Recommendations
1. MINISTERIAL POWERS OF INTERVENTION WITH COLLEGES
1.1 Ministerial power of direction The issue was examined in the early stages of the Working Group's activities. This was made necessary by changes to charities law, and in particular the threat to the charitable status of colleges which resulted from the power of Ministers to give a Direction to a college Board. The Working Group was agreed on the importantance of retaining charitable status for the sector, but was unable to reach a unanimous view on the need to retain the power. Noting that it had never been used (other than for administrative reasons), for which alternative methods are available, Ministers ultimately decided to revoke their power to give a Direction in order to remove any risk to colleges' charitable status.
Recommend that the Scottish Executive and partners keep the issue under review, in line with the commitment given by Ministers to the Enterprise and Culture Committee in March 2006.
ACTION: Scottish Executive
1.2 Other statutory and non-statutory interventions The Working Group gave consideration to the revocation of Ministers' power to give a Direction. The group noted that neither the Executive's response to the Parliamentary Audit Committee's report on Inverness College, nor the DTZ recommendations, indicated any need for further interventions. In particular, the working group noted the effectiveness of the Funding Council's ' FE Development Directorate' [ FEDD] and the positive references to the FEDD made by the Audit Committee. Recommend no change to the powers of statutory or non-statutory intervention in the affairs of colleges (other than the actions recommended elsewhere this report).
2. SUCCESSION PLANNING
2.1 Succession planning Recommend that guidance on succession planning, drawing on good practice in colleges identified by DTZ, is disseminated by ASC to the college sector.
ACTION: ASC
3. RECRUITMENT
3.1 Remuneration of Board membersDTZ advised in its report that the college sector undertake an independent review to investigate the remuneration for board members with the objective of maximising the quality and contribution of board members. The Working Group concluded that such a review was unnecessary as there was no consensus in the sector that this was a particular issue for board members. Also, the issue was examined in detail as part of the Executive's Review of Governance and Accountability, which reported in 2003, and it was agreed then that no change should be made. The Group did not consider there to have been any major changes in the relatively short period since that previous review which could lead to a different conclusion. The Group generally felt that the main issue was less about remuneration and more about the issue of 'feeling valued', and that other ways of demonstrating that college board members are valued should be pursued. Recommend that Board members should remain unremunerated. Recommend that further consideration is given, however, to improving other ways of rewarding and valuing Board members.
ACTION: Scottish Executive
3.2 Nominations committee Recommend that the Principal should not sit on the Nominations Committee.
ACTION: Scottish Executive, ASC
3.3 Organisations should offer more than one candidate for the Board to choose from Considered, but recommend no change. 'Good practice' however should be highlighted in ASC guidance.
ACTION: ASC
3.4 Retain student and staff representation at current level Recommend that the current level of student and staff representation (one academic staff, one support staff) remains unchanged [but see later recommendation on "Support for student Board members"]. Recommend that consideration be given to the development of a standard service level agreement for student sabbatical officers for those colleges that have them in order to establish a common understanding of the duties of a sabbatical officer.
ACTION: NUS Scotland, ASC
3.5 Tenure of Board members Recommend that the Funding Council, along with other stakeholders, continues to review the tenure of Board members, taking account of recent changes to policy on public appointments. This should take place alongside a comprehensive review, initiated by the Scottish Executive, aimed at simplifying Schedule 2 to the 1992 Act. Recommend that Boards be given more flexibility to appoint ordinary board members for a period less than four years.
ACTION: SFC, Scottish Executive, ASC, STUC, NUS Scotland
3.6 Recruitment to Boards The Association of Scotland's Colleges conducted on behalf of the Working Group a survey of colleges to profile the membership of college boards. A copy of the analysis is at Annex D. Recommend Boards, in making appointments, should take account of full the range of criteria expected (eg skills, experience, equality. diversity).
ACTION: Scottish Executive, SFC, ASC
3.7 Recruitment process Recommend no change to current ability of Boards to appoint their own members, or to the procedure for appointing the Chair.
4. INDUCTION
4.1 Board induction arrangements Recommend that good practice guidance be developed by the ASC as an integral element of a wider training and development framework.
ACTION: ASC
5. TRAINING AND DEVELOPMENT
5.1 Ongoing development of Board members Recommend development of a good practice framework by the ASC. Recommend that Chairs should have a role to review training needs of members. Recommend that SFC, working with other stakeholders and taking account of the success of SPARQS, develop a support mechanism for staff Board members building on, but avoiding duplication of, existing arrangements.
ACTION: SFC, working with ASC and STUC
6. BOARD STRUCTURE AND MEETINGS
6.1 Structure Recommend that Boards be encouraged to review their structures and processes to optimise impact of members, noting that the contribution of members is voluntary and limited.
ACTION: Scottish Executive, SFC, ASC
6.2 Size and composition Recommend no change to current size. Recommend no change to requirement that 50% should have a commercial/professional etc background, but that the Scottish Executive give Boards clarification of the potentially wide interpretation of that provision (eg that it can include local authority sector, charity and community sector, etc).
ACTION: Scottish Executive
6.3 Role of staff and student members Recommend that training arrangements should emphasise the role of student and staff members (ie full Board members with identical responsibilities to others).
