Draft Governance Handbook To support the Higher Education Code of Governance

Governance Resources The Code of Governance will be accompanied by a set of guidance notes issued from time to time and

hosted on the CUC website. The guidance will focus on process and practice and will provide examples and

templates for institutions to develop and adopt as they choose. An example is set out at Appendix 1. The

guidance will be developed collaboratively and will be based on current practice, both within Higher

Education and if appropriate other sectors e.g. NHS, charities etc. This guidance is meant to be a reference

tool and provide reassurance to those providers seeking support and direction that they are complying with

the Code. It is not a prescriptive set of processes that must be applied. The guidance will also include

governance practice that is specific to the devolved nations and the regulatory context of the Higher

Education provider.

The proposed contents for the handbook are listed below:

1. Introduction

Purpose of the Handbook

2. Illustrative Practice Notes

The handbook will include links to the CUC Illustrative Practice Notes (IPNs). The IPNs cover a range of

themes and topics and show how compliance can be achieved as well as circumstances under which

deviation from the Code could be justified. Some of IPNs will be new and reflect members requests

received as part of the ‘Call for Evidence.’

3. Possible list of content

Fit and Proper Board members

How institutional performance is measured, with possible institutional-level KPIs and benchmarking

Statements of Primary Responsibilities

Schemes of delegation

Corporate governance statements

Policies on ethics

Whistleblowing policies

Managing Conflicts of Interest

Policies in relation to aspects of research ethics

Policies on corporate and social responsibility.

Governance Practice in response to

a. Student engagement

b. Complaints management

c. Partnerships

d. Subsidiary companies

e. Fund raising

f. Equality and diversity

g. Values, Behaviours and Organisation Culture

h. Academic Quality and Standards

i. Risk

j. Information Management

Illustrative examples of Committee Structures

An illustrative assurance map of how institutions get assurance on a range of institutional-level

processes that it deems significant e.g. the provision of accurate and timely financial information,

internationalisation strategy, alumni and development, etc

Approaches to governor development

The role of the Senior Independent Director

The role of the Secretary to the Board

A checklist/toolkit to self-assess compliance against the Code

4. Further information and Support

Other organisations (such as AHUA, AHE, BUFDG etc) will be able to nominate links to any other

guidance or research that may be of interest to those interested in governance. Also included will be

links to publications, websites and other sources of support which HEIs wishing to develop their

approach to governance may find useful.

Appendix 1

Example Governance Practice Note

Fit and Proper Persons

1. Overview

1.1. The Finance Act 2010 introduced a definition for tax purposes of charities and other organisations

entitled to UK charity tax reliefs (referred to as ‘a charity’ or ‘charities’ in this guidance). The

definition includes a requirement that to be a charity an organisation must satisfy the

‘management condition’.

1.2. For a charity to satisfy the management condition its managers must be ‘fit and proper persons’.

There is no definition in the legislation of a ‘fit and proper person’, although there is some guidance

from HMRC. In addition, in England, to be registered on an ongoing basis with the Office for

Students (OfS), an institution must demonstrate that it satisfies the conditions of registration that

are set out in the OfS regulatory framework for Higher Education. The conditions of registrations

include the management and governance conditions, which requires the university to demonstrate

that it is governed and managed by ‘fit and proper’ persons.

1.3. The purpose of the ‘fit and proper’ test is to ensure that the governance and management

arrangements for a higher educational provider are appropriate and do not present a risk to

students or to public funds.

1.4. An institution approached CUC asking for advice on how to assess ‘fit and proper’. Using the AHUA

network, AHUA colleagues were asked to indicate the approach they used and, if possible, share

any key documents. This note is an analysis of the 25 responses received. It is descriptive of

practices adopted and is designed to help institutions reflect on their current practice and does not

imply there is one correct way to tackle this issue.

