Agendas (including the risk and rewards of a Consent Agenda)
Creating a successful board or committee meeting agenda that adds value requires careful planning, organisation, and communication. The goal is to ensure that the board members are well-informed, engaged, fulfil their fiduciary duties, and can make meaningful contributions to the organisation.
A Guidance Note with a step by step guide to drawing up an impactful agenda, including a template example, is available to download below.
Probably the most common complaint by college governors, is that their board and committee packs are too long and too internally or backward focused. The most common complaint by senior college leaders, is that their governing body is too operational. Whilst it might not appear that these two complaints have much in common, actually they are very closely linked.
Writing board papers and reports is a skill, and one that it would seem, is not very often taught. The tendency for management when producing board papers to use a report or at least very similar material as they have previously used when discussing the topic at a senior management team meeting, is all too common. Such material is most likely to be of an operational nature. It follows then that if operational information is being presented to governors, they are going to have an operational conversation. If a strategic conversation is required, then strategic material must be presented.
Governors require high-quality information on how the college is performing in order to have meaningful discussions and take appropriate decisions. Of course high quality information is no guarantee for good board performance, but it should reduce the risk of poor decision-making. Without such information, the board runs the risk of failing to discharge its responsibilities effectively. This will ultimately result in poor decision-making and, at worst, increased liability for governors and senior leaders.
The Governance Professional plays a key role as the 'gate-keeper' of the information flow to the board, and as such, is ideally placed to support both the board and senior leaders in the flow of relevant, timely and focused reporting and communication. As a result of improved reporting, the board gains time to focus on what really matters, senior leaders gain time from writing shorter reports (and the satisfaction from knowing they are more likely to be read), governors save preparation time as there is less reading, the Governance Professional saves time as there is less collating, reviews and revisions to be undertaken, and overall the student will gain from improved governance as a result of more efficient and effective processes.
Board Reporting - guidance note
A Guidance Note on effective and efficient board reporting, including a report template, is available to download below.
Board Reporting Assessment Tool
How effective are your board papers? Using the download tool below, select your answers and follow the guidance to calculate your score. Designed and delivered by Board Intelligence and The Chartered Governance Institute, this assessment can support improvements in board reporting.
The Essential CEO Report
According to board members, the CEO report is the most important document in the board pack and it’s their go-to document. However, many institutions struggle with it and very few do it in a way that maximises impact. Some CEOs want to communicate with their board outside of meetings too, but are unsure of what the format of such a communication should be. Below is a guidance note and template on what makes a good CEO report.
Governing Body Work Plan (Cycle of Business)
How the board plans its work will depend to some extent on both its structure and how it wants to split its meeting time between performance and conformance. However, key to the success of a college and its sustainability, is the requirement for governors to be forward thinking. There is a strong continuing bias toward fiduciary tasks, as well as focusing on past performance. Effective boards have sought to shift their focus. Boards need to look further out than anyone else in the organisation.
Distracted by the details of compliance and regulations however, there is a risk that governors simply don’t know enough about the key purpose and long-term strategies of their college to improve performance and avoid trouble. It doesn’t have to be this way. Rather, governors should engage in strategic discussions, form independent opinions, and work closely with the senior leadership team to make sure long-term goals are well formulated and subsequently met.
In planning your board's yearly work, start with the college's strategic objectives and decide what information the board needs to receive in order to be assured that the targets for educational and financial performance are being met, and that strategic objectives are on target, or what actions are being taken to bring them back on target. This will involve considering risk and policy implementation in order to propel forward college improvements through implementation of agreed strategy, vision and culture.
Secondly, ensure there is enough time in every meeting to consider strategy. Boards should be asking themselves regularly, "Has the board devoted significant time (at more than one meeting) and thought to long-term strategic issues and their achievement?", "What has the board worked on today that will add value in three to five years?"
Thirdly, add in governance and compliance to ensure the board is working optimally and statutory duties are being met.
Lastly, the board needs to agree what information it will receive at the board meetings, and what can legitimately be shared through other means. For some, it will be only those items that are ripe for decision, (other than statutory items) that will appear on the Board agenda.
