Preena Patel, a solicitor at law firm BDB Pitmans, asks whether you should consider a governance review

Good governance is key to the long-term effectiveness and sustainability of any independent school. Given its charitable status, purpose and the enhanced regulatory scrutiny, governors must be able to demonstrate how well their school is governed. It is, therefore, essential to have efficient and transparent systems in place to help your school reach its potential, as well as to help manage risk, and a governance review can help ensure these systems are in place.

What’s the purpose of a governance review?

The purpose is to examine the governance structure of a school and its effectiveness alongside the school’s operations and performance to ensure best practice, accountability and risk management, while ensuring alignment with the school’s vision and mission.

There is guidance from the Department for Education in relation to external governance reviews generally which suggests that reviews should:

• consider the process and impact of decision-making,
• consider the impact of the governance support provided to the board, and
• test compliance with mandatory requirements.

Ultimately a review should enable governors to provide reassurance that the way in which a school is operating is as effective and efficient as possible and is in line with the school’s strategic direction and in furtherance of its pupils’ education. There are several outcomes and benefits to undertaking a governance review, the most important being an opportunity to assess:

• the effectiveness of a school’s current policies and procedures and the level of accountability and leadership shown by the board,
• whether the existing policies and procedures align with best practice, and
• any potential risks and how best to mitigate them.

What about the Charity Commission and the Charity Governance Code?

At charitable independent schools, governors are trustees and therefore have fiduciary duties including to act only in the best interests of their charity beneficiaries and to ensure compliance with the Charity Commission’s standards of governance which extend to the Charity Governance Code.

The Charity Governance Code is a practical tool to help charities develop high standards of governance. The Code has no legal or statutory standing but it does build on guidance from the Charity Commission and the Commission does expect the Code to have been considered by charitable independent schools.

The Code states that “good governance in charities is fundamental to their success… and as a sector we owe it to our beneficiaries, stakeholders and supporters to demonstrate exemplary leadership and governance” and sets out seven deliberately aspirational principles of good governance and each principle is followed by recommended practice about how best to comply with that principle.

As part of any governance review, the seven principles, as set out below, should be considered:

• organisational purpose,
• leadership,
• integrity,
• decision-making, risk and control,
• board effectiveness,
• equality, diversity and inclusion, and
• openness and accountability.

How important is the role of the chair in building and leading an effective governing body?

The first principle in the Charity Governance Code relates to organisational purpose, meaning that a governing body must be clear about its school’s aims and ensure they are being delivered effectively and sustainably.

The role of the chair is to keep the governing body focused on providing proper oversight of the delivery of the school’s strategic aims and to build and maintain a governing body which collectively has adequate skill and experience to oversee the operations of the school. As part of this, and as part of setting the strategy of the school, the chair will need to consider the school’s governance – everything from committees and terms of reference to policies/governance manuals and trustee skills audits. Once the chair has determined the structure of the board, including its committees and where skills lie, the board can work together in undertaking a governance review and implement any recommendations arising.

When should you carry out a governance review?

The Charity Governance Code recommends that a board periodically reviews the organisation’s charitable purposes, and the external environment in which it works, to make sure that its operations and its purposes stay relevant and valid.

Generally, we would expect governors to review aspects of their governance procedures on an annual basis to ensure they are fit for purpose and will withstand challenge. There may, of course, be times at which a specific review is required, for example, if your school is thinking of restructuring or is aware of underperformance or a specific incident.

More generally, the National Council for Voluntary Organisations recommends (in line with accepted good practice) that a more in-depth review should be timetabled and carried out, with external assistance, every three to five years. There’s no one-size fits all approach to the timing but such reviews can take time and so it’s crucial that there is sufficient forward planning to ensure that adequate board time is carved out, and resources allocated.

Some practical tips on how to carry out an effective governance review

What to focus on as part of a governance review will largely depend on what you want to achieve for your school in the first place. Here are some key points to think about in beginning the review process:

• Scope of review – be clear as to what is and is not being reviewed and what the aims and expectations of the review are; set measurable reporting goals with clear outcomes and milestones/time frames at the outset to ensure that everyone is on the same page.
• Consider establishing a working group/committee to lead the review – although the review must be led from the board, the governors can delegate oversight of the review to a working group/committee with clear terms of reference in place as to its scope. The board may also want to consider whether it needs any external professional advisors to assist.
• Benchmarking and compliance – review what is considered best practice in the area, taking into consideration guidance from the Charity Commission, the Department for Education and other organisations supporting schools; clarify what your school does to comply with best practice guidance and also mandatory regulations and requirements to assist in setting the tone of the review.
• Agree a review action plan – consider what you want to achieve and set a plan (with terms of reference) as to how best to action that. This may include reviews of policies and procedures or the constitution, implementing training, or drawing up new policy documentation. Factor in stages for each element of the review.
• Implementation phase – ensure that there is some form of reporting framework in order to measure progress and impact. Remember that challenge and scrutiny of the school’s governance can help build a strong and robust board with the means to tackle any incident arising.

Preena Patel