
* Governing bodies must meet "regularly at reasonably frequent intervals"
* Decisions should be taken collectively
* The chairman must take care not to be "drawn into the day-to-day executive management"
* The executive head of an institution should not seek to determine matters reserved for the governing body
* The secretaryof a governing body should be appointed by the governors
* The secretary of a governing body should separate managerial functions from his/her role as giving professional and legal advice to governors
* Institutions should have a register of interest for members of the governing body, which should be publicly available, and regularly updated
* Members should be fully briefed on their roles and responsibilities, and receive induction
* Members can be remunerated for expenses such as travelling and subsistence
* Governors should approve an annual strategic plan
* Any delegation of governors' work must be clearly defined in writing, and the board is still ultimately accountable
* The chairman is answerable to the board for any action which he/she takes on its behalf
* All subcommittees should be provided with a clear remit and written terms of reference
* The turnover of "new blood" is essential. Continuous service beyond three terms of three years is "not desirable"
* Staff and student representation on boards is "integral"
* There should be access to information about the proceedings of the governing body
* Material on governance should be published in institutions' annual reports
* Governing bodies should review both their own effectiveness and the institutions' performance at regular intervals.