Challenges and Opportunities at London Met

Roles and Responsibilities in Challenging Times: The Management Malcolm Gillies, Vice-Chancellor and Governor

Roles and interests: Governors

• Steering, not rowing • Ownership of overall strategy • Oversight and challenge to management and to institution • Complementary skills and competencies • Responsibilities as institutional governor, company director and charity trustee • Formal responsibilities regarding audit, finances, estates, industrial matters, etc.

Two special features: Governors

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An Academic Strategy Committee (replacing an earlier Academic Standards Committee, and with some overlap with Academic Board) Special role of Governors as Trustees of the Women’s Library, with a number of governors on its Advisory Committee.

Question: Are these appropriate roles for governors?

Roles and interests: Management

• Rowing, and prompting steering • Executing overall strategy • Delivery on institutional performance • Determining and directing delegations • Formal responsibilities regarding all aspects of institutional management • Formal accountabilities to stakeholders, including HEFCE, via Vice-Chancellor

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Two special features: Management

Deputy Vice-Chancellor (= Provost), with major academic delegations; Deputy Chief Executive (= Chief Operating Officer), with major operational delegations 2.

Vice Chancellor’s Office, with three subsections: Secretary’s Office; Strategic Programmes Office; Office of Institutional Efficiency. Question: Is this very North American structure appropriate? Is the Secretary’s role compromised?

The Challenge: January 2010

• Institution possibly failing, merger of 2002 incomplete, long running industrial crisis, funding irregularities → major penalties • Major reputational loss, unrealistic 10-year strategic plan, loss of over 30% student numbers • Required change of governing body (in particular, audit committee), vice-chancellor • Investigation of senior management • Immediate need for strong, tough strategy • Tight regulation imposed; “At Risk” status.

Questions

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Were the extraordinary responsibilities entrusted to the (new) vice-chancellor appropriate? How interventionist or closely monitoring should the Governors be?

What can be expected from independent vs. staff/student governors, especially in times of profound change?

Is an “amateur”, unremunerated Board adequate in times of such change?

The Challenge: May 2012

“Here is a university that missed out on the higher education bonanza of the past decade, diverted by its own internal ructions, and clearly still has difficulties embracing the realities of this more austere decade.

” (Malcolm Gillies, “Beyond the Headlines”,

THE

, 17 May 2012)

The Challenge: May 2012

“What underpins the recent stories about the institution is one impulse:

affordability

. A university that lived beyond its means must now pay its way – indeed, pay back for what it never earned while demonstrating ‘value for money’. It is learning to compete in the increasingly privatised market it finds itself in, right in the heart of London.” (Gillies, ibid.)

Recovery timetable

• New Governing Body in place by Sept. 2010; now bedding down well • New senior management team achieved by April 2011; experienced managers • Need to establish pragmatic working relationship between governors and evolving management • Major reviews of all key functions • Critical reformation of course portfolios, and faculties; re-engineering of all major administrative functions → shared services • Six redundancy rounds; redefinition of roles.

The risks: May 2012

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Financial sustainability 25/20 Management of student population 25/20 Return from new business relationships 20/15 High-quality student experience 16/12 Culture of high expectations/performance 16/12

Risk management

Local risk registers at faculty and support department levels Monthly meetings of management’s risk committee, reviewing and revising Corporate Risk Register

Report to each Audit Committee meeting Occasional reports to Board of Governors, with major annual exercise, including revision of risk appetite.

Regular reports on risk by VC to HEFCE .

Scorecard to date

Strategic directions  Operational directions  initiative Financial directions  → shared services Core functions: Educational directions  Access and participation  education strategy &  → affordable quality Research and enterprise directions  institutional purpose → refocus of

Challenges and Opportunities at London Met

Roles and Responsibilities in Challenging Times: The Governing Body Daleep Mukarji, Independent Governor

2008-2009 Crisis

• HEFCE data audit, repayment of £36.5m

• Financial: Budget deficits/ sale of assets • Uncertain Leadership: 3 VCs in 2009 !

