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Why is There Interest in Effectiveness?

Recent years have seen greater interest in the issue of governing body effectiveness - indeed this web site is one aspect of that. There are several reasons for this:

The impact of private sector failures in corporate governance, and the need for higher education to respond to reports such as Nolan, Cadbury and Turnbull.and to take account of the Corporate Governance Code (formerly the Combined Code)
The general growth of a concern about accountability and value for money in the use of public expenditure.
The approach of governments to 'modernise' the public sector, and the need for institutions to be seen to be responding to those policies.
The increase in competitive pressures on institutions (local, regional and global) leading to an increase in risk.
That the traditional distinction between academic and non-academic governance is breaking down, as more issues have resource or risk implications (including reputational risk) with a consequent increase in the work of the governing body.
in England the growing pressure from HEFCE to encourage more effective governance as a way of trying to reduce the accountability burden falling upon institutions, and debates on similar issues taking place elsewhere in the UK.

The CUC Guide recommends (page 17) that governing bodies should regularly monitor their own effectiveness, and a commitment to regular effectiveness reviews in included in the Code of Governance.

In England, HEFCE has now made it clear in Annex I to the Financial Memorandum that it expects governing bodies to undertake periodic reviews of their effectiveness, and to produce reports and action plans for improvement that are made public.

Although there have been relatively few governance failures in higher education, the occasional crises that have occurred in individual institutions have led to concerns and a growing awareness of the need for more effective governance.

Such developments are occurring not just in the UK, and enhancing governance in higher education is of international interest. In Australia a national framework for governance in higher education has been established and all institutions now comply with its provisions. There has even been discussion of an international standard for university governance proposed by the OECD. In the USA, tighter legal regulation on private sector boards was introduced in the Sarbanes-Oxley Act, and US universities are now taking steps to comply with the spirit of Sarbanes-Oxley provisions.

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