Guidance on Corporate Governance

1 Preamble

This document covers policies and procedures relating to corporate governance in the University of Bath. The document should be read in conjunction with the Committee of University Chairs (CUC) Higher Education Code of Governance (December 2014) and with the following University publications:

  • Charter and Statute
  • Ordinances
  • Financial Regulations and Procedures
  • Standing Orders of Council

2 Governance Structure

The University was established in 1966 by Royal Charter. Its governance structure is laid down in the Charter and Statutes which can only be amended by the Privy Council. The Council is the governing body of the University. The primary responsibilities of Council are:

  • approving the mission and strategic vision of the institution, long-term business plans, key performance indicators (KPIs) and annual budgets, and ensuring these meet the interests of stakeholders;
  • appointing the head of the institution as chief executive of the institution and putting in place suitable arrangements for monitoring his or her performance;
  • ensuring the establishment and monitoring of systems of control and accountability, including financial and operational controls and risk assessment, and clear procedures for handling internal grievances and for managing conflicts of interest;
  • monitoring institutional performance against plans and approved KPIs, which should be, where possible and appropriate, benchmarked against other institutions.

Subject to the statutory powers of Senate with respect to academic matters, Council has general responsibility for the conduct of all the University’s affairs. Council has a majority of lay members who are neither staff nor students of the University. The membership and functions of the University Council are laid down in Sections 16 and 17 of the University Statutes. The Senate is responsible for regulating and directing the academic work of the University and is regarded as the supreme authority on purely academic matters. Decisions of Senate on academic matters which have financial or other resource implications are subject to approval by Council. Conversely, decisions by Council which have academic implications (for example the creation or closure of an academic department) are subject to consultation with Senate. The Court is the formal body representing the interests of the University’s internal and external constituencies. It does not take part in the day-to-day oversight of the University’s affairs or in the decision-taking process but provides a public forum where members of Court can raise any matters concerning the University. The Court is required to meet at least once a year. The non-statutory Executive Committee meets regularly to advise the ViceChancellor on issues relating to the management of the University. An outline of the governance structure can be found at: http://www.bath.ac.uk/statutory-bodies-committees/GovernancestructureOct12.pdf

2 Principles of Public Life

Council discharges its functions with due regard to the 'seven principles of public life' defined by the Nolan Committee:

  • Selflessness: Holders of public office should act solely in terms of the public interest. They should not do so in order to gain financial or other benefits for themselves, their family or their friends.
  • Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their official duties.
  • Objectivity: In carrying out public business, including making public appointments, awarding contracts or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
  • Accountability: Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
  • Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
  • Honesty: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
  • Leadership: Holders of public office should promote and support these principles by leadership and example.

3 Principles of Governance and Management

The University Council recognises that there are clear distinctions between governance and management. However, a key aim of both governance and management in the University of Bath is the preservation of academic freedom within the law, combined with academic responsibility. Governance has to do with defining policies and setting objectives. Council members need to be satisfied that processes and procedures are in place which are sufficient, necessary and effective in running the business of the University. They do this by asking probing, searching questions and ensuring responses are sound, confident and consistent, rather than doing direct checking themselves. Neither the Chair of Council nor individual lay or independent members should become involved in the day to day executive management of the University. Management has to do inter alia with advising the governing body about policies and objectives, devising means of meeting the agreed objectives and being held accountable for implementing the policies of the governing body. Effective management, and good governance, are underpinned by the following ten key principles:

1 the governing body is the ultimate decision-making body;

2 the governing body is accountable for the financial health of the institution;

3 roles and responsibilities of the governing body, committees and senior staff, should be defined, understood, accepted and regularly reviewed;

4 competencies of the governing body, committees and senior staff should be in line with needs and should be regularly reviewed;

5 the institution should have a strategic plan and an annual operating plan and budget;

6 the strategic plan should be supported by a financial strategy;

7 risks should be recognised, assessed and managed;

8 management information should be relevant, reliable and timely;

9 communication should be effective throughout the institution;

10 systems should be in place which are robust and fit for purpose.

The CUC Governance Code of Practice is intended to reflect good practice in a sector which comprises a large number of very diverse institutions. Institutions are expected to state that they have had regard to the Code, and where an institution's practices are not consistent with the particular provisions of this Code, an explanation shall be published in the corporate governance statement of the annual audited financial statements. The University fully considered and took account of the Code when reviewing the effectiveness of Council during 2014/15 and has ensured that the practices of the University are consistent with the provisions of the Code.

