Powers and Responsibilities of the Board of Governors

Transcription

1 Powers and Responsibilities of the Board of Governors 1. The powers and responsibilities of the Board of Governors are derived from a number of sources. This section summarizes the principal powers and responsibilities for reference. Reference is also made below to where further guidance is available. Statement of Primary Responsibilities 2. In February 2016, the Board of Governors adopted the following statement of primary responsibilities in order to elucidate its role as the institution s governing body: To work in consultation with the executive to set the mission and strategic direction of the University, its long term academic and business plans, performance indicators, and to ensure that these meet the interests of stakeholders. To ensure that appropriate supporting strategies are in place, including in relation to Finance, Estates and Human Resources, to enable the University to achieve its mission. To ensure that the governing body has a clear understanding of the University s core academic business and that an appropriate Academic Strategy, as approved by the Academic Board, is in place. To monitor and evaluate the performance and effectiveness of the institution against plans and to work with the Executive to establish appropriate key performance indicators, which should be, where possible and appropriate, benchmarked against other appropriate institutions. In addition to the authority delegated to the Vice-Chancellor (as chief executive) for the academic, corporate, financial, estate and personnel management of the institution, to establish and keep under regular review the policies, procedures and limits under the authority of the Vice- Chancellor. To be the principal financial and business authority of the institution, to ensure that sound financial processes and procedures are in place, to approve and monitor the annual budget and financial statements, and to have overall responsibility for the university s assets, property and estate. 1

2 To be the University s legal authority as defined under the relevant legislation, and as such, to ensure that systems are in place for meeting all the institution s legal and regulatory obligations, including those arising from contracts and other legal commitments made in the institution s name. To make appropriate provision for the support, advice, guidance and welfare of students, in consultation with the Academic Board. To ensure the establishment and monitoring of systems of control and accountability, including financial and operational controls and risk assessment, and procedures for handling internal grievances and for managing conflicts of interest. To establish processes to monitor and evaluate the performance and effectiveness of the governing body itself. To conduct its business in accordance with best practice in higher education corporate governance and with the principles of public life drawn up by the Committee on Standards in Public Life. To safeguard the good name and values of the University. To appoint a Vice-Chancellor of the institution as chief executive, and to put in place suitable arrangements for monitoring his/her performance. To appoint a secretary to the governing body and to ensure that, if the person appointed has managerial responsibilities in the institution, there is an appropriate separation in the lines of accountability. To be the employing authority for all staff in the institution and to be responsible for approving and reviewing a human resources strategy. To act as trustee for any property, legacy, endowment, bequest or gift in support of the work and welfare of the University. To ensure that the University s constitution is followed at all times and that appropriate advice is available to enable this to happen. 3. The statement accords with the precepts of the HE Code of Governance, a voluntary code with which it is recommended that higher education institutions comply. Statutory Powers of higher education corporations 4. The statutory powers of higher education corporations are defined in 124 of the Education Reform Act 1988 as follows: "(1) A higher education corporation shall have power:- (a) to provide higher education; (b) to provide further education;... 2

3 (c) to carry out research and to publish the results of the research or any other material arising out of or connected with it in such manner as the corporation think fit;... (2) A higher education corporation shall also have power to do anything which appears to the corporation to be necessary or expedient for the purpose of or in connection with the exercise of any of the powers conferred on the corporation by subsection (1) above, including in particular power:- (a) to conduct an educational institution for the purpose of carrying on activities undertaken in exercise of any of those powers and, in particular, to assume the conduct as from the transfer date applicable in relation to the corporation of the institution in respect of which the corporation is established and for that purpose to receive any property, rights and liabilities transferred to the corporation under section 126 of this Act; (b) to provide facilities of any description appearing to the corporation to be necessary or expedient for the purposes of or in connection with carrying on any such activities (including boarding accommodation and recreational facilities for students and staff and facilities to meet the needs of students having learning difficulties); (c) to supply goods and services; (d) to acquire and dispose of land and other property; (e) to enter into contracts, including in particular:- (i) contracts for the employment of teachers and other staff for the purposes of or in connection with carrying on any such activities; and (ii) contracts with respect to the carrying on by the corporation of any such activities; (f) to subscribe for or otherwise acquire shares in or securities of a company for the purpose of carrying on any such activities; (g) to borrow such sums as the corporation think fit for the purposes of carrying on any activities they have power to carry on or meeting any liability transferred to them under section 126 of this Act and, in connection with such borrowing, to grant any mortgage, charge or other security in respect of any land or other property of the corporation; (h) to invest any sums not immediately required for any of the purposes mentioned in paragraph (g) above; (i) to accept gifts of money, land or other property and apply it, or hold and administer it on trust for, any of those purposes; and (j) to do anything incidental to the conduct of an educational institution providing higher or further education. 3