2. Approach

2.1. Just over 50% of respondents provide members with an explanation of the OfS criteria and then ask

for a self-declaration that they meet these criteria. The most comprehensive example is set out at

Annex 1. About a third of respondents provide the criteria in the form of a checklist and ask

members to confirm compliance with each element (see Annex 2). Some institutions also add in

details in respect of HMRC advice (Annex 3). The reminder of respondent does not explicitly ask for

declaration, but instead rely on the checks that they independently carry out.

3. Checking

3.1. The majority of respondents (56%) do not carry out any checks over and above those carried out in

the course of recruiting1 a member and any declaration they ask them to sign.

1 references, due diligence by search consultants, interview panels were mentioned

3.2. Of the 11 institutions that do carry out additional checks, the most common are:

10 look at the Companies House disqualified director register

7 carry out Google and social media checks

6 review the insolvency register: Individual Insolvency Register and Bankruptcy and debt relief

restrictions outcomes

4 examine Charities Commission data

1 looks at any information published by relevant professional bodes

1 confirms school governor information from the relevant school website

1 refers applications to its Development team who use the Factiva database

4. Other Points of Interest

4.1. Institutions provide varied degrees of information on their approach to Data Protection – see

examples at Annex 4. One institution indicated that the process and outcomes were reviewed by its

Audit Committee, another provided its standard operating procedure (Annex 5) and four

institutions were in the process of reviewing their policies and procedures.

Annex 1

Example of a briefing and declaration 1. What is the purpose of this form? 1.1. We are collecting this information from you in order to satisfy the management and governance

conditions around the university’s registration with the OfS. As part of this, we need to demonstrate that ‘the organisation is owned (where relevant) and managed by ‘fit and proper’ persons’. We seek confirmation from you when you are initially appointed in post as a member of Council and then annual confirmation thereafter. We are now maintaining/updating this record for our own purposes and to be able to respond to any future OfS requirements.

2. Overview 2.1. During the due diligence we undertook as part of your appointment process, we established your

good character and confirmed that you have the qualifications, competence, skills and experience that are necessary for your role as a member of Council.

2.2. We now ask you to re-confirm that you are a fit and proper person, as defined by the Regulatory

Advice for the Registration of Current Providers for 2019-20 (Appendix 1). We also ask you to re-confirm your commitment to the Nolan Principles of Public Life and the Public Interest Governance Principles as set out by the OfS.

2.3. This form and the information contained within it will enable us to:

bring to your attention the ‘fit and proper’ persons extract from the OfS Regulatory Advice for the Registration of Current Providers for 2019-20 (Appendix 1),

demonstrate our commitment to working with the highest standards of openness, integrity and accountability,

notify you on how the university will use the information and personal data you provide for (see 2.4 below).

2.4. How we will use this information 2.4.1. The OfS requires us to confirm that every individual whose details we have passed to it has

consented in writing to the OfS holding and processing their personal data for the purpose of its regulation of the university, and that we will provide a copy of this consent on request (section 98 of Appendix 1). However, under General Data Protection Regulations (GDPR), the lawful basis under which it is necessary for us to process your personal data is contained within article 6 (c) of the GDPR: ‘compliance with a legal obligation’.

2.4.2. You will be invited to sign a declaration in section 6 which states that you have read, understood

and completed this form and you confirm you are a fit and proper person. 2.4.3. For more information about how the OfS will use your information please visit the OfS website. If

you would like to know more about how the university uses the information it holds on you, please view our Staff Privacy Notice, we will follow the same approach to handling data on members of Council.

2.4.4. If you have any concerns about how your information will be used, please contact xxxx 3. Nolan Principles of Public Life

3.1. The principles have been taken from the government website and are the basis of the ethical

standards expected of public office holders. Please read the below principles and confirm your commitment in section 6.

3.2. Selflessness: Holders of public office should act solely in terms of the public interest. 3.3. Integrity: Holders of public office must avoid placing themselves under any obligation to people or

organisations that might try inappropriately to influence them in their work. They should not act or take decisions in order to gain financial or other material benefits for themselves, their family, or their friends. They must declare and resolve any interests and relationships.

