A question of balance: Subsidiary governance in multi-academy trusts

A firm but flexible approach: Louise Thomson, Head of Policy at ICSA: The Governance Institute, blogs on the need for effective subsidiary governance in multi-academy trusts.

Corporate governance in the academy sector appears to be setting some schools quite a challenge. From single trusts getting to grips with the freedoms of not having to operate in the way they did under local government control, to multi-academy trusts operating tens of schools over a geographically diverse area, there is an urgent need that governance arrangements are fit for purpose.

If we accept governance as the way in which organisations are directed and controlled we can start to understand why good governance is integral to the effective running of an entity. However, it should also be remembered that governance is not one step up from management, but one step down from the owners. For academy trusts, those governing a school should not just think of being accountable to members but also to other key stakeholders: regulators, funders, sponsors, the local community and most importantly pupils and their parents. Therefore an effective governance framework will balance the need for internal direction and control with external accountability and transparency. For multi-academy trusts, this can be especially challenging, but this is not a challenge unique to this sector.

The commercial world has long had to develop governance arrangements to meet the needs of a global presence and to comply with different legal requirements in each of the countries in which a company operates. So perhaps there is something that multi-academy trusts could adapt?

Key aspects of good governance will incorporate proportionate and effective arrangements for board effectiveness and diversity, risk management and internal controls, financial and performance management, transparency and accountability. Sound subsidiary governance is essential to ensure that these arrangements are appropriate for the size and complexity of the organisation. For a multi-academy trust, the board needs to be sure that each of its schools is operating in a manner consistent with the direction and leadership set by the board, while being suitably flexible to deal with local cultures and situations.

Aspects of effective subsidiary governance which could be successfully adopted in multi-academy trusts include:

  • the culture and values for the multi-academy trust are set by the academy board and embedded throughout the organisation
  • buy-in from each of the local governing bodies or advisory councils -This requires a clear understanding of the respective roles and responsibilities of each
  • a governance handbook that details schemes of delegation, matters reserved to the academy board, terms of reference, policies, procedures, key risks for each school and details of the people sitting on each body
  • having a single point of contact for governance guidance, ideally this should be the trust’s company secretary or other identified governance professional, to ensure that advice is consistent and that communication flows between the board and local bodies are effective
  • being alert to local conditions and concerns and prioritising action accordingly
  • ensuring trust-wide policies and procedures are appropriate and effective
  • trust and local governing body effectiveness should be reviewed on an individual school and group basis, with additional training organised accordingly
  • sound communication flows from the trust board down and from local governing bodies/advisory councils up.

With the trust board adopting a firm but flexible approach to the governance in each school, they in turn can be held to account in an appropriate manner by external stakeholders. This will ensure that internal affairs can be successfully balanced with the external requirement for robust scrutiny in the use of public funds in delivering continual improvement for pupils.

 

Louise Thomson FCIS

 

 

Louise is Head of Policy (Not-for-Profit) at ICSA, the professional body for governance.
Louise has extensive knowledge of governance issues garnered from her career in the not-for-profit and public sectors, including education, over 20 years, complemented by her experience as a school governor, pension and charity trustee. Governance in the education sector is a core area of Louise’s work and she has produced guidance on the specific governance aspects of academies in a number of documents. Her extensive knowledge of company and charity law enables her to speak authoritatively across the range of governance matters affecting all educational institutions including academy trusts.