Leadership Foundation

Increasing focus

The increasing focus on governor diversity in Higher Education

Since 2013, there has been increased focus and actions to improve the diversity of governing bodies by the governments of the UK, Higher Education funding councils, the Committee of University Chairs, Equality Challenge Unit, GuildHE, the Leadership Foundation for Higher Education and Universities UK.

The Higher Education codes of governance, to which ‘publically’ funded institutions are normally expected to comply, together with the policies of the different funding councils, has given additional impetus to the need for governing bodies to review and consider their own diversity. The expectations of greater diversity amongst the membership of Higher Education governing bodies has also been influenced by concerns and actions to improve the diversity on corporate boards.

The Higher Education Code of Governance
Element 6 of the Code requires that ‘the governing body must also routinely reflect on its own composition and consider taking steps to ensure that it reflects societal norms and values.’

To meet this element, it states that a governing body should consider:

• Requiring its committees to explain within their annual reports, how decisions have taken account of the institution’s E&D policy.
• Setting itself targets in terms of its own membership.
• Advertising vacancies locally and nationally, including in local ethnic-minority publications, and via social media.
• Using alumni, particularly as they may give access to a more diverse and younger pool of potential applicants.
• Drawing on search consultancies who can sometimes access a broader pool.
• Building a diverse pool for the future by providing training for potential governors, appointing them to sub-committees to gain experience, and providing other opportunities for their participation in board-related events.

Scottish Code of Good HE Governance
Principle 9 requires governing bodies to establish goals and policies on the balance of their independent members in terms of equality and diversity, and regularly review their performance. Scottish institutions are required to comply with the code as a condition of funding.

In 2015, the Chairs of Scottish HEIs publicly committed to a target of a minimum of 40% of both men and women lay directors on their governing bodies and to a review of progress in 2018. Although it extends only to external directors, the Chairs have asked students and staff in their institutions, who elect representatives to the governing bodies, to make a similar commitment.

Funding Councils

• In England, Hefce has set a target in its 2015-2020 Business Plan to achieve 40%-60% men or women on governing bodies by 2020.  Hefce suggests that governing bodies meeting the target are ‘gender balanced’.
• In Wales, the Higher Education Funding Council for Wales (HEFCW) includes governance diversity within its Memorandum of Assurance and Accountability. It asks institutions to be proactive when recruiting new governor in targeting under-represented groups.
• In Scotland, the SFC asks institutions to respond within their outcome agreements to the Scottish Code of Good HE Governance, which includes diversity requirements.

UK Corporate boards
The question of whether corporate boards lack effectiveness due to their limited diversity is very much a live issue. Ahead of becoming Prime Minister, Theresa May said  "The people who run big businesses are supposed to be accountable in practice to outsiders, to non-executive directors, who are supposed to ask the difficult questions, think about the long-term and defend the interests of shareholders."

Theresa May also remarked  "In practice, they are drawn from the same narrow social and professional circles as the executive team and – as we have seen time and time again – the scrutiny they provide is just not good enough." Source: Financial Times, 21 July 2016.

The Prime Minister is clearly not satisfied that companies have taken sufficient action to ensure their boards are sufficiently diverse to be effective.

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