The draft CUC Code of Governance arrives at a moment when the pressures on higher education institutions are both acute and structural, making effective planning increasingly challenging. In this context, the draft CUC Code represents a shift in emphasis which moves from governance as a framework for oversight to governance as a driver of institutional performance and strategy delivery.
Several changes in the draft Code point in this direction. There is a stronger and more explicit focus on long-term sustainability and resilience, reflecting the reality that many institutions are navigating long-term financial and operational pressures. Alongside this sits a clearer expectation that governing bodies are actively engaged in shaping strategy and assuring its delivery, not simply approving it. The code also increases attention on assurance and the behaviours which enable governing bodies to bring their skills and experience to bear on institutional strategic success.
So what does this mean for universities?
Taken together, these aspects raise the bar for governance in practice. They imply a governing body that is more curious, more challenging, and more forward-looking. They also place a spotlight on the quality of the strategic processes (strategic planning, risk management, performance evaluation) and their role enabling assurance.
From a strategic planning perspective, this is where the real strength of the new code lies. In connecting strategy development, delivery and end to end indicators of strategic success, the draft code implicitly challenges institutions to move beyond strategies that are aspirational but insufficiently grounded. In effect it endorses asking: is our strategy genuinely credible? Is it deliverable within our organisational constraints? Have you tested it and do we know what success looks like?
The draft Code also reinforces the idea that strategy cannot be separated from questions of management culture, risk appetite and financial sustainability. For governing bodies, this means engaging more deeply with how the institution is delivering its strategy and how it is continually evaluating its performance against the plan. Much in the code will strengthen strategy delivery as an ongoing strategic conversation blending quantitative and qualitative performance measures.
However, in seeking to strengthen assurance, institutions could fall into the trap of providing governing bodies with more data, but not more insight. There is a real opportunity for institutions to better curate reporting to focus on the questions that matter most.
So how can institutions respond?
The draft code is a positive change to the governance conversation and institutions will need to take a more integrated approach. But the new code is also a call for better connectivity between strategic planning and governance and there are some actions universities will need to take to meet the needs of Boards which take on the challenge if being more strategic, curious and more forward-looking.
Here are four practical steps that can help Directors of Governance connect with Directors of Strategic planning and get ahead of their Board:
- First, revisit how you are managing the interface between governance and strategy. To what extent is the governing body shaping strategic direction, rather than simply endorsing it? This may require earlier and more iterative engagement in strategy development, a greater emphasis on discussion rather than presentation and greater depth in how strategy is developed.
- Second, formally stress-test your current strategy, looking at scenarios as well as financials and building connections with risk management with your senior leadership team. How robust is the strategy under different scenarios? Where are the key delivery risks? What trade-offs are implicit, and are they understood and owned at governing body level? What options could you choose to pursue?
- Reset the focus of governing body agendas. Review how you can make time for robust forward-looking discussions on scenario analysis, emerging risks, strategic choices, which may require a conscious shift away from retrospective reporting. It may also require a different structure promote exchange of ideas rather than Q&A on papers. This is as much about discipline and style of debate as it is about design.
- Finally, consider governance effectiveness through a strategic lens. How do the skills and experience of the governing body support the institution’s future direction? Are committee structures enabling clear accountability and decision-making, or creating duplication and fragmentation?
The draft CUC Code provides a timely prompt for reflection. At its best, it can support institutions to strengthen the quality of their strategic thinking. But the real test will not be whether institutions can demonstrate compliance, but whether and how they use the Code to co-create strategies that are as credible as they are ambitious. The gauntlet has been laid down to institutions – make the most of the Board, enable them to be more embedded in strategic conversation and learn the lessons from recent governance failures.
With expertise covering governance, strategy development and strategic planning processes the team at SUMS Consulting would be happy to help in supporting conversations further. If you wish to discuss these topics further or need any additional information, please contact our consulting team on consulting@sums.ac.uk.
