Digital Transformation of HE Governance – Learning from beyond the Sector

Development Monthly | #17 March 2023 | Digital Transformation of HE Governance – Learning from beyond the Sector

Lucy Dixon (she/her)

Principal Consultant,
SUMS Consulting

and

Fola Ikpehai (she/her)

Principal Consultant,
SUMS Consulting

Outside the Higher Education (HE) sector, ‘governance’ primarily exists to manage risks through a consistent, transparent decision-making process, and works differently between different organisations and industries. Increasingly, organisations are looking to support their decisions through better use of data and technology, driving both quality and consistency in their practices. As a sector, HE has been slow to adopt these new technologies when compared to sectors such as Financial Services, and now faces a challenge in implementing both the technological, workforce and cultural change required to keep pace.

I’ve been surprised at the level of consistency when describing ‘governance’, its aims and practices in the HE sector. My session at the AUA Autumn Conference in 2022 focused on the topic of governance and, in particular, how we can learn from the way other sectors are using technology to improve their own governance practices. When asked, “where do you look for guidance on ‘good governance’”, the majority of delegates pointed to a single source, Advanced HE, followed by the Office for Students (OfS) principles and Committee of University Chairs (CUC) codes:

The existence of these guidance bodies puts the HE sector at an advantage. There is broad agreement around how to structure governance practices and their various aims. Before joining SUMS, a not-for-profit consultancy specialising in HE sector strategy and change,  I spent my career working to improve governance practices across the public and private sectors; including Financial Services, Manufacturing and within Government. Here, the majority of what can be called ‘governance’ is driven by regulatory concerns. The difference being that the HE sector has much wider concerns around university operations which impact the public good included in the ‘governance’ category. For example, the Office for Students [JA1] Public Interest Good Governance principles set out conditions for good governance which include ‘freedom of speech and ‘value for money’[1]. Having multiple bodies focused on supporting the sector to define these harder to quantify governance requirements is a good thing. By contrast, what is called ‘governance’ in the sectors I’ve worked in previously can be categorised under different types of ‘risk management.’ The ‘governance practices’ here are therefore almost wholly geared at staying on the right side of the regulator. Its no surprise that the CEO of the Financial Conduct Authority (FCA), the financial regulator, describes its role as one of ‘testing’ and ‘vigilance’ [2]where the HE sector regulator, the OfS, frames its regulatory objectives in terms of student ‘experience (and) outcomes’[3]; clearly aiming to couple its regulatory responsibilities with a stewardship of the sector geared toward achieving these objectives. The disadvantage for the HE sector comes in the methods through which responding to the various guidelines around governance has been approached. These approaches have tended to result in short-to-medium term resource fluctuations as leadership teams defaulted to solving critical issues by assigning more people to a given task. More recently, Manufacturing and Financial service institutions are looking to technology to strengthen governance practices and reduce the cost and complexity of these operations. Our discussion at the AUA Autumn Conference worked through recent examples of how technology has been deployed to improve governance in a given sector and discussed what, if anything, we could take away and use to challenge the standard ways of looking at governance in our respective organisations.

As outlined above, managing risk is the concern that underpins most governance practices outside the HE sector. Practically, governance measures vary from a focus on prevention (to actively manage the risk of regulatory breach), a (cheaper) focus on checks and assessment to retrospectively pinpoint deviation from ideal processes, or a combination of both. These practices are of course particularly prevalent in the banking sector where banks could face hefty fines if the regulator feels that they haven’t managed risks in the right way. The impact of this sector not managing risk appropriately can be catastrophic on the wider economy. The implication of ‘getting it wrong’ in our sector [JA2] may not cause a financial crisis but there is the risk of fines, reputational damage and the rare and ultimate possibility of an institution ceasing to operate or their registration being revoked by the OfS, which defines one of the crucial indicators of good governance as follows:

“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”[4]

One of the projects we discussed was of a retail bank working to improve measures for checking that customers had been appropriately advised when taking out a financial product. The group drew parallels to tasks where unstructured data, such as free text student feedback, needed to be managed in curriculum management processes. We also worked through a project where a bank needed to simplify its quality assurance measures whilst introducing a greater level of consistency and traceability. The intelligent technologies used in all cases were discussed, however the group agreed the importance of not getting too distracted by the particular technologies deployed in each project. Ultimately, it’s no secret that Education is lagging some way behind other sectors when it comes to adopting digital technologies:

Rather, our discussion focused on the principle of ‘digitally led governance’ and how delegates can start to challenge the standard ways of approaching governance questions in their institutions. SUMS Group includes over 60% of UK HE institutions in our membership and we have been supporting organisations to transition away from the cultural norm of problem solving by tinkering with the size and shape of teams. We’re working with the sector to think more broadly about solutions that can be found in technology. In our experience, this thinking is all too often left to those with ‘IT’ in their job title. Our discussion at the conference echoed the challenge to move toward a culture where all roles, irrespective of their proximity to their institution’s IT department, understand that human interventions don’t always represent the most financially and operationally sustainable solutions. Some of this depends on strategic levers being in place to ensure teams can trigger technical change and insight to support their daily challenges, but institutions cannot get away from the cultural and workforce transformation that also needs to happen to cement more digital ways of thinking and working.

Our discussion at the conference therefore went full circle; from technology back to people! There are a lot of interesting technologies being implemented to improve governance practices outside the sector, but what is really fascinating is the cultural and people change accompanying these deployments. Yes, there is much to be done to improve the quality and prevalence of technology in our sector and this will require investment and careful planning. However, in readiness for a more complex technical landscape, there is an equally significant challenge around culture, strategy and ways of working which the most effective universities have started looking at now. This change of mindset is a pre-requisite for success and the starting point for an institutional readiness assessment. Technology is there to help enable better governance, but it must not be seen as a silver bullet. University governors, executives and managers need to embrace cultural and behavioural change for technology to move the dial on this agenda.

[1] Public interest governance principles – Office for Students

[2] The role of the FCA in a changing regulatory landscape | FCA

[3] Office for Students (OfS) framework document (publishing.service.gov.uk)

[4] Public interest governance principles – Office for Students

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