ACTION: NUS Scotland, STUC, ASC
6.4 Training for staff Board members Recommend that all Boards should have a formal training programme for staff Board members, with a focus on core governance skills and behaviour.
ACTION: Scottish Executive, ASC, STUC
6.5 Restricted sessions at Board meetings Recommend that Boards should exclude members only in exceptional circumstances (consistent with the statement of Board member responsibilities). Recommend that guidance be issued on this issue.
ACTION: Scottish Executive
6.6 Encouragement of co-option Recommend that Boards be encouraged to make greater use of their ability to co-opt members to committees of the Board, including members of staff, with a view to improving succession planning, broadening representation, providing expertise and learning from other colleges.
ACTION: Scottish Executive
6.7 Information to Boards Recommend that Boards seek to ensure the enhancement of the quality of information presented to boards, taking account of relevant issues identified in DTZ's report.
ACTION: Scottish Executive
7. BOARD PERFORMANCE
7.1 Sharing good practice Recommend that ASC establishes a broad based 'community of practice'-style group for accountability and governance issues, tasked with the identification and sharing of good practice. [NOTE The STUC view is that the group should be established by the Scottish Executive rather than the ASC.]
ACTION: ASC
7.2 Poor performance Recommend that Boards should have in place arrangements for evaluating their own performance, including that of individual members, committees and the Chair.
ACTION: Scottish Executive, SFC, ASC
7.3 Academic quality Recommend that all Boards are closely involved in issues of academic quality, taking account of existing successful examples in other colleges and specifically in the approval and monitoring of quality assurance and improvement strategies.
ACTION: Scottish Executive
8. RISK MANAGEMENT
8.1 Good practice Recommend that good practice in risk management be disseminated by the ASC, also highlighting the key role of the audit committee and other specialist committees. [NOTE The STUC consider that dissemination should be undertaken by the SFC or Audit Scotland, rather than the ASC.]
ACTION: ASC
8.2 Risk registers Recommend that Boards be encouraged to use a separate risk register for each significant capital project. Registers should also be kept under regular review.
ACTION: ASC, SFC
9. FINANCIAL MANAGEMENT
9.1 Annual financial cycle In its report DTZ advised that colleges' current annual financial cycle should be changed to one based on three years. The Working Group considered this and concluded that this was not appropriate. This was mainly because such an arrangement would only provide a longer planning horizon for part of the three-year cycle and it could reduce flexibility to respond to changes in the total quantum of funding. Recommend no change in annual financial cycle.
9.2 Board member training Recommend that Board members receive appropriate financial training.
ACTION: ASC
9.3 Treatment of pension liabilities The DTZ report highlighted concerns about the impact of the treatment of pension liabilities arising from colleges' participation in local government pension schemes prior to incorporation in 1993, given these now appear to have been under-funded. Recommend that the Funding Council review the implications for colleges.
ACTION: SFC
10. ACCOUNTABILITY
10.1 Possible statutory designation of college Accountable Officers The Working Group considered the designation of college 'Accountable Officers'. The Group recognised that college principals could be called to give evidence before the Audit Committee whether or not they were statutory accountable officers and that the Financial Memorandum between the Scottish Funding Council and colleges and universities imposes responsibilities on chief executives that are analogous to those of 'Accountable Officers'. Given that statutory designation by the Principal Accountable Officer of the Scottish Executive or non-statutory designation by the Scottish Funding Council would interfere in decisions that should properly be taken by the college board of management (namely the appointment of the principal), the Group concluded that principals should not be designated as 'Accountable Officers'. This was considered appropriate and sufficient. The Group learned that since the establishment of the Scottish Parliament in 1999, 'Dear Accounting Officer letters' no longer apply in Scotland. Recommend no change to current arrangements.
10.2 Role of college Accountable Officers Recommend that SFC issues clarification on the role of "Accountable Officers".
ACTION: SFC
11. BOARD MEMBER ENGAGEMENT
11.1 Good practice Recommend good practice be disseminated to colleges by the ASC, drawing on DTZ research evidence and the ROSCO desk research. [NOTE The STUC consider that all stakeholders should be involved in dissemination, and not solely the ASC.]
11.2 Visibility of Board members To improve the connectedness and visibility of Board members to external and internal stakeholders, Recommend that visits, events and other communication opportunities should be employed.
ACTION: Scottish Executive, SFC, ASC
11.3 Awareness of staff and student views Recommend that events such as internal focus groups and conferences should involve Board member participation wherever appropriate.
ACTION: Scottish Executive, SFC, ASC
12. STUDENT REPRESENTATION ON BOARDS
12.1 Support for student Board member(s) Recommend that Boards be encouraged to consider the creation of sabbatical posts. Recommend that Boards be encouraged to invite a second student nominee to attend Board meetings to provide support to the existing student Board member. Recommend Boards approve dedicated administrative support to the student association and its President.
ACTION: Scottish Executive, NUS Scotland, SFC, ASC
12.2 Integration of student members: Acknowledging that student representatives have much shorter terms than other Board members, Recommend that Boards bring the student member up to speed with all relevant issues as soon as possible.
ACTION: Scottish Executive, NUS Scotland
13. STAFF GOVERNANCE STANDARD
13.1 Development of staff governance standard: Recommend that the issue be remitted to the Scottish Executive's Roundtable Forum.
ACTION: Scottish Executive