Minutes - guidance note
Taking minutes is a skill and an art. Minutes form part of the legal record and corporate memory of the organisation and should be retained indefinitely. While an enduring record of its deliberations is primarily for the benefit of the board itself, minutes are also increasingly important to third parties. For example, when minutes are described as ‘a letter to a judge’ it acknowledges their importance in special inquiries or litigation when board decisions (or a lack of them) are under the microscope. Minutes are a significant component in a ‘paper trail’ that can help prove, for example to regulators, that proper authority was exercised, and correct procedure was followed. Organisations must report on Third Party related transactions and conflicts of interest. Minutes should demonstrated the full disclosure of the actual or potential conflict and the extent to which a potentially conflicted board member is involved, if at all, in the decision making process.
A Guidance Note on minutes is available to download below.
Action Plan - template
Just as recording the content of the meeting is important, so is the recording of any actions flowing from the meeting. If the participants leave the meeting and no one is accountable for taking action on the decisions that were made, then the meeting will have been a waste of everyone's time. Actions should always form an agenda item at the next meeting. It is the governance professional's responsibility after the meeting, to inform people of their actions, to track the completion of them and record such for the next meeting.
A template action plan is available for download below.
High attendance is a key component of effective governance. Poor attendance has been found to be a contributory factor in corporate failures. High attendance brings increased diversity of thought, support and challenge.
The Board is expected, along with the senior management team, to set the tone of the culture for the college. With student attendance being so fundamental to student outcomes and college success, it is hard to see how any governor with irregular attendance, could remain in post. Formal proceedings, as laid out in the I&As, can be implemented should a governor miss meetings for a minimum of 6 months, but ideally the issue would be addressed before it gets to that point. The FE Commissioner, in a report on Darlington College following its receipt of an inadequate Ofsted grade, states: 'attendance at meetings has generally been poor'.
Under Article 8, the Corporation is required to have a written statement of its policy regarding attendance at
committee meetings by persons who are not committee members, and publish such on its website. When considering whether to let non-members attend corporation meetings as observers, it is worth considering such matters as confidentiality and any possible impact on the quality of discussion. Corporation members should be able to attend any committee meeting as observers, with participation being at the invitation of the Chair.
Attendance record annual register
A governor attendance record annual register is available for download below.
Declarations of Interest
Governors and members of senior management are required to complete and sign Declarations
of Interests on an annual basis. The Governance Professional has a key role to play in ensuring that the conduct of the business of the Board, and of individual members, accords with the high standards expected of those in public office, and, in particular, maintaining a register of interests and presenting an annual report to the Board detailing the interests of all board and senior management team members. Members should be given the opportunity at each meeting to declare their interests. The Governance Professional maintains a register of disclosed interests of all members, which is available for inspection by the public.
Governors have a responsibility to declare their interests. Any members with a financial interest in the supply of work or goods to or for the purposes of the College, any contract or proposed contract concerning the College or any other matter relating to the College and being considered by or relevant to the operation of the committee of which he/she is a member, should ensure that:
- The nature and extent of the interest is disclosed to the Board; and
- If present at a meeting at which such supply, contract or other matter is to be considered, he/she shall not take part in the consideration or vote on any question with respect to it. In such circumstances, the member shall not be counted in the quorum present at the meeting and shall not be entitled to vote on the matter.
Members should also ensure that any relevant interest is declared – not necessarily a financial interest, for example, membership of an outside body – in any issue raised and make clear the nature and extent of the interest.
Governors, as Trustees, must take account of the requirements of the Charity Commission. The commission has clear guidance - Conflicts of interest: a guide for charity trustees (CC29)
Trustees must make their decisions only in the best interests of the charity. This means that they must
consider the issue of the conflict of interest so that any potential effect on decision making is eliminated.
How they do this will depend on the circumstances. In cases of serious conflicts of interest it may mean the trustees deciding to remove the conflict by:
- not pursuing a course of action
- proceeding with the issue in a different way so that a conflict of interest does not arise
- not appointing a particular trustee or securing a trustee resignation
When considering potential conflicts, reference to the Nolan Principles of Public Life, including openness and transparency, should be of utmost importance.
