English Colleges' Code of Good Governance. Passionate: Professional: Prudent. Introduction and Part 1: Values and Principles
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1 English Colleges' Code of Good Governance Passionate: Professional: Prudent Introduction and Part 1: Values and Principles December 2014
2 Introduction Excellence in governance is at the heart of the English college sector, and will be critical as it continues to develop, diversify and innovate. We have consulted with a wide range of stakeholders to draw up this Code of Good Governance as a way of supporting college governors in developing and maintaining excellence. By adopting and implementing the Code, governing boards will publicly demonstrate their leadership and stewardship in relation to their own college, protect its reputation and that of the wider sector, and provide appropriate assurance to key stakeholders, including, students, staff, parents, partners, businesses, and society at large. The Code is written to support governance practice, which in turn will help colleges work successfully towards meeting their vision, mission and strategy. The Code needs to be read alongside the college s Instrument and Articles of Government and the relevant legal and regulatory requirements. You may also find it helpful to read the Department of Business and Innovation and Skills (BIS) Governance guide which sets out the regulatory and operational framework for general further education colleges. The purpose of the Code is to identify the key values, expectations commitments and principles of good and outstanding practice. Adopting the new Code is an opportunity to rethink and refresh approaches as the sector strives to be at the forefront of best practice in governance. It signals a willingness to enter into a new era of governance, with the energy and commitment to ensure the very highest standards for our stakeholders. Our approach to governance must be dynamic and pro-active. The Code should never be seen as a 'tick box' exercise, and governing boards are encouraged to adopt its 'spirit' as well as its 'letter'. This new version of the Code applies to both general further education colleges (GFECs) and sixth form colleges (SFCs), and the word colleges refers to both parts of the sector unless otherwise stated. The term board has been used throughout to cover all governing bodies and corporations. The Code is in two parts Part 1 Part 2 An initial statement of the core values and expectations that provide the context for the way in which college governance is conducted. A list of the 10 key governance principles that support the values and are vital to successful implementation. Detailed provisions and good practice examples for each of the principles, with hyperlinks to relevant legislative documentation and further support material held on the Governance section of AoC s website. 1
3 English Colleges Code of Good Governance Part 1: Values & Principles The Values of College Governance High-quality further education, which commands public confidence and promotes the reputation of individual colleges and the sector, must rest on a number of shared values. By implementing such values the governing board can: ensure quality education and training for its students; demonstrate public benefit; provide the basis for its own effectiveness; support college autonomy; support the sustainability of the service and enhance the reputation of the sector; and, by example, demonstrate 21 st Century leadership. A failure to adopt and implement a set of agreed values has implications beyond the college concerned, by potentially undermining the collective reputation of all colleges and the wider sector. In setting out core values, the Code adopts and builds on the 'Nolan Principles of Public Life', which provide an ethical framework for the personal behaviour of governors. They are: Selflessness Openness Objectivity Integrity Honesty Accountability Leadership In addition, given the specific nature of further education and its reliance on state funding, and in line with good practice, the Code also adopts the values and behaviours of: Respect Being passionate, professional and prudent The Code is based on the following expectations of good governance, which illustrate the values and beliefs of further education governors: Putting the student first; promoting high expectations and ambitions for students and staff. Ensuring inspirational teaching and learning. Providing strong leadership to both the senior team and the community the college serves. Setting the strategy and acting as guardians of the college s mission. Demonstrating accountability to students, parents, staff, partners, employers, funders and other stakeholders, including publishing accurate and timely information on performance. Listening to students, employers and staff. Ensuring the achievement of equality of opportunity and diversity throughout the college and implicit in initial access. Using the college s autonomy and independence to meet local education and skills needs. The Ten Principles of Good College Governance To implement and embed the above values and expectations in the college, governors and senior leaders will adopt the following key principles. 2
4 The governing board will: 1. Set the mission, vision and strategy including defining the ethos of the college. 2. Be collectively accountable for the business of the college taking all final decisions on all matters of fundamental concern. 3. Ensure there are effective underpinning systems to implement the strategy and, through constructive challenge, monitor its progress. 4. Ensure that the college is responsive to the relevant labour market by adopting a range of strategies for engaging with employers and other stakeholders that will support students progressing to relevant further study and/or successful employment. 5. Adopt a financial strategy and plans which are compatible with the duty to ensure sustainability and solvency of the college. It will adopt effective systems of control and risk management that promote value for money, efficient use of the capital estate and technology, meet mandatory audit requirements, and produce accurate and quality-assured college data. 6. Ensure that effective control and due diligence takes place in relation to subcontracting and partnership activity - including setting up of academies - and ensure systems of delegation and accountability are in place. 7. Foster exceptional teaching and learning and financial management by using best practice when selecting and recruiting the senior leadership team, and following up through staff development and rigorous and effective performance management. 8. Meet and aim to exceed its statutory responsibilities for equality and diversity. 9. Ensure that there are organised and clear governance and management structures, with well-understood delegations and authorities and governors are capable, knowledgeable and supported. 10. Regularly review performance and effectiveness. Use of must and should This document uses the normal convention for codes, which is where areas of activity are covered by statute or are the minimum expected by the Principal Regulators and funding bodies and deemed as musts. Where demonstrating or exceeding expectations and having adopted enhanced governance practices, these actions are described as should. Adoption The funding agencies will continue to state that adoption of the English Colleges Code of Good Governance or having due regard to the UK Corporate Governance Code is a condition of grant. However, their preference would be for colleges to adopt the new English Colleges Code of Good Governance. 3
5 Reporting Recognising the multiplicity and autonomy of the sector, governing boards are free to achieve the expectations of the must and should statements in whatever manner they see fit. Reporting on the adoption of the Code is a valuable source of assurance to stakeholders - a description of how this Code is implemented and published by the governing board, is a crucial part of its adoption. It is a comply-or-explain code. Colleges prepare financial statements in line with UK accounting standards which, from 2015 onwards, will be compatible with international financial reporting standards. The standards that apply to colleges are summarised in the Further and Higher Education Statement of Recommended Accounting Practice (FE/HE SORP) in addition to which there is an accounts direction published jointly by the funding agencies. These require colleges to prepare a statement of corporate governance and internal control. This Code will help colleges meet their obligations under the accounting standards but, more importantly, the financial statements are a good place for governing bodies to explain annually how they meet high standards. Where a governing board has adopted the Code but for good reason does not comply with particular provisions within it, it should explain its rationale. This code has been designed to be applicable to all colleges and it does recognise that some foundation colleges have their mission set by their trustees, and their instrument and articles of governance reflects that relationship. Therefore it is acknowledged that some parts of this code will need to be addressed in a different way. However by adopting the code there is an expectation that this difference will be explained in the annual report. Adoption of the code should not limit innovation. Review Period As governance is in a period of substantial change, this Code itself will be reviewed regularly to ensure that it remains fit for purpose; this will take place, normally, every three years. However, if significant legislative and/or regulatory change occurs, this will automatically trigger a review by AoC s Governors Council. 4
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