3.4. Objectivity: Holders of public office must act and take decisions impartially, fairly and on merit,

using the best evidence and without discrimination or bias. 3.5. Accountability: Holders of public office are accountable to the public for their decisions and actions

and must submit themselves to the scrutiny necessary to ensure this. 3.6. Openness: Holders of public office should act and take decisions in an open and transparent

manner. Information should not be withheld from the public unless there are clear and lawful reasons for so doing.

3.7. Honesty: Holders of public office should be truthful. 3.8. Leadership: Holders of public office should exhibit these principles in their own behaviour. They

should actively promote and robustly support the principles and be willing to challenge poor behaviour wherever it occurs.

4. Public Interest Governance Principles as set out by the OfS 4.1. The principles below have been extracted from the OfS website and apply to all registered

providers. Please read the below statements and confirm your commitment in section 6.

I. Academic freedom: Academic staff at an English higher education provider have freedom within the law:

to question and test received wisdom; and

to put forward new ideas and controversial or unpopular opinions; without placing themselves in jeopardy of losing their jobs or privileges they may have at the provider.

II. Accountability: The provider operates openly, honestly, accountably and with integrity and

demonstrates the values appropriate to be recognised as an English higher education provider.

III. Student engagement: The governing body ensures that all students have opportunities to

engage with the governance of the provider, and that this allows for a range of perspectives to have influence.

IV. Academic governance: The governing body receives and tests assurance that academic

governance is adequate and effective through explicit protocols with the senate/academic board (or equivalent).

V. Risk management: The provider operates comprehensive corporate risk management and

control arrangements (including for academic risk) to ensure the sustainability of the

provider’s operations, and its ability to continue to comply with all of its conditions of registration.

VI. Value for money The governing body ensures that there are adequate and effective

arrangements in place to provide transparency about value for money for students and (where a provider has access to the student support system or to grant funding) for taxpayers.

VII. Freedom of speech: The governing body takes such steps as are reasonably practicable to

ensure that freedom of speech within the law is secured within the provider. VIII. Governing body: The size, composition, diversity, skills mix, and terms of office of the

governing body is appropriate for the nature, scale and complexity of the provider. IX. Fit and proper: Members of the governing body, those with senior management

responsibilities, and individuals exercising control or significant influence over the provider, are fit and proper persons.

X. Records: Where degree awarding powers (DAPs) are solely contained in the provider’s

governing documents, and no order either under section 76 of the Further and Higher Education Act 1992, or under the Higher Education and Research Act 2017 exists, the provisions setting out those powers must be retained and may not be altered without the consent of the Office for Students.

XI. Independent members of the governing body: There must be at least one external

member of the governing body who is independent of the provider, and whose term of office is normally limited to a maximum of three terms of three years or two terms of four years. For providers with large governing bodies, or more complex legal forms, additional independent members may be appropriate.

XII. Regularity, propriety and value for money: The governing body ensures that there are

adequate and effective arrangements in place to ensure public funds are managed appropriately, in line with the conditions of grant and the principles of regularity, propriety and value for money, and to protect the interests of taxpayers and other stakeholders. This also applies to any funds passed to another entity for the provision of facilities or learning and teaching, or for research to be undertaken.

5. Fit and proper person 5.1. The OfS Regulatory Advice for the Registration of Current Providers for 2019-20 (Appendix 1)

outlines regulations around the ownership and management of providers. Please read the below statements and confirm in section 6.