4 Duties and Responsibilities of Members of Council

The University is an educational charitable and chartered corporation, exempt under the terms of the Charities Act. The members of the Council as individuals are the managing trustees of that charity, although they are not in the strict legal sense trustees. Although a member of Council may have been appointed by an outside body, he or she owes a duty of care as a managing trustee to the University and not to the appointing body. It is the duty of members of Council to bring their various skills and experiences to bear in exercising their responsibilities and to play a full part in the taking of corporate decisions. Members should:

  • act honestly, diligently and in good faith
  • be satisfied that the course of action proposed is in accordance with the University’s Charter, Statutes and Ordinances
  • not bind the University to a course of action which it cannot carry out
  • seek to ensure that the University does not continue to operate if it is insolvent
  • seek to persuade colleagues by open debate and register dissent if they are concerned that the action would be contrary to any of the above
  • avoid putting themselves in a situation where there is actual or potential conflict between their interests and those of the University

If this advice is followed, it is unlikely that personal liability could arise, since the powers and responsibilities of governing bodies are exercised in a collective manner and decisions are made by formal resolution. However, claims involving the collective decisions and actions of the governing body may be made. Provided that members of Council act in the best interests of the University and within the scope of their powers, they are as individuals indemnified by the University to the extent of its assets against the results of their actions or decisions. It is central to the proper conduct of business that members of the Council and its Committees should act, and be perceived to act, impartially and not be influenced in their role by personal, social or business relationships. Members of Council are required to make an annual Declaration of Interests with respect to their own financial and non-financial interests, connections and associations and those of their close family, spouse or partner. Any member of Council who believes that they may have a direct or indirect personal or financial interest in any matter under discussion at a meeting shall state that interest at the earliest opportunity and will automatically withdraw from the meeting when the relevant business is reached unless invited to stay by the Chair.

4 Role of Principal Officers

The Chancellor (HRH The Earl of Wessex) is formally the lay head of the University and Chair of the Court. The Chancellor's ceremonial duties include presiding at degree congregations. In the absence of the Chancellor, the two Pro-Chancellors (Peter Troughton and Roger Whorrod) may exercise all the functions of the Chancellor except for the conferring of Degrees. The Chair of Council (Thomas Sheppard) is responsible for the leadership of the governing body and for ensuring that its members work together effectively and have confidence in the procedures that have been laid down for the conduct of business. The Chair does not participate in the day-to-day executive management of the institution. The Treasurer (John Preston) is appointed by Council and chairs the Finance Committee. The Treasurer is responsible to Council for maintaining an overview of the University’s financial policies. The statutory position with respect to the Treasurer is set out in Statute 6. The President and Vice-Chancellor has overall responsibility for the executive management of the institution and its day-to-day direction and is accountable to the Council for the exercise of those responsibilities. The statutory position with respect to the Vice-Chancellor is set out in Statute 5. The Deputy Vice-Chancellor and Provost (Professor Bernie Morley) is a full-time statutory officer who assists the Vice-Chancellor and stands in as required. The Pro-Vice-Chancellors (Professors Jeremy Bradshaw, Jonathan Knight and Peter Lambert) have specific University-wide responsibilities for International & Doctoral, Research, and Learning & Teaching respectively, in addition to their substantive academic duties. The University Secretary and Secretary to the University Council (Mark Humphriss) is responsible for the provision of secretarial services to all statutory committees. It is clearly understood that the role of the Secretary to Council involves responsibilities to the Council itself as the governing body of the University and to its Chair. The Council will expect the Secretary to Council to ensure the availability of impartial advice to the Council on relevant issues arising in the use of public funds, accountability and legal compliance, including exceptional cases where the propriety of the actions of any University officer may be in question. The Director of Finance (Martin Williams) is responsible for the finances of the University, including the preparation of annual estimates and financial plans, and annual accounts. The Director of Estates (Martyn Whalley) is responsible for the buildings and estates function within the University. This involves all strategic and operational property matters for all University premises. 5 Council Committees The following Committees report to Council:

  • Audit Committee
  • Council Appeals Committee
  • Finance Committee
  • Nominations Committee
  • Remuneration Committee
  • University Ventures Board

Membership and terms of reference of all Council committees can be found at: http://www.bath.ac.uk/statutory-bodies-committees/

Revised August 2018