5.1 We have described earlier the formidable challenges facing higher education institutions. This chapter of our report considers the system infrastructure, at United Kingdom (UK), Scottish and institutional levels, which is needed to deliver high quality higher education as efficiently and effectively as possible. Here we discuss issues of institutional governance and management and management of the system. Although these inter-relate, we recognise that they are quite separate.

5.2 The National Committee, quoting from a guide produced by the Committee of University Chairmen, describes the governing body as 'the executive governing body of the institution and carries responsibility for ensuring the effective management of the institution and planning its future development. It has ultimate responsibility for all the affairs of the institution'. The guide continues: 'The governing body has a duty to enable the institution to achieve and develop its primary objectives of teaching and research. This responsibility includes considering and approving the institution's strategic plan...'86. Other responsibilities of the governing body include: finance - ensuring the solvency of the institution and safeguarding its assets; strategic oversight of estates; ensuring that charitable status is not breached; employment policies; ensuring that the students' union or association operates in a fair and democratic manner and responsibility for its finances; and health and safety of employees and students.

5.3 In looking to the future of Scottish higher education, we have also considered in depth how it might more effectively be managed. Our discussions here cover two aspects of the management of higher education in Scotland - the management of individual institutions and the management of the system as a whole.

5.4 Finally in this chapter, we comment on staffing in the Scottish higher education sector.


5.5 In recent years the issue of governance of publicly-funded bodies has attracted considerable interest and several reports have been written on the subject. We have considered Nolan, Jarratt, Cadbury and the Scottish Guide for Members of Governing Bodies and all have provided sound suggestions and recommendations for good governance in higher education.87,88,89,90 Indeed, a compendium of the relevant sections of these documents would form a useful induction pack for new governors and we commend this suggestion to institutions. We believe firmly that the quality of institutional governance, management and leadership is the key to institutional success. We therefore endorse the principles and wide-ranging proposals set out by the National Committee in Chapter 15 of its report, calling for greater accountability, transparency and clarity of responsibility in matters of governance.

5.6 Some collaborative work on governance arrangements, between institutions, the Scottish Office Education Department (as it was then) and the Privy Council, at the time of the Further and Higher Education (Scotland) Act 1992, has resulted in reasonable clarity over which bodies have ultimate responsibility within Scottish higher education institutions. Unlike the rest of the UK, there is, therefore, no urgent need to test the position in respect of the supreme decision-making body in each institution in Scotland.

5.7 The National Committee's recommendations are extensive, and, whilst many are already in place in Scottish institutions, we urge each institution to consider an early review of its procedures and structures with a view to implementation where appropriate. In this section we address some additional and distinctively Scottish issues.

Size and composition of governing bodies
The National Committee has suggested that to ensure effective governance the supreme decision-making body should be relatively small and should not exceed an upper limit of 25 members, with a majority of lay members. We have some misgivings that even 25 members could be too large for effective governance and have heard evidence in support of this view.91 However, we have also heard counter-evidence that a larger governing body provides better succession planning for the key positions on the governing body for lay members. We therefore support the National Committee's guidance and urge Scottish higher education institutions to work towards governing bodies of no more than 25 members.

5.9 Our investigations show that, with slight adjustment, most governing bodies in Scotland can already, or could, work within this limit and we propose that those with total members in excess of 25 should take steps to voluntarily reduce numbers. Where legislation is required for an institution to meet this requirement, the institution should request the Secretary of State for Scotland to make the necessary arrangements.

The governing body might wish to establish a number of sub-committees, chaired by lay members, to give more detailed consideration than could be given at full governing body meetings to a range of issues. Under an alternative model which we have observed in some institutions, there has been established a management sub-committee of the governing body, which works closely with the management executive to give detailed attention to management issues. This sub-committee, of around 12 executive and lay members including the chairman of the governing body and the Principal, meets regularly and reports back to each meeting of the full governing body. We are attracted to such an arrangement in the pursuit of effective governance and management of institutions. However, in recognition of the diversity of institutional types in terms of size and complexity, we hesitate in recommending this to all institutions.

5.11 We recognise that each member of the governing body has individual responsibility for effective governance and that collectively the governing body must be comfortable with the governance structures adopted by the institution. Whatever arrangements pertain, they must be clearly seen to progress institutional management and governance in the interests of the institution and its staff and students. We therefore support strongly the National Committee's recommendation that governing bodies should undertake an annual review, with external assistance, of their performance against aims and objectives.

5.12 There are many examples to show that high quality lay members already sit on institutional governing bodies but we have heard from institutions that finding effective lay members, particularly from the private sector, is not an easy task. Also, once involved, high-quality lay members will wish to contribute actively. In order to do so, members of governing bodies require effective briefing by institutional management. In its evidence to the Inquiry, the Confederation of British Industry (CBI) (Scotland) indicated that many of its members had considerable experience of managing major change programmes which could be of relevance to the higher education sector. To assist in the provision of effective governors and high quality lay membership, we urge CBI Scotland, Scottish companies and other organisations to give encouragement to senior executives who wish to serve on institutional governing bodies.

Recommendation 19
We recommend to the Confederation of British Industry (Scotland), Chairmen and Chief Executives of Scottish companies and other organisations that they should be responsive to institutional needs for high quality lay members for their governing bodies.

Office of Rector
Governance arrangements in the four ancient Scottish universities are distinct from the rest of Scotland, and unique within the UK, in that a Rector, elected by the matriculated students of the university (and staff in the case of the University of Edinburgh) for a period of three years, chairs the University Court, the supreme decision-making body of the university.

5.14 The role of the chairman of the university Court is central to setting the institutional agenda and promoting its strategic aims. The individuals elected to serve in this capacity must be able to do so proficiently and in the best interests of a multiplicity of interested constituencies, including staff and students and, above all, the institution as a whole. The current position is, therefore, too haphazard to ensure that these crucial aims are met.

5.15 We have taken advice on this matter from the four ancient universities and noted that all university Courts now have permanent student representation. We consider the Rector is a valuable asset to Court, and therefore should be retained, to act, as originally envisaged, as a spokesperson for students. However, we believe that the office of Rector should no longer be linked automatically to the chairmanship of the University Court. We believe that the chairman of Court should more properly be elected by all members, and we agree with the National Committee that this should be for a period of no longer than three years, renewable for three years. If satisfying the criteria for eligibility, the Rector could, of course, stand for election to the position of chairman.

Recommendation 20
We recommend to the four Scottish ancient universities and to the Government that the office of Rector should no longer be linked to the chairmanship of the University Court, and that the appropriate legislation should be enacted to support this change in institutional governance.

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