Learning from the best of corporate governance

The Key

View all posts by OliverIt’s no secret that the government wants to see a transformation in the way that governing bodies operate. For the past few years, the Department for Education (DfE) has been emphasising the importance of governor skills, as well as promoting smaller, more focused governing bodies.

However, it’s increasingly apparent that the DfE sees the next step for school governance as one where it learns from and emulates the best of corporate governance in the business and charity sectors.

In a speech given last July to the National Governors’ Association, Lord Nash, parliamentary under secretary of state for schools, called for governing bodies to develop:

… a stronger sense of strategic leadership, of the kind that you see in a charity’s board of trustees or in a company’s board of directors.

He argued for the creation of “more dynamic boards of governors”, pitting a more corporate model against old-style governing bodies made up of “particular interest groups”. Lord Nash said the change amounts to a “shift in mindset”, and would help dispel the notion that “volunteer meant amateur”.

But exactly what are the practical lessons that governors can learn from governance in the business and charity sectors? What is it about their non-executive boards that leads to more dynamic governance?

Business groups have been quick to share their thoughts. Last November, the CBI published a report on improving school governance and leadership which identified key lessons that schools can learn from industry. For example, it said there is a need to highlight:

… the benefits of limiting the opportunities for reappointment of both governors and chairs in order to support the flow of new volunteers, to minimise the risk of ‘group think’ and of governors becoming too close to the senior management team, and to encourage effective succession planning – all benefits well understood in business.

At The Key, we’ve come to realise that this is not a one-way process and there is much good practice that can be shared across these sectors. Training for our researchers on corporate governance has shed light on the similarities between effective governance in schools, companies and charities. The crucial nature of good working relationships between strategic and operational leaders, a clear focus on ethos and core aims, and having the right directors/governors in place have come up time and time again as critical elements in all models of governance.

Our researchers recently read Boards That Lead, which looks at how American corporations have been effectively managing greater board engagement and activity than ever, while retaining a clear distinction between the role of the executive and non-executive. Sound familiar?

In light of this trend, we’ve begun to build up an Expert Panel on Corporate and Voluntary Sector Governance, whose members can contribute directly to our articles. The aim is to open up governing bodies to the best practice of the private and charity sectors, so school governors can feel more in tune with the spirit of ‘professionalised’ governance. You can view examples of how we’ve used these experts in our articles on setting a strategy for the school and supporting and challenging the headteacher.

We’ve also tried to highlight ideas and resources to help governing bodies adopt some of the key practices of corporate boards. For example, one of our articles looks at how governing bodies have introduced Key Performance Indicators, often used by businesses, as a way of quickly and clearly illustrating how their schools are performing in line with their core targets. Over the next few months, we’ll be updating more of our articles to showcase the best practice from different sectors.

It’s also important to say that school governance remains distinct from governance in the business and charity sectors. Governing schools is a unique endeavour with its own particular challenges, and lessons from the private and voluntary sector won’t always be helpful.

It’s also equally true to say that there is much that employees and directors/trustees in the business and charity sectors can learn from school governance. The vast array of responsibilities that make up the school governor role offer a fantastic opportunity for those looking to develop their own knowledge and expertise. And school governors gain real insight into the challenges of operating an organisation for and of the community – something socially minded businesses can look to for inspiration. With these benefits in mind, groups such as the Inspiring Governors Alliance are encouraging employers to free up time for employees to become school governors.

At The Key, we’re really excited about developing the links between school governance and business and charity governance. Academy governors, as Lord Nash pointed out in his speech, function as directors and trustees of their academy trusts, so the change is already happening. It would be a missed opportunity if we didn’t look to share ideas and practice now.

Has your governing body learnt from private or charity sector governance? We’d love to hear about it.

Comments 2

  1. Edward Harkins 30th August 2014

    Really relevant piece. I have to say from my current experience that some in the third sector (charities) this is not always a message that they are willing to heed.

  2. Ben | First Flight 19th January 2015

    Oliver – a quick question if I may. You mention private vs charity governance, but what key differences are you seeing in terms of private vs public accountability? Take, for example, local government services (hospitals etc.) versus classic corporate business?

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