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Introduction and aim
A core responsibility of governors is to examine and agree the institution’s strategic plan. Normally, the head of institution will bring forward a draft strategic plan for consideration, discussion and subsequent approval by the governing body. However, the actual way a governing body discharges its responsibilities to approve a strategy plan can vary hugely. This briefing note explores these questions.
Strategy and strategic plans
Strategy stems from the need to make choices. No institution, regardless of size or success, can do everything: it needs to choose. Choosing the institution’s strategy is about making the right choices to enable the institution to succeed. A strategic plan documents the strategy, and should indicate where the institution is going to focus its efforts, and conversely indicate those areas it is not going to give high attention. These choices lead to actions and resource commitments.
Why a review strategy?
There is need for a periodic review of the institution’s strategy, as faced with a constantly evolving operating environment even the most successful strategy will become redundant in time. As one commentator has noted ‘there is simply no one perfect strategy that will last for all time’.1
Making the strategic plan fit the institution
Within the higher education sector institutions occupy different ‘trading’ spaces. The choice of strategy must reflect what they are trying to achieve (goals) and their capacity and capabilities (resources). Successful strategies are not formulaic, and those which likely to be successful need to be crafted to fit a given organisational setting and set of circumstances. These have been characterised as requiring a mixture of insight and imagination, of deduction and inductive thinking. An institution’s strategic plan must not reflect the approach of the lowest common denominator in order to be agreed. Strategy is about choice and both the chair of the governing body and the head of the institution must ensure that the choices being made are clearly identified and in the best interests of the institution.
There is no single accepted way to develop an appropriate strategy for institutions operating in the higher education sector.
The Committee of University Chairs (CUC) and Scottish Codes of Practice expect the governing body to approve the institution’s strategic plan:
‘The strategic plan plays a crucial role in ensuring the successful performance of the institution, and the governing body will want to demonstrate its commitment and support for the plan by formally approving or endorsing it in accordance with its constitution. Aligned to this, it must ensure there is an appropriate financial strategy and be responsible, without delegation, for the approval of the annual budget.’2
‘The governing body should be involved in the development and approval of the strategic plan…’3
Mission and education character
For institutions established under the Further and Higher Education Act 1992 (generally referred to as post-92 institutions) a requirement of the governing body is ‘the determination of the educational character and mission of the University...’
Unfortunately nowhere in the 1992 Act, or subsequently, has education character been defined. In practice it might, for example, be considered to encompass what kind of higher education is offered, the characteristics of the students’ intake, the learning environment provided and the research undertaken. By contrast, mission is often interpreted to mean the institution’s purpose and reason for existence.
In practice although the mission is often seen as an important element of a strategy its does not offer guidance on the development or execution of strategic actions.
The role of the head of the institution
The expectation is that the head of the institution working with the executive team will bring forward to governors a draft strategic plan for consideration and comment. The draft should draw on the deep understanding the executive team has of the institution and higher education sector and reflect the opportunities and challenges it faces. Governors should not expect to be involved in preparing the draft.
Deciding on a process
If governors are to engage in an informed and objective dialogue around the development and approval of the institution’s strategic plan, then the chair of the governing body and the head of the institution need to agree how this can be best achieved. This may mean jointly agreeing a process and associated time-line that enables a draft strategy plan to be discussed, modified and reconsidered, prior to its approval by the governing body.
Creating a culture for dialogue
For the process of developing the strategy to be one where governors feel able to question and challenge a draft strategic plan, there needs to be a culture of openness and mutual trust between the governing body and the executive team. This enables ideas to be shared and openly validated. The aim should be to avoid a process of ‘sell and defend’. In other words, the head of institution and executive team should not put forward a strategy that they feel obliged to defend in the face of questioning and examination by governors. If such an outcome is to be avoided the chair of the governing body and the head of institution need to work together to set an appropriate ‘tone’ to enable meaningful discussions to take place.
The process in practice
The mechanisms used by institutions when developing and approving a strategic plan vary. Strategy away days are often used to discuss and assist in the development of a strategic plan. Alternatively, some universities use a committee of the governing body or joint committee with senate (eg strategic development committee) as the way of consulting and commenting in detail on a draft strategy, prior to the strategy being placed before the full governing body for its consideration.
The use of mechanisms outside the regular cycle of governing body meetings reflects the limited number of scheduled meetings, and that normally the agenda for any regular meeting makes it difficult to give sufficient time to examine a proposed strategic plan in detail.
How much influence do governors exercise?
In practice, the influence of governors in the development of a strategy plan varies. Normally, if a governing body has a high level confidence in the head of institution and the executive team and the institution’s performance is judged to be satisfactory or better, then governors are likely to be largely supportive of any plan brought forward. Conversely, if governors have lower levels of confidence in the executive team or the institution’s performance is weak, any proposed plan is likely to be subjected to greater scrutiny.