• Weak Governance: Failure of oversight • Organisational Culture of 2 Universities: even after years of merger (2002) • Failure of many internal systems eg. student data

Dec 2009 Joint Statement between HEFCE and GB/LMU

• Asked for quarterly reports to HEFCE • To tackle the governance, management, financial sustainability and systems issues at London Met • New VC was to be accountable for developing a framework to oversee necessary changes • London Met to repay £ 36.5m by 2013-2014 to HEFCE

2010 Year of Transition & Challenges

• New VC joins Jan 2010 • Complete new GB by Sept 2010 with new expertise and competence • Key new staff changes/ additions • New Strategic Plan 2010-2013: Transforming Lives, Meeting Needs, Building Careers (mission, core purpose, values, strategic priorities & key activities agreed)

2010 Other Challenges

• Browne Report • New Government and Comprehensive Spending Review • Uncertainty around Govt. HE policy but clear that grants would be cut, student fees to go up and competition introduced.

• Unions challenge changes • Urgent need for LMU to change and manage risks

£90m Sustainability Action Plan (SAP) needed

Cashflow forecasts

Intervention

A stable and sustainable future

Growth

Stability & Sustainability Action Plan

Stagnation Closure

Transformational Change

• New senior team introduced (Deputy VC, Deputy CEO, University Secretary and others) • Undergraduate review led to new portfolio of courses ( fell from 500 to 160) • Fees set for 2012 from £4500 to £9000 (with average at £6850) • Consolidation in PSDs & Faculties • Cuts in staff costs • Estate Review with further sale and cost controls • Review of PG Education & Research

Performance of GB (my experience)

• Too large, too many executive staff present, too few meetings and too short with a crowded agenda (far too many and very long papers!) • Possibly outdated model of governance and needs to change too…smaller, focussed & strategic • Governors need to give more time (12 to 15 full days a year?), become a team and may be appropriately compensated.

• Away days can enable GB to be strategic • Staff and student representatives can miss the big picture to be corporate & strategic

Signs of Hope

• New Executive Team working well and taking on challenges • Changes already introduced by VC showing initial results and improving reputation • Confidence and trust being built up by GB in the Executive Team with a willingness to let go/delegate more and consider innovative and new options for the future • Good analysis and reports from consultants help think out side the box • Internal and external communications improved

Role & Responsibilities of GB

Governance Code of Practice of CUC, Principles from HEFCE & responsibilities set out in constitution Yet…..The challenge is to govern & set directions in a complex, changing, competitive, uncertain & sometimes confusing environment & to have overall responsibility for outcomes & performance! It is a risky but challenging role. Needs GB and management to work together. Basic Choices: • Continue business as usual • Change strategically with Sustainability Action Plan • Close, merge or sell

Threats to London Met

• Enrolment & retention of students (cap of new FT home & EU students); less international students • GB & Management cannot deliver on sustainability & strategic plan; unable to control staff costs • Disruption and challenges from staff & students to organisational change & breakdown of communications • Reputational damage • Difficult relations with wider stakeholders: media, regulators, Government departments, community, Private Sector, Alumni etc • Pension costs & deficit

GB to lead & Monitor Institutional Stability and Future Directions

• Academic strategy & performance (profile and market position) • Quality student experience and affordable education • Financial health: regular monitoring of budgets, performance and audit reports • Financial Stability & Sustainability Plan and performance with new options considered • Organisational change and development: LMU fit for purpose in Sept. 2012 and beyond

Key Measures of Performance

• Results of National Student Survey (overall student satisfaction with LMU) • Admission, retention, completion and award statistics • Staff costs as a % of income • Operating surplus/deficit • Total reserves (excluding pension liability and endowments) • Value for money (for students and tax payers) • Estate management/use statistics

New Initiatives

• Brand: Affordable Quality Education • Review of business processes and planned Shared Services Unit • Cooperation with external partners (LSBF, BCOM etc) • Office of Institutional Effectiveness • Monitoring and management of key risks (failure to achieve financial sustainability & failure to adequately manage student population numbers etc.)

London Met today & the future

These are difficult & uncertain times & it is impossible to predict what will happen. But • Vibrant place that many people are proud to be part of & have hope for the future • Working towards accessible & affordable quality education and positive student experience • Serves the community, minority ethnic people and overseas students • Serious efforts for financial & institutional sustainability.