4 (3) The power under subsection (2)(j) above includes in particular power:- (a) to found scholarships or exhibitions; and (b) to make grants and give prizes." Degree awarding powers 5. The power to award degrees is specified by order of the Privy Council under 76 of the Further and Higher Education Act The University has the power to award taught, research, and honorary degrees. The University may authorise other institutions to award degrees on its behalf and award degrees jointly with other institutions. The University has the power to deprive any person of a degree which it has awarded (including collaborative and validated awards). Oversight of the Students Union 6. Pursuant to 22 of the Education Act 1994, the Board of Governors is responsible for ensuring that the Students Union operates in a fair and democratic manner and is responsible for its finances. This, in particular, includes taking such steps as are reasonably practicable to secure that the requirements set out in 22 are observed by or in relation to the Students Union. These requirements include ensuring that the Students' Union has a written constitution and that its provisions are approved by the Board of Governors and reviewed at intervals of not more than five years. These responsibilities continue notwithstanding the registration of the Students' Union as a separate charity with the Charity Commission. Responsibilities under the Instrument and Articles of Government 7. Article 3 specifies the Board s formal responsibilities as follows: 3.1 The Board of Governors shall be responsible for: (a) (b) (c) the determination of the educational character and mission of the University and for oversight of its activities; the effective and efficient use of resources, the solvency of the University and the Corporation and for safeguarding their assets; approving annual estimates of income and expenditure; (d) the appointment, grading, suspension, dismissal and determination of the pay and conditions of service of the Vice- Chancellor, the Clerk, the holders of posts of Deputy Vice- Chancellor and any other holders of senior posts; 4

5 (e) (f) setting a framework for the pay and conditions of service of all other staff; and for the assignment and appraisal of the Vice-Chancellor and the Clerk to the Board of Governors. 8. The formal responsibilities of the Vice-Chancellor and the Academic Board are set out in Articles 3.2 and 3.3 respectively. Ancillary powers and responsibilities 9. The Board has a number of ancillary powers and responsibilities derived from the Instrument and Articles of Government. These include: (a) (b) (c) (d) (e) (f) (g) Name of the corporation: Pursuant to paragraph 2 of the Instrument of Government, the Board of Governors may, by resolution, change the name of the Corporation with the consent of the Privy Council. Membership: Pursuant to paragraphs 4 and 5 of the Instrument of Government, the Board must make a determination regarding its membership and is the appointing authority for all members except independent members. Payments: Pursuant to paragraph 9 of the Instrument of Government, the Board is authorised to make annual payments, within prescribed limits, to the Chair of the Board and Chairs of Committees. Delegation: Pursuant to Article 5, the Board may establish committees for any purpose, other than those assigned to the Vice-Chancellor or Academic Board, and may delegate powers to such committees or to the Chair of the Board of Governors or to the Vice-Chancellor. The following powers may not be delegated: the determination of the educational character and mission of the institution; the approval of the annual estimates of income and expenditure; ensuring the solvency of the University and the Corporation and the safeguarding of their assets; the appointment or dismissal of the Vice-Chancellor; the varying or revoking of the Articles. Chair and Deputy Chair: Pursuant to Article 7.8, the Board must appoint two independent members to be Chair and Deputy Chair for terms of office of three years. Appointment and Promotion of Staff: Pursuant to Article 8.1, the Board must adopt an equal opportunities policy in respect of the appointment and promotion of staff. Pursuant to Article 8.4, the Board is responsible for determining the arrangements for the appointment of the Vice- Chancellor, Clerk, and the holders of other senior posts. Conduct of Staff and Academic Freedom: Pursuant to Article 9, the Board is responsible for making rules relating to the conduct of staff, after consultation with staff representatives. These rules must be consistent with the principle of academic freedom. 5

