Hepi report: pay for university governors could improve diversity

The English sector should consider whether paying university governors could help improve diversity and performance on boards, according to a paper that suggests the move would cost at least £12 million across all institutions.

Alison Wheaton, former chief executive of for-profit higher education institution GSM London, now a doctoral student at the UCL Institute of Education, makes the argument in a report published by the Higher Education Policy Institute on 11 July.

At a time of media and political anger over vice-chancellors’ pay, universities may feel nervous about the idea of extending payments to governors.

Ms Wheaton told Times Higher Education that the report is a “discussion paper rather than a firm, ‘this is what must be done’.” 

She added that “pay is just part of a wider array of practices around governing body engagement which I think are worth consideration”. University governance needs to “become more professionalised”, she said, and there should be more consideration of what its purpose is – a question that is the subject of her thesis.

Ms Wheaton said that consideration of the “issues and debates” on governance “should be supported at a sector level”.

The Committee of University Chairs is currently reviewing the Higher Education Code of Governance and closed a consultation earlier this year. One of the questions asked was whether the CUC should revise its current guidance on payment, which is to not remunerate external members of governing bodies.

At present, seven English universities “historically in receipt” of direct public funding pay their chairs of governing bodies, says Ms Wheaton’s paper. It adds that Scotland’s 2016 higher education legislation requires institutions to start processes to elect their chairs and to pay, at the request of the chair, “a level agreed by the governing body”, with two universities already doing so.

“Those who see universities as increasingly influenced by private sector concerns, such as the need to develop greater commercial acumen in order to achieve financial sustainability, are more open to the idea of paying at least some of their trustee directors,” writes Ms Wheaton.

The vast majority of universities are charities, but Charity Commission guidance on trustee pay has “softened”, she adds.

Existing literature on whether university governors should be paid identifies “potential benefits” such as “aiding recruitment”, “redressing diversity deficiencies” and “improving governing body effectiveness”, Ms Wheaton says.

Paying governors could extend the recruitment pool beyond those who are retired or have “the financial means” to volunteer a large amount of time for free, she suggests, while payment might also open up scope for training of governors.

“Paying governors might send a signal that universities are more serious about governance,” she adds.

Ms Wheaton says that if all 132 institutions in receipt of direct public funds paid their chair £20,000 a year, this would cost the sector £2.6 million.

She adds “It could cost the sector upwards of £12 million a year to pay all governing body members at levels similar to those currently doing so. Not all governing body members would necessarily accept remuneration.”

Ms Wheaton says that the CUC, Universities UK and GuildHE “should establish a joint working group to review sectorwide institutional governance arrangements, particularly with regard to governing body diversity and consider the potential impact of paying governing body members on diversity as well as other potential benefits and drawbacks”.

john.morgan@timeshighereducation.com