The following statements are an extract from the Regulatory Advice provided by OfS (see Appendix 1) setting out their indicators of a fit and proper person:

5.2. you are able by reason of your health, after reasonable adjustments are made, to properly perform

the tasks of the office or position for which you have been appointed; 5.3. you have not been responsible for, been privy to, contributed to, or facilitated, any serious

misconduct or mismanagement (whether unlawful or not) in your employment or in the conduct of any entity with which you are or have been associated;

The following statements are an extract from the Regulatory Advice provided by OfS (see Appendix 1) setting out their indicators that a person may not be a fit and proper person:

5.4. disqualification from acting as a company director, or from acting as a charity trustee, as set out in

the Company Directors Disqualification Act 1986 or the Charities Act 2011; 5.5. conviction of a criminal offence anywhere in the world; 5.6. subject of any adverse finding in civil proceedings, where relevant, including but not limited to

bankruptcy or equivalent proceedings (in the last three years); 5.7. subject of any adverse findings in any disciplinary proceedings by any regulatory authorities or

professional bodies; 5.8. involvement in any abuse of the tax systems; 5.9. involvement with any entity that has been refused registration to carry out a trade or has had that

registration terminated; 5.10. involvement in a business that has gone into insolvency, liquidation or administration while the

person has been connected with that organisation or within one year of that connection; 5.11. dismissal from a position of trust or similar; 5.12. involvement with a Higher Education provider that has had its registration refused or revoked by

the OfS or has had similar action taken against it by another regulator (this includes, but is not limited to, serving on a board/governing body, having voting rights, being a significant shareholder/owner, serving in a senior position, etc.).

6. Formal confirmation and sign off

Name

Confirmation

I confirm my commitment to the Nolan Principles (section 3); ☐

I confirm my commitment to the Public Interest Governance Principles as set out by the OfS (section 4);

☐

I confirm statements 5.2 and 5.3 continue to apply to me that demonstrate I am a fit and proper person;

☐

I confirm that the statements from 5.4 to 5.11, that could indicate that I may not be a fit and proper person, do not apply to me.

☐

If you have any further comments, for example, if sections 5.4 to 5.11 apply to you or if there is anything you think we should be aware of, please provide more below:

The information in sections 3 to 5 are a continuing requirement of our registration with the OfS. We would be grateful if you can notify us of any subsequent changes xxxx. Please confirm that you are aware of this requirement.

☐

Please type your name in lieu of a signature. You do not need to print and sign this document.

By signing this form, I confirm that I have read and understood the information contained in it and that section 6 has been completed by me

Date of signature

Please save as a Word document using a file name that includes your full name and email to xxx

Annex 2

Example of a Questionnaire and Declaration If you answer ‘yes’ to any of the questions in this declaration, you must provide full details, making it clear

to which question you are referring.

(All information provided will be kept confidential and managed in line with our Data Protection policy.)

1. Have you ever been or are you currently? A director, a partner in a partnership, a trustee, secretary or controller of a company, or an officer of an organisation that has, either during your connection or within one year of that connection:

Gone into liquidation

Called in a receiver or administrator

Been wound up

Been convicted of an offence that potentially carries a custodial offence for an individual

Delete as appropriate Yes No Yes No Yes No Yes No

2. Have you ever had or used a different personal name? Answer yes regardless or the reason for the change or name or use of a different name.

Marriage

Deed poll

Nom de plume

Yes No Yes No Yes No

3. Have you ever been convicted of a criminal offence anywhere in the world?2 You do not need to declare ‘spent’ convictions under the Rehabilitation of Offenders Act 1974.

Yes No

4. Have you ever been the subject of any adverse finding in civil proceedings, where relevant, including, but not limited to bankruptcy or equivalent proceedings (in the last three years)?

Yes No

5. Have you been involved in any abuse of the tax system?

Yes No

6. In the last five years, have you been the subject of any civil action relating to your professional or business activities that has resulted in a judgement or finding against you by a court, or a settlement (other than a settlement consisting only of the dismissal by consent of a claim against it and the payment of its costs) being agreed?