Declaration of interest and eligibility and Register of interest templates
A declaration of interest and eligibility template and a register of collated interests are available for download below:
Related Party Transactions
Related parties are defined by HEFE SORP and there is a requirement to disclose close family on the related party form, even when there are no transactions between the individual and the College. This is to ensure that the College finance team are able to identify potential related party transactions before they occur and to assist the auditors to fulfil their responsibilities under International Standards on Auditing. These standards state:
The auditor shall inquire of management regarding:
(a) The identity of the entity’s related parties, including changes from the prior period; (Ref: Para. A11–A14)
(b) The nature of the relationships between the entity and these related parties;…
(c) Whether the entity entered into any transactions with these related parties during the period and, if so, the type and purpose of the transactions.
Therefore, this information must be supplied to the auditors to enable them to comply with the International Standards on Auditing. A template form is available for download below.
Some of the common types of questions that Governors and key management may raise in response to the requirement to declare their close family on related party declaration forms are as follows:
How wide is the disclosure requirement? What level of detail needs to be documented?
This information needs to include details of the Member/Trustee/Governor, the natural persons connected to them (i.e. wider family such as spouse, parents, grandparents, children, siblings and in laws); and any connected entities of any of these persons where there is a substantial interest or substantial influence. So names are required in full plus names of the business interest and why they have significant influence – e.g. Directorship, sole trader business.
What details need to be disclosed for each individual?
Full name, relationship to Member/Trustee/Governor and any significant business interests
Where does this information get reported? Internally?
Yes, on a central register accessible by all in the leadership and finance team that need to know.
What constitutes a business interest?
Ultimately the individual would have significant influence so likely a majority shareholding, a Directorship, or control through other parties such as holding companies.
What if I don’t know the details of relevant business interests of close family members?
There may be occasions where the Member/Trustee is not in possession of full details. They should disclose everything they could reasonably be expected to be aware of.
What about GDPR? Do they have to tell us?
With regard to the basis for processing by the auditor of the personal data contained in the related parties information, the auditor is required to conduct their audit in accordance with relevant auditing standards by s4 of The Statutory Auditors and Third Country Auditors Regulations 2016 (SI 2016/649). The data is therefore processed to comply with a legal obligation in accordance with article 6(1)(c) of the General Data Protection Regulation. Such processing does not require the consent of the data subject. Please see the attached pdf information document for further details about data protection.
With the announcement from ONS of a reclassification of the FE sector to being public sector organisations in November 2022, it is highly likely that the regulations around related parties and disclosure to the ESFA of transactions will become greater as it has for other sectors such as academies.
IT in the Boardroom
The use of technology in the boardroom has grown significantly in recent times, none more so than the use of video-conferencing in the Covid-19 crisis.
Traditionally, board papers and board communication have been paper-based. However, with the introduction of board portals and meeting software, more controlled and efficient environments now exist. Allowing governors to quickly and securely access documents and electronically collaborate with board members and senior executives, such software not only supports the secure exchange of information within a meeting, but has the ability to significantly improve communication and decision-making, as well as increasing productivity and reducing paperwork.
Meeting software often provide document libraries which give instant access to all required documents, and additional assets that may help governors make informed decisions. It also gives an accurate and secure source of information. Governance Professionals and senior leaders can reduce the time, effort and cost required to produce board papers and securely deliver them on time with high-level encryption.
Video conferencing facilities have also improved, with better security and accessibility, providing a suitable alternative to face to face meetings.
Virtual Meetings and security considerations
Due to Covid-19, governing body meetings have been taking place virtually, and many boards may continue to meet this way post-Covid-19. This has many implications for the Board as it operates. The AOC have provided a report on Governing a College Using Virtual Meetings. It is essential therefore, that sensitive documents, information and communications are protected and available only to the audience for which they are intended.
This practice of operating virtually is new to many and this brings risks if security procedures are not properly implemented by those often operating outside the security arena of the college.
This downloadable guidance note identifies some considerations and actions that should take place as part of the move towards the virtual boardroom.
Board Intelligence have published their findings into how Boards plan to operate following Covid-19. Their research with chairs, chief executives, and governance professionals shows an appetite for change, and a desire to adopt a “hybrid” board model combining the best of on-site and remote working. With a mindset shift and new processes, this “hybrid” model can deliver both convenience and a higher-performing board. Without this, your organisation risks being outpaced. So, what does this new approach look like? And how do you know if your board is ready for the change? Read the spotlight report at the link below.