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Education briefing - Protecting the Independence of the Clerk in College Corporations

  • United Kingdom
  • Education - Briefings

09-06-2021

The Association of Colleges has recently consulted on an updated version of its Code of Good Governance for English Colleges – the AoC Code. The consultation closed on 7 May 2021. Whilst the review is described as “light touch”, important changes are proposed to the provisions of the AoC Code on the independence of Clerks. A more substantive review of the code is planned for 2022, once the implications of the Skills for Jobs White Paper on governance within the sector are clear.

The proposed changes make it explicit that the Clerk or Governance Professional must be permitted to provide independent advice to the Corporation. They also purport to limit the scope for a Clerk to hold any other role within a College which might limit their ability to provide that independent advice or which potentially creates a conflict of interest with the governance role:

The clerk must not be given any other responsibilities within the college that limits their ability to provide independent advice to the board and/or potentially presents a conflict of interest with the clerking role (paragraph 10.53).

The changes shift responsibility from the Clerk to inform the Corporation of any potential conflicts to making the Corporation responsible for not permitting the Clerk to be in a position where potential conflicts may arise in the first place. The amendments rightly emphasise the importance to Corporations of ensuring a Clerk’s independence – sadly there are a number of examples in the sector of governance being impaired by the absence of robust independent advice from the Clerk.

The potential for a conflict of interest where a Clerk holds another role within a College and therefore, the appropriateness of combining the clerking role with other responsibilities, has been much debated. In a significant, albeit shrinking minority of Colleges, it is still common for a Clerk to also be employed by the College in some other capacity and without an obvious impairment of the quality of the governance advice.

There is nothing in the Schedule 4 of the Further and Higher Education Act 1992 which would prohibit a Clerk holding a dual role, requiring as it does only that a College must have a Clerk and for the Clerk’s responsibilities to be set out in the Instrument. Traditionally, College constitutions have defined the role and made it explicit that the Clerk may not also be Principal. There are obviously good reasons why a Clerk could become conflicted if they were to hold any role in the senior executive team – the risks of becoming too close to the executive function are palpable. Arguably, being answerable to senior members of the executive in respect of a more junior role in the College also carries risks of conflicts because of potential fears over the impact on employment from giving advice to the Corporation that may be critical of senior managers.

To date, some measure of protection for the independence of the role has been in place as a consequence of Clerks being appointees of the Corporation and by them being treated as a senior postholders for the purposes of disciplinary and grievance procedures.

If the proposed changes are implemented it begs the question as to whether there will be any circumstances in which a College that adopts the updated AoC Code should permit a Clerk to simultaneously hold another role in the College. The Code does include comply or explain provisions which allow some latitude for Corporations but there would need to be a sound rationale for why the continuance of a dual role is compatible with the spirit of the AoC Code.

Given that the Education and Skills Funding Agency’s expectation is that Corporations either adopt the AoC Code, comply with the Charity Governance Code or have due regard to the UK Corporate Governance Code, it is interesting to contrast the AoC’s proposed approach with the provisions under the alternative codes. Neither the Charity Governance Code nor the UK Corporate Governance Codes are as explicit as the revised AoC Code about the requirements on the Corporation to proactively take steps to avoid conflicts.

In summary, in any case where a Clerk has a dual role, a Corporation should take steps to review its current arrangements and to consider any steps that it would need to take to remain compliant with the updated AoC Code. This will include consideration of the employment law issues that may be associated with changing an employment contract, whether maintaining the status quo is explainable in the light of the particular circumstances of the case and/or whether to adopt an alternative code. The latter option in particular would need careful consideration by the Corporation.