6 (h) (i) (j) (k) (l) Suspension and Dismissal of Holders of Senior Posts: Article 10 sets out the procedures whereby the Board (or its officers, as the case may be) may suspend or dismiss the Vice-Chancellor and / or other holders of senior posts. Dismissal of Other Members of Staff: Pursuant to Article 10, the Board is responsible for establishing, after consultation with staff representatives, the procedures for the dismissal of staff by the Vice- Chancellor and for the consideration by the Board of Governors of appeals against any such dismissal. Grievance Procedures: Pursuant to Article 11, the Board is responsible for adopting grievance procedures, after consultation with staff representatives. Students Union: Pursuant to Article 12.1, the Board is responsible for approving the constitution of the Students Union and any amendments thereto. Students: Pursuant to Article 12.2, the Board, after consultation with the Academic Board and student representatives, is responsible for making rules regarding the conduct of students, including procedures for suspension and expulsion. Pursuant to Article 12.3, the Academic Board must consult with the Board and student representatives in determining the procedures for expulsion of students on academic grounds. (m) Fees: Pursuant to Article 13.1, the Board is responsible for determining tuition and other fees payable to the Corporation. (n) (o) Accounts: Pursuant to Article 13.2, the Board is responsible for keeping accounting records and appointing auditors. Rules and Bye-Laws: Pursuant to Article 14, the Board has the power to make rules and bye-laws regarding the government and conduct of the University. Responsibilities to HEFCE 10. Under the terms of the Memorandum of Assurance and Accountability between HEFCE and the University, governing bodies must ensure that the mandatory requirements of the Memorandum of Assurance and Accountability are complied with, and that full and appropriate consideration is given to all elements of the Memorandum of Assurance and Accountability and the Audit Code of Practice. HEFCE also requires governing bodies to ensure that the conditions of grant imposed by other public funding bodies are complied with. 11. HEFCE requires institutions to meet the legislative requirements imposed upon them as corporate bodies, in particular the laws relating to: 6

7 higher education institutions, notably the Further and Higher Education Act, 1992 employment health and safety diversity and equality of opportunity. 12. Members of governing bodies are charitable trustees and, in some cases, directors of companies. As such, HEFCE requires compliance with the Charities Acts (see further below) and, if applicable, the Companies Acts. In particular, HEFCE requires trustees to discharge their duties of compliance, prudence (including to ensure financial solvency) and care, and to accept ultimate responsibility for the affairs of the charity. The duties on trustees and directors (as set out in chapter 2 of part 10 of the Companies Act 2006) are similar in that they require board members to promote the interest of the organisation and to act with integrity, care and prudence. 13. HEFCE requires that governing bodies discharge the obligations imposed on them by institutions constitutions (charters and statutes or instruments and articles of government). In particular, governing bodies must: ensure that the finances of the institution are managed in order to ensure solvency and sustainability appoint and supervise and, if necessary, suspend or dismiss the vicechancellor or principal ensure the welfare of students is secured ensure that there is an effective framework overseen by its senate, academic board or equivalent to manage the quality of learning and teaching and to maintain academic standards. 14. HEFCE expects governing bodies to organise and conduct themselves in accordance with the good practice guidance and principles set down by the Committee of University Chairs (CUC). HEFCE expects governing bodies to adopt the HE Code of Governance and to report on their compliance with the HE Code of Governance every year in their financial statements or to explain why their governance arrangements differ from those recommended by the CUC. 15. HEFCE expects each governing body to adopt a statement of primary responsibilities in line with HE Code of Governance in which the governing body delegates to the head of institution responsibility for the management of the institution and its policies. 16. HEFCE expects members of governing bodies to conduct themselves in a manner appropriate to public office holders and to adhere to the seven principles of public life which are set out by the Committee on Standards in Public Life for the benefit of individuals who serve the public in any way. 7

