An area which many institutions find difficult is that commercial ventures generally require a commercial structure, with substantial freedom to operate. The governing body (or its finance committee) will, however, expect to see a thorough investment appraisal and business plans, and regular performance data, and will expect the finance director to oversee such activities carefully.
Higher education institutions in the UK are charitable, and as the generation of commercial income may not be compatible with this charitable status, many institutions have established trading companies. In some cases there may be a holding company with subsidiaries. Some specific ventures are best managed through subsidiary companies (and there is guidance on this from HEFCE). It is important that the relationship between the institution and any such companies is clear, and that they have sufficient independence to operate commercially. There may be issues, such as conflicts of interest, for governing bodies if members serve on the boards of subsidiary companies.
Some institutions may also have separate foundation trusts which may be used for fund-raising campaigns.
The governing bodies of some institutions have established specialist committees to monitor the development of commercial work. Such committees may need to have specialist expertise not already on the governing body. It is important that the role and remit of such committees, and any delegated powers, is clear.
It is also usual for there to be strong management oversight of commercial work by the executive. Some institutions give overall responsibility to a pro vice-chancellor (or equivalent officer), and many have established business development or enterprise functions, with appropriately qualified and experienced staff.
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