Yes No

7. Have you ever been disqualified by a court from being a director or from acting as a charity trustee, as set out in the Company Directors Disqualification Act 1986 or the Charities Act 2011, or

Yes No

2 These are sometimes listed, for example Conspiracy, Corruption, Involvement in serious organised crime or directing serious organised crime, Bribery, Cheating the Revenue, Conspiracy to defraud’ Fraud or theft, Fraudulent trading, Fraudulent evasion, Destroying, defacing or concealing of documents or procuring the execution of a valuable security, attempting to pervert the course of justice, Money laundering, Terrorist offences or offences linked to terrorist activities, An offence in connection with the proceeds of drug trafficking

from acting in the management or conduct of the affairs of any company?

8. In the last ten years, have you been:

a) Refused or been restricted in the right to carry on any trade, business or profession for which a specific licence, registration or other authority is required?

b) Investigated about allegations of misconduct or malpractice in connection with your professional activities which resulted in a formal complaint being proved but no disciplinary order being made?

c) The subject of disciplinary procedures by a professional body or employer resulting in a finding against you?

d) Reprimanded, excluded, disciplined or publicly criticised by any professional body to which you belong or have belonged?

e) Refused entry to or excluded from membership of any profession or vocation?

f) Dismissed or requested to resign from any office, employment or partnership (other than through redundancy)?

g) Reprimanded, warned about future conduct, disciplined or publicly criticised by any regulatory body, or any officially appointed enquiry concerned with the regulation of a financial, professional or other business activity?

h) The subject of a court order at the instigation of any regulatory body, or any officially appointed enquiry concerned with the regulation of a financial, professional or other business activity?

Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No

9. Are you currently undergoing any investigation or disciplinary procedures in respect of issues that would give rise to any ‘yes’ answers to questions in this declaration?

Yes No

10. Have you been involved with any entity that has been refused registration to carry out a trade or has had that registration terminated?

Yes No

11. Have you been dismissed from a position of trust or similar? Yes No

12. Have you been involved with a Higher Education provider that has had its registration refused or revoked by the Office for Students or has had similar action taken against it by another regulatory (this includes, but is not limited to, serving on a board/governing body, having voting rights, being a significant shareholder/owner, serving in a senior position, etc?

Yes No

I have completed and provided accurate information with this declaration to the best of my knowledge and

understanding. I understand that the personal data (including any sensitive personal data) contained within

this declaration will be used by the university to ensure compliance with its legal, regulatory and

professional obligations. The personal data will be disclosed only to those within and outside the university

responsible for ensuring the university’s compliance.

Signed:

Name (PRINT)

Date

Annex 3

Example of HMRC Declarations I, the undersigned, declare that:

I am not disqualified from acting as a charity trustee.

I have not been convicted of an offence involving deception or dishonesty (or any such conviction is

legally regarded as spent).

I have not been involved in tax fraud or other fraudulent behaviour including misrepresentation

and/or identity theft.

I have not used arrangements notified under the Disclosure of Tax Avoidance Schemes (‘DOTAS’)

rules in Part 7 Finance Act 2004 in respect of which a reference number has been issued under

section 311 of Finance Act 2004, where the arrangements featured charitable reliefs or which used

a charity, and where my tax position has been adjusted by HMRC to wholly or partly remove the tax

advantage generated by the arrangements and such adjustments have become final.

I have not used tax arrangements which have been successfully counteracted under the general

anti-abuse rules (see Part 5 of Finance Act 2013 or section 10 National Insurance Contributions Act

2014, as enacted or as amended from time to time) where such counteraction has become final.

I have not been actively involved in designing and/or promoting tax avoidance schemes featuring

charitable reliefs or which used a charity, and I am not:

• a promoter named by HMRC under the Promoters of Tax Avoidance Schemes (POTAS)

legislation in Part 5 of Finance Act 2014, or

• a promoter of any tax arrangements designed or intended to obtain for any person a

tax advantage and such tax advantage has successfully counteracted by HMRC under

the general anti-abuse rule (see Part 5 of Finance Act 2013 and section 10 National

Insurance Contributions Act 2014 as enacted or as amended from time to time) and

such counteraction has become final, or

• a promoter of arrangements notified under DOTAS, in respect of which a reference

number has been issued under section 311 of Finance Act 2004, and the tax position of

all or any of the users of the arrangements has been adjusted by HMRC to wholly or

partly remove the tax advantage generated by the arrangements and such adjustments

have become final.