8 17. HEFCE expects governing bodies to undertake periodic reviews of their effectiveness and to produce reports and action plans for improvement that are made public. 18. Finally, note that there is a requirement under HEFCE's Accounts Direction for universities (as charities) to report each year on how they have delivered their charitable purposes for the public benefit. HEFCE has issued guidance (available on its website) on the fulfilment of this obligation. Responsibilities as charity trustees 19. In addition to their responsibilities under the Instrument and Articles and to HEFCE, members of the Board are also 'charity trustees' and must therefore have regard to the requirements of charity law. Some of these requirements are already reflected in the responsibilities listed above, but it is helpful to briefly summarise the key provisions here. 20. Firstly, as charity trustees, members of the Board owe a duty of care to the University, and also to the students and any other beneficiaries (i.e. the people for whose benefit the University is established). 21. Board members must act independently from any other role which they may hold. 22. In managing the University the basic duty of Board members is to always act in the best interests of the University, and exercise reasonable care and skill in performing activities on its behalf. 23. In practical terms, members of the Board should:- (a) (b) (c) (d) take full responsibility for oversight of the charity (subject to the responsibilities ascribed in the Articles to the Vice-Chancellor and the Academic Board), meet regularly, act in person, and not delegate the control of the charity to others (noting in particular the provisions of the Articles regarding delegation and the matters which are reserved to the Board see paragraph 9(d) above). Where responsibilities for a particular area of work are delegated, trustees retain a duty to supervise agents and to review what they are doing, intervening as necessary; act strictly in accordance with the Instrument and Articles of Government and not use the income or capital of the University for any purpose which does not fall within the statutory powers of the University (see above paragraph 4). Particular care is necessary in respect of activities primarily intended as a means of generating revenues; prudently manage the University's affairs. A key element of this is balancing short term and longer term objectives; act without regard to their own personal interests and not obtain any personal benefits from the University except for (broadly) reasonable 8

9 (e) (f) out of pocket expenses, or if the benefit is permitted in the University's Instrument and Articles of Government (eg as mentioned at paragraph 9(c)); always try to act with fairness in determining who should benefit from the University's income and/or other property (i.e. do not unfairly prioritise one group of people over another); on an ongoing basis, try to identify risks arising from the charity's activities and consider how best to manage those risks. 24. If the Board is not competent to deal with any matter then it should seek professional advice. 25. Members of the Board should ensure that no conflicts of interests arise whilst making decisions, such that if a matter may affect the personal interests of any member of the Board, then that member should not be present during the discussion or decision making of the matter. 26. As noted in above, members of the Board have various obligations in relation to the property and finances of the University and in particular must exercise reasonable care whilst carrying out their duties. For example, the University's property should remain under the control of the Board and adequate insurance should be maintained. The accounts must distinguish between funds which are held for different purposes and controls on the University s finances should be in place. 27. Where the University holds funds which are not required for immediate expenditure then the Board should ensure that the funds are invested. The Board should satisfy itself that the suitability of each investment is considered and that a diversified range of investments is adopted in order to spread and manage risk. Investments should be reviewed regularly. 28. One other key requirement under charity law which the Board should be aware of is the requirement for the University to demonstrate 'public benefit' in the delivery of its charitable objects. The public benefit requirement has the following key elements:- a. there must be an identifiable benefit (or benefits), which is clear, unambiguous and related to the aims of the University in general. This benefit must be balanced against any detriment which may arise from the achievement of the aim in question; b. the benefit must be available to the public or a section of the public (and the beneficiaries must be appropriate to the aims). c. the beneficiaries of the University cannot be unreasonably restricted by, for example, geography, or ability to pay fees. 29. Note that the Charity Commission has published detailed guidance on how these requirements apply in the context of both educational and fee-charging charities, to which Governors should refer (including consideration of steps which can be taken to address issues around the affordability of fees, which is 9