Distinguishing good from bad strategy
How does a governor decide whether what is placed before them constitutes a good or bad strategy, and accordingly supported or strongly challenged? One writer has suggested a way of distinguishing between a good and bad strategy.4
Typically, a bad strategy is characterised as having little or no substance and fails to recognise the challenges facing the organisation. It can mistake goals for strategy (eg describes ends, but no means) and has too many objectives (lacks choice).
By contrast, a good strategy is characterised as offering a way forward (addresses the challenges faced), has a clear focus (one or two pivotal objectives), has a coherent set to actions (allows resources and actions to be clearly aligned) and is easy to explain and communicate (simple to understand and share).
Approving the strategic plan
Governors need to assure themselves that any proposed strategy is fit-for-purpose. For this to be achieved governors need to have an understanding of the institution and the sector and be able to make an objective assessment of the challenges and opportunities faced by the institution. In signing-off a strategic plan governors should feel secure that it addresses the key needs and opportunities and offers a sustainable basis for the institution to operate and prosper over the longer term.
Sustainability is about ensuring that the institution operates today in ways that do not undermine its ability to operate tomorrow. Resources should be managed in such a way that current capabilities and capacities are at least maintained into the future and the organisation is able to respond effectively to any likely challenges.
What can go wrong?
Failure to undertake a timely review of strategy and adapt to a changing operating environment, risks more serious action being required at some point in the future. If effective action is delayed for too long the situation is likely to deteriorate and potentially threaten the institution’s survival: ‘a turnaround is a transformation tragically delayed; an expense substitute for a well-timed adaptation.’ 5
To avoid a crisis it is important that any periodic review of the strategy is thorough. Evidence from institutional failures to date suggests that these arise when governors do not ensure that a comprehensive review of an institution’s strategy takes place. The opportunity to address and adapt in a timely manner to emerging challenges is therefore lost. As a consequence, problems build over time, until they reach a point when they cannot be denied any longer and drastic action is necessary.
How often should a strategic plan be reviewed?
Governors should thoroughly review – as opposed to taking a superficial assessment of – an institution’s strategic plan on a regular basis. This does not necessarily need to happen every year, but should as a general rule-of-thumb take place at least every two or three years. Governors should also ensure that they receive regular (at least annually) updates on progress between the full reviews.
In practice, the actual length of the time between full reviews will depend on a range of factors, not least, for example, whether the external operating environment is subject to rapid change (external factors) or institutional performance.
Questions to consider
End notes and further reading
Associate Director, Governance
Aaron Porter was appointed as Associate Director, Governance at the Leadership Foundation (LF) in January 2014. He is also a higher education consultant and a freelance journalist, having previously been president of the National Union of Students (NUS) in 2010 – 2011. He is also an associate for the LF and the Higher Education Academy (HEA), on the advisory network for the Office for Fair Access (OFFA) and CFE research and consultancy alongside a number of other portfolio roles.
During his high profile term at NUS, he was the first NUS President to be invited as an observer to the board of the Higher Education Funding Council for England (Hefce) and to address the annual Universities UK Conference in September 2010. In addition he served as a non-executive director on the boards of UCAS, the HEA and Endsleigh Insurance. He also co-chaired the Beer/Porter Student Charter group which reported to Higher Education Minister David Willetts in January 2011, and was a member of the Hefce Online Learning Taskforce and the review of External Examiners chaired by Dame Janet Finch both conducted in 2010/11.
Previous to his term as NUS President, Aaron served two successful terms as NUS Vice-President (Higher Education), helping to build NUS’ reputation with the sector. He also served as a non-executive board member for the Office of the Independent Adjudicator (OIA) and on the board of the European Students’ Union (ESU). He was also a member of the Burgess Implementation Steering Group and the National Student Survey Steering Group. In 2009, he was part of the UK delegation to the European higher education ministerial summit in Leuven, Belgium.
Aaron studied BA English at the University of Leicester and graduated in 2006. He then spent two years as a sabbatical and trustee of the students’ union, he was also the founding chair of Unions94 (the students’ unions of the 1994 Group). As a student he was editor of the student newspaper, ‘The Ripple’.
Governance Web Editor
David Williams is Governance Editor for the LF website. He has over 25 years experience of working in higher education, as both as an academic and senior manager. During this time he has worked closely with governing bodies, contributing to, and supporting their work
in a variety of ways.
As Governance Editor, David works with the wider LF community and its members to ensure the governance website offers a repository of information and signposts recent developments in the field on governance.