Board agenda

It’s been a volatile fortnight. UK universities have faced rises in employer national insurance contributions, increased tuition fees and a seismic election result in their biggest competitor country for international students. Their independent—almost always non-remunerated—boards will need to respond to all three.

These boards play an increasingly important role in a university’s strategic direction. They influence its long-term sustainability, how it realises its goals and ambitions, and the approach it takes to opportunity and risk.

Since the 2017 Higher Education and Research Act, expectations of governing bodies have increased, particularly given that universities must meet the Office for Students’ Conditions (OfS) of Registration in order to access student loans and recruit international students. These conditions state that the governing body must “accept responsibility for the interactions between the provider and the OfS and its designated bodies, and ensure the provider’s compliance with all of its conditions of registration and with the OfS’s accounts direction”.

In response, guidance on good governance in higher education has also increased. The Committee of University Chairs identifies six key principles of good governance: accountability, sustainability, reputation, inclusion and diversity, effectiveness and engagement. These should combine to create “an organisational culture which gives freedom to act, establishes authorities and accountabilities and… fosters mutual respect, trust and honesty”.

The strategic issues facing the sector, the complexity of the current policy environment, relationships between governing bodies and executive teams, and the balance between assurance, strategy and regulation, are all critical to institutional success—especially when the sector is facing unprecedented challenges.

Pressing questions

The most pressing questions for boards are around financial sustainability. Structural underfunding of research, freezing of undergraduate income through domestic fees, rapid shifts in universities’ recruitment strategies and volatility in international student recruitment mean that more than a third of the sector is now in deficit. 

Institutional responses include rapid revisions to income projections, tightened cost controls including voluntary severance and compulsory redundancy, reviews of staff terms and conditions, asset disposal, restructuring programmes, portfolio overhaul, and a retrenched student offer. These decisions are being taken at speed against rapidly evolving circumstances and often involve complex discussions with regulators and lenders.

National policy

The second set of questions focuses on the emerging national policy agenda. Since the election, the rhetoric around universities has changed substantially. Peter Kyle, the science secretary, has said the war against universities is over, and they are once again seen by government as national assets, engines of growth and opportunity.

The Labour Party manifesto sets out, in one short paragraph, an ambitious agenda for higher education access, for world-leading impact, for integration with further education, for supporting local communities, for credit transfer, for improved teaching standards and for stronger regulation. Bridget Phillipson’s recent letter to the sector began to turn that into a reform agenda.  Even resource-rich institutions would find this agenda demanding, which means any single university and its board will need to make tough strategic choices.

Rhetoric also needs to be tempered with realism. The announced uplift in fees is only a small first step towards addressing the sector’s financial sustainability, while the policy to exclude international applicants from bringing dependents looks unlikely to be reversed any time soon.

Structural shifts

The final set of questions is about the structure of the sector and the way universities position themselves in relation to longer-term trends, as well as how they stay attractive to growing numbers of young people while assuring a broader set of audiences and stakeholders that they offer both high quality and value for money.

Between 2030 and 2035, the number of 18-year-olds will fall by 20 per cent, with enormous implications for universities. By 2050, the government expects the UK to be net zero in emissions, with huge implications for today’s estate and infrastructure planning. AI and digital technologies, with their own heavy infrastructure needs, are transforming the economy and will reshape educational delivery and the staffing base.

All universities will need to understand these and other deep shifts as part of their long-term planning. Yet almost no university and no governing body is addressing what institutions will look like beyond the lifespan of their current strategic plan—how they will generate value, their role within a wider tertiary sector, their position in local and regional economies, and how they may need to change as a result of major technological and cultural shifts.

Fork in the road

As universities reach this fork in the road, the demands on governing bodies are shifting. A largely benign policy environment for much of the past two decades has led universities and their boards towards broadly homogenised strategies, with little differentiation in vision, strategy, or even implementation across the sector.

Strategies prioritise enhancing student experience, often without a deep understanding of the current and future student body. Financial sustainability is sought through a drive to internationalisation, often based on target numbers that now look heroic and are insufficiently evidence-based. Commitments to becoming more active in research and impact often fail to factor in quality and real-terms cost. There has been little attempt to define true distinctiveness, or to test alternative operating models, whether individually or collectively.

If higher education in future is framed more explicitly within a wider tertiary context, with many institutions having to share services and assets, governing bodies will need to take decisive and bold decisions about identity and distinctiveness, with significant long-term consequences.

New approaches

This means four things: first, boards need to think harder about the longer-term positioning and mission of their university—well beyond the immediate challenges of balance sheets, league table positioning or recruitment trends. This means understanding options and choices, testing identity and distinctiveness, and seeing the bigger tertiary picture both locally and nationally.

Second, boards need to be more agile in responding to a rapidly changing policy and operational environment, placing as much emphasis on risk and opportunity as on regulation and assurance. Reflexive responses to straitened finances will be to reduce and sometimes radically cut provision, but this will risk a downward spiral. The landscape of higher education is likely to change—perhaps radically—and boards will need to be aware of possibilities to share, extend, and even merge services and structures.

Third, and following from this, boards will need to become far more data engaged, understanding what their own data is saying about their performance, positioning and potential, and what longer-term data are saying about the development of the higher education sector. Becoming more informed and future-focused will be critical in providing effective support and challenge to executive teams.

Fourth, and underpinning all these, governing bodies will need to ask hard questions about themselves. The sector has familiar, and largely effective, tools for assessing boards’ day-to-day effectiveness. But these tools need to develop—and to do so quickly—if governing bodies are to respond confidently to the different challenges they will increasingly need to address.

Leadership is the critical ingredient in successful strategy delivery, and this is as true in relation to boards as it is in any other aspect of higher education. But university leadership is under the spotlight as never before. Governing bodies bring a wealth of skills and expertise from which the sector has much to gain. These four approaches may not offer all the answers, but addressing them seriously and successfully will lay the foundations for governance that is fit for the future.

Janice Kay, Richard Calvert and Chris Husbands are directors of Higher Futures, supporting institutions in navigating strategic change and securing excellence. Janice was formerly provost at Exeter University, and Chris and Richard were formerly vice-chancellor and deputy vice-chancellor at Sheffield Hallam.

By Janice Kay, Richard Calvert and Chris Husbands

Originally posted on: – https://www.researchprofessionalnews.com/rr-news-uk-views-of-the-uk-2024-november-board-agenda/