The subject causes heated arguments, but surely the newly professionalised world of college governance would benefit from paying those with oversight, says Sue Pember
There is a long history in the UK of the voluntary principle for the governance of public services and charities and, until recently, this has worked well in most instances. The concept of unpaid governors has been one of the defining characteristics of the charitable and college sectors and contributes greatly to public confidence in their governance.
That said, governors are entitled to have their expenses met from college budgets, but the idea of taking this further and paying governors for their attendance at meetings, or giving them an annual salary, divides governors and senior leaders.
Everyone agrees that good people should be supported to attend meetings by claiming for travel and other expenses, such as childcare; but whether college governance is improved if the chair and governors are paid has yet to be evaluated and the subject causes heated debate.
College governing bodies are subject to charity law, and governors are the equivalent of trustees. They should not profit from the office they hold unless authorised by the governing document (Instrument & Articles, Statute or Principal Regulator).
“Governors are being asked to do much more than before”
But there are circumstances when payment is allowed, and the Charity Commission (CC) and the government have produced joint guidance on how boards can apply to the CC for permission. The guidance covers three specific areas where a governor could be paid: expenses and compensation; payment for services or extra work – for example, contributing to area reviews; and payment for professional board leadership.
Although this guidance has been around since 2013, only a handful of colleges have applied. On the positive side, most that have done so have been successful. The main reasons for applying have been to do with the complexity of a merger and/or taking a college from “inadequate” to “good” and needing to attract outstanding people for the role.
In Northern Ireland, colleges have been able to pay their board members for the past eight years and a recent evaluation found that the Department of Education reported a perception of an improvement in the range and calibre of applicants competing for chairs since the implementation of payment. They also reported an increase in applications for governor vacancies from women. Also, clerks thought attendance and engagement was improved.
Over in England? It is interesting that there have not been more colleges applying to introduce payments, but when I have talked to governors, they express concerns about whether this will open the door to external criticism and their motives for being a governor put in doubt. I think this worry is misplaced. NHS trusts and the police commissioners pay their trustees, many local authorities have an attendance allowance for councillors and some cabinet members are paid.
College governors are being asked to do much more than they were before colleges were incorporated in 1993 and are expected to do this without the type of support and reporting the previous funding bodies provided. As the funding agencies have shrunk in size, many of their assurance responsibilities have been transferred to the actual governing body. Some will say that’s the right place for them but, as seen in the past two years, governors struggle to take on that role without being trained and the concept of governance professionalised.
It is important that the proper procedures are put in place. For example, when deciding to apply to pay a governor, the governing body must manage any possible conflict of interest and ensure that this governor takes no part in any meeting or discussion affecting their own payment or potential payment. It must also be satisfied that paying the governor for services would be in the interests of the charity and that the level of payment is reasonable.
Finally, a written agreement, including specifying the exact (or maximum) amount to be paid, should be produced.
The professionalism of governance and the role of governors is changing significantly. If boards of colleges are reporting difficulty in competing with other organisations for governors, they should consider whether payment of chairs and other board members would help alleviate their recruitment problems, and apply.