I am not an undischarged bankrupt.

I have not made compositions or arrangements with my creditors from which I have not been

discharged.

I have not been removed from serving as a charity trustee, or been stopped from acting in a

management position within a charity.

I have not been disqualified from serving as a Company Director I will at all times seek to ensure

the charity’s funds, and charity tax reliefs received by this organisation, are used only for charitable

purposes.

Annex 4

Data Protection Examples Example 1 GDPR Privacy Statement This information is requested from you in order that the university can comply with the statutory and regulatory requirements including the university's OfS registration, Charities Act 2011, and to comply with notification to insurance providers under UK law. The personal data provided will be held securely and confidentially by the xxxx. In order to comply with the legal and regulatory requirements placed on the university it may be necessary for auditors and/or OfS to have sight of the completed forms. In accordance with the requirements of the Charities Act 2011 details of Governors' Trusteeships will be published on the university's website. The university is the Data Controller of this personal data and it will be processed in accordance with Article 6(1(c)) of GDPR. Details of how the university processes your data including how long it will be retained for and your rights under GDPR are detailed in the university's Privacy Notices https://www.xxxx.ac.uk/xxxxxx Example 2 Data Protection The following is a Privacy Notice under Data Protection law: The information supplied on this form will be used to assure your fitness to hold a governor position at xxx University. The legal basis for processing your personal data is that it is necessary for the performance of a task in the public interest. Your information may be shared with the Office for Students (OfS) if required and/or similar organisations with regulatory/inspection oversight responsibilities over the university. The information will be held for the duration of your time as a Governor including any amendments made during the period of your role [plus 12 years]. This declaration will be kept securely and in confidence. Access to this information will be restricted to designated persons within the Secretary and Clerks’ Office and relevant third parties who are authorised to view it as a necessary part of their work. You have the following rights for your personal data: request a copy of your data from us; to request us to cease processing if you suffer damage or distress; to correct the data; to restrict our data processing activities.

Example 3 By checking the box below, I give my consent to the processing of the data contained in this form. I understand that the processing of this data is necessary for the performance of a task carried out in the public interest, which is to ensure that the university operates in accordance with high standards of integrity and transparency as set out in the Public Interest Governance Principles and Seven Principles of Public Life. Example 4 All information provided will be kept confidential and managed in line with our Data Protection policy.

Annex 5

Fit and Proper Person Enquiries

Governor Name:

1. Is the individual of good character?

Evidence base:

2. Has the individual got the qualifications, competence, skills and experience that are necessary for their role?

Evidence base:

3. Is the individual able by reason of their health, after reasonable adjustments are made, to perform properly the tasks of the office or position for which they are appointed?

Evidence base:

4. Has the individual completed the ‘fit and proper person’ self-assessment included in Declaration of Interests? When?

Are there any positive responses? If so, list them below and state how these were dealt with

5. What are the results of a company director search on the Companies House website? List all companies, including those no longer trading.

Company name and number Role Date of Appointment

Appointment active?

6. Results from checks of:

Disqualified directors

Individual insolvency register

Bankruptcy and debt relief restrictions

7. If the individual had identified that they are a trustee of a registered charity on their self-declaration, what are the result of a search of the Charity Commission’s website of other trusteeships?

8. Results of a search of the Charity Commission’s register of disqualified trustees

9. Are there negative indicators following an internet search on the individual? Please list the searches run (include inter-alia: fraud, misconduct, disciplinary, disqualification, evasion, regulatory, reputation, discharge, financial)

Completed by:

Name Job Title

Date of initial completion

Date of last update