10 likely to be a key issue for universities). HEFCE has also provided a useful summary of the key principles in the charity regulation section of its website. 30. The Board is also obliged to report on public benefit in the University's annual report (see paragraph 18 above). Health and safety 31. Under the Health and Safety at Work Act 1974, the University must ensure, so far as is reasonably practicable, the health, safety and welfare at work of staff. The University is also required to ensure that it operates in such a way as to ensure, so far as is reasonably practicable, that students, visitors and others are not exposed to health and safety risks arising from University activities. 32. The Board should ensure that the University complies with the above duties by providing leadership on safety issues and monitoring the effective performance of the University's safety management system including its written health and safety policy. 33. The University owes a duty of care to its staff, students and visitors to its premises. Where a person's death results from a gross breach of this duty of care then the University may be prosecuted for an offence under the Corporate Manslaughter and Corporate Homicide Act The Board is therefore responsible for ensuring that University activities are managed and organised so that in exercising its duty of care towards these individuals the University does not fall far below the standards to be reasonably expected. 34. Board members may be held individually responsible and prosecuted by the authorities for University health and safety failings where these are attributable to neglect on their part or to have arisen through the consent or connivance of that Board member. Equality 35. The Board is responsible for ensuring that the University complies with the Equality Act 2010, which consolidates and streamlines previous antidiscrimination legislation. The stated aim of the Act is to reform and harmonise discrimination law, and to strengthen the law to support progress on equality. The Act replaces all existing equality legislation, including the Equal Pay Act (1970). The Board makes unlawful discrimination on the grounds of the following protected characteristics: age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief (including lack of belief); sex; sexual orientation. 36. The main sections of the Act relating to employment, equal pay and services, public functions and associations, education (further and higher education) came into effect in October 2010, replacing relevant sections of previous antidiscrimination legislation covering these areas. The public sector equality 10

11 duty came into force in April 2011, replacing the previous public sector duties in the Race Relations (Amendment) Act 2000, the Disability Discrimination Act 2005 and the Equality Act In 2012, the ban on age discrimination in the provision of goods, facilities, services and public functions is expected to come into effect. 37. Note that there is a specific exemption under the Act which, in certain circumstances, allows a charity (therefore including a university) to limit its benefits to people who share a "protected characteristic", where either (i) the aim is to tackle a particular disadvantage faced by people who share that "protected characteristic" or (ii) the restriction can be justified as being a fair, balanced and reasonably necessary way of carrying out a legitimate aim, taking into account the discrimination involved. In essence, therefore, this may allow the University to engage in positive discrimination in certain circumstances. However, in both cases the Instrument and Articles would need to limit benefit to people with a shared protected characteristic. The application of the exemption is therefore likely to be limited and advice should be sought before seeking to rely on it. Bribery Act and related criminal laws 38. The University has proceeded on the footing that it is considered a relevant commercial organisation for the purposes of the Bribery Act 2010 in light of its various business activities. The Act imposes a strict criminal liability on relevant commercial organisations for failure to prevent bribery where any person associated with them bribes another person intending to obtain or retain business or a business advantage for them. The only defence available to the commercial organisation will be to demonstrate it had "adequate procedures" in place designed to prevent bribery by associated persons. An associated person is anyone who performs services for or on behalf of the commercial organisation, in whatever capacity. 39. The University s current Counter Fraud and Anti-Bribery Policy was approved by the Audit Committee at its meeting on 30 October Government Guidance on Adequate Procedures, published in March 2011, articulates the principle of Top-level commitment to preventing bribery and the importance of fostering a culture within the University in which bribery is never acceptable. 40. In addition to the corporate offence of failure to prevent bribery, the Bribery Act consolidates and extends previous corruption laws in the UK, which apply both to individuals and bodies corporate, and can extend to conduct outside of the UK. The Act means Board members may be held individually responsible and prosecuted by the authorities if they consent or connive in a bribery offence committed by the University as a body corporate. 11

12 41. In addition to the Bribery Act 2010, Board members should be aware of their own and the University's potential criminal liabilities under the Proceeds of Crime Act 2002 if they suspect that corrupt activity may have occurred. Amongst other things, separate offences can be committed if the University acquires or transfers property that constitutes the proceeds of crime or enters in to any other arrangement in connection with such property, without first obtaining consent to do so from the relevant authorities. Best Practice and General Principles of Governance 42. As mentioned at paragraph 14, there are good practice guidance principles set down by the Committee of University Chairs (CUC) which the Board should aim to uphold and follow. Although this document cannot purport to cover all of the HE Code of Governance, the following are some particular responsibilities which the Board may like to refer to:- (a) (b) (c) (d) (e) the adoption (and regular review) of suitable risk management and control systems (e.g. see element 3 of the HE Code of Governance); the adoption of best practice in relation to procedures for the conduct of business by the Board (e.g. see element 2 of the HE Code of Governance); the requirements of employment law and the principles of human resource management (e.g. see element 7 of the HE Code of Governance); the need to consider, approve and keep under review an appropriate estate strategy (e.g. see element 7 of the HE Code of Governance); compliance with data protection principles. Updated October