Today has seen the launch of NGA’s new report on the governance of multi-academy trusts, and a fine piece of work it is too. It provides an excellent summary of the current state of trust governance, and the key challenges we all need to work together to address. We’ve also this week seen the publication of a new Academies Financial Handbook, with key new provisions around governance. As an organisation working with executive leaders and their trust boards, I thought it would be helpful to contribute my reflections on some of the key findings and our own experiences and insights on these issues. Here’s my first of three blogs.
A need to improve (and continually improve) trust governance.
“Despite the consensus that one of the major challenges in the sector is to improve MAT governance, significant progress is yet to really get underway.” NGA Report, June 2019
‘What’s done is done’, they say. Yet, how poorly prepared the sector and its governance was – pushed along by impatient ministers who tried to build the house on sand. Academy trusts are multi-million pound organisations. Yet, from the beginning, and especially under Michael Gove, a huge transfer of money and responsibility was shifted to trust boards – without any strategy, national training programme, or funding for securing robust corporate governance within these organisations. As the NGA report states, ‘governing a MAT is very different to governing a single school.’ Robust governance, and with it the oversight of these complex, multi-million pound organisations, was almost completely left to chance by the Coalition government.
The cracks quickly appeared as example after example of trust failure emerged – almost all of them stemming from a lack of robust corporate governance. Simple things, such as blatant conflicts of interest, irresponsible pace of growth and expansion (outstripping capacity), and a lack of process for executive pay, all emanated from dozens of boards nationwide – often those populated by ‘great and good’ figures. Most of this could be put down to lack of training and preparation on the part of trustees, some of it down to a lack of sanctions for unethical and improper behaviour. It was a car crash of planning and implementation, and risked undermining the great work being undertaken by so many school leaders and trustees elsewhere. In some cases where failure occured, schools were being rebrokered and pupils’ education was thrown into disarray – all too often because the basics of good governance were lacking.
Those trusts – and there were many – who did build robust governance were in part thoughtful enough not to rely on the DfE for all their guidance and training (engaging independent training and support along the way), and in part lucky to attract the right kind of people to be trustees. Ask any CEO who has led a sustainable trust over the last six or seven years about how they’ve done it, and almost all of them will say that is it in part down to how lucky they have been in terms of the quality of their board. In my book, Being The CEO, I recommend that CEOs walk away if their board is incompetent or unethical; and – likewise – embrace the challenge and support of a strong and talented board of trustees.
By 2017, we at Forum Strategy had had the opportunity to work with some excellent trust boards, but we had heard the horror stories too many times. We knew better governance was possible in more trusts, but it needed national investment and provision for those trusts that weren’t finding their way. Forum Strategy brought together the NGA, leading trustees, and some CEOs from across our #TrustLeaders networks to produce a roundtable report on ‘recruiting and training’ trustees. The report identified the sheer lack of investment in trust governance, and called upon the DfE to fund development programmes for Chairs and trustees. You can read the full report and its summary in Schools Week, here: https://schoolsweek.co.uk/how-to-improve-academy-trust-governance/. Ministers listened, and funded provision was announced in early 2018, with a number of providers, the NGA included, now delivering such programmes. This came five years too late!
Yet, as the NGA report highlights, there is much more to do to secure improvements in trust governance. This week’s new edition of the Academies Financial Handbook has finally provided for sanctions for those trustees who are involved in mismanagement of funds, following calls at our 2018 annual conference to put something in place to ban trustees who had failed in their duties: https://www.tes.com/news/call-ban-trustees-guilty-mat-mismanagement
Again, sanctioning those involved in poor governance practice in trusts was overlooked for too long, another blindspot on the part of the DfE. Indeed, some trustees who had overseen the failure of one trust were moving on to become a trustee at another trust! The poor practice risked undermining the work of the vast majority of trustees, giving their time and expertise for nothing, whose reputations needed protecting. The sector also needed better safeguards if it was to be serious about improvements in governance and holding onto people who were both ethical and impactful.
Finally, on the subject of board improvement, any board worth its salt will now be focused on engaging in an external review of corporate governance. The DfE’s growth guidance of 2016 rightly encourages boards to engage in regular external reviews, and Ofsted’s new summary evaluations of trusts gives a nod to it by asking for “information regarding strategies used to improve the standards of governance in individual academies and across the MAT.” However, high quality external reviews of boards are not routine or regular enough in many trusts – and these need to be a much stronger feature of the trust system going forward. Both Forum Strategy and the NGA have worked to develop their own individual offers here, based on clear frameworks, robust research and thought-leadership, and day to day experience of supporting the sector over a number of years.
It is a testament to the work of NGA that so much thought-leadership and support has emerged over the last fey years. They have been banging the drum of the fundamental importance of governance in trusts for a long time now and building a strong bank of case studies, research and thought-leadership. The report is excellent reading. We have come a long way, but there is much more to do. The key lesson in all of this, Chairs should not wait for the DfE to ensure their board is effective and providing strong corporate governance, the training, support and resources are out there.
My next blog on this report will consider the issue of trustee recruitment and board diversity.
- NGA’s report: https://www.nga.org.uk/getmedia/88e9fcaa-0b91-4639-bba8-61847f77b7c1/MATs-40pp-Report-June-2019-(WEB)-AW-(1)-FINAL-27-06-2019.pdf
- Forum Strategy’s policy roundtable on recruiting and training trustees: http://hippofish.co.uk/policy-roundtable-paper-recruiting-retaining-september-2017/
- External Reviews of Trust Governance: http://hippofish.co.uk/testimonials-feedback/