Universities should consider paying board members and be more ruthless about what is discussed in governance meetings in order to better manage institutional risks, a new report has recommended.

 finds that while governance practices have “evolved and changed” at some institutions over time, other parts of the sector “have only been able to demonstrate minimal changes to their approach to governance”. 

The report says this has “contributed to a failure of appropriate oversight and these instances have garnered significant attention”.

������investigation into the recent crisis at the University of Dundee identified “weak governance” as a cause of the financial failure, as well as a “culture in which challenge was actively discouraged”. 

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AdvanceHE’s report points to culture as “arguably the biggest factor in determining the difference between a highly effective and a less effective board”, including “getting the right balance of challenge and support”.

This is “where the right level of information is supplied to governors, but equally governors themselves have a sufficient degree of expertise and curiosity to ask the right questions and know when to probe and challenge,” it says.

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The report identifies 10 elements of governance that could “continue to change”, including reflecting on board composition and diversity, as well as engaging boards more proactively in scenario planning and stress testing of assumptions and forecasts. 

While traditional risk registers may examine threats in isolation, boards’ analysis should factor in “multiple risks materialising simultaneously”, the report says. 

It also suggests there needs to be more “agility” in decision making, but notes that the typical frequency and cycle of meetings – which may only happen a few times a year – can make this challenging. 

The report says there is a need for “ruthlessness about focusing on matters which are strategic, a regulatory or statutory requirement or of material significance”.

“If an item does not meet these three tests, there should be challenge as to why it is taking up board time,” it says. However, “there are also concerns that if an increase in meetings [is] required this will not be easily achieved when most institutions rely on governors giving up their time on a voluntary basis”.

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AdvanceHE goes on to suggest considering the “benefits of remuneration”. While university governors aren’t traditionally paid, the report says, “the expectations of governance have increased dramatically in the last five years”, especially for chairs. 

“A number of chairs are committing more than 30 days a year to the role and the vast majority do this without remuneration,” it continues. “There is a serious question and discussion to be had about who can put themselves forward without payment.”

Other sectors, such as the NHS and housing associations, do commonly pay board chairs and, sometimes, board members. 

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Alistair Jarvis, the new chief executive of AdvanceHE, told ̽����Ƶ the recommendation was not suggesting “all governors should be paid”.

However, “there are certain challenges about attracting [and] retaining diverse talent,” he said. “There’s certain challenges about the level of expectation on…chairs [and] the governing bodies. 

“I think there needs to be a conversation in the sector about whether some remuneration in certain circumstances might be helpful.”

The Committee of University Chairs – a representative body for board chairs – is also reviewing its code of governance, partially as a response to the financial pressures facing the sector, and the report’s findings will be shared with the organisation. 

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“Governance is not a silver bullet,” said Jarvis. “It’s not going to solve your challenges, but it will help you manage them more effectively.”

helen.packer@timeshighereducation.com