Essential Reading on Governance in Multi Academy Trusts

Essential New Year Reading on Governance in Multi Academy Trusts

2017 looks set to be a year of relentless focus on improving governance in Multi Academy Trusts. Over the past two months a number of excellent resources on governance in Multi Academy Trusts have been published. In case you missed them amid the seasonal commotion, here is a synopsis of the main points.

DfE Guidance

In January the Department for Education published a new version of the Governance Handbook which applies to all schools, alongside a new Competency Framework for Governance.

The Governance Handbook is an essential resource for all those involved in governance of education institutions. It outlines the roles and responsibilities of trustees and governors, their legal duties and provides useful links to further resources.

The new edition has been re-structured around a new clearer articulation of the six key features of effective practice and should be read alongside the new Competency Framework, which describes the knowledge, skills and behaviours needed for effective governance.

The DfE believes effective governance is based on six key features:

Strategic leadership that sets and champions vision, ethos and strategy.
Accountability that drives up educational standards and financial performance.
People with the right skills, experience, qualities and capacity.
Structures that reinforce clearly defined roles and responsibilities.
Compliance with statutory and contractual requirements.
Evaluation to monitor and improve the quality and impact of governance

The most significant changes to the content within other sections include:

Section 2: Strategic Leadership

There is a new section at 2.3 bringing together material about the board’s role as the key decision-maker.  Stresses that the Board is accountable and responsible for all the decisions made and that executive leaders must operate within the powers and authority delegated to them.

Section 3: Accountability

There is a much stronger emphasis on ensuring financial propriety at 3.4. It stresses that everyone on the Board must have a basic understanding of the financial cycle and the legal requirements on accountability and spending. There are suggested questions for trustees to ask and a greater emphasis on securing value for money, using tools such as financial benchmarking resources providing comparative data around consumables, resources and utility costs (useful links are provided).

Section 4: People Makes clear the new requirement that all those involved in governance schools and academy trusts, must have a Disclosure and Barring Service (DBS) check.

  • New advice at 4.1.4 on conducting ‘informed’ elections in which the expectations of, and credentials required of, prospective candidates are made clear.
  • New sections bringing together material on the important role of the chair at 4.3 and of the professional clerk at 4.4.
  • A new explanation at 4.8 of the risks associated with close family relationships between those involved in governance or between them and senior employees (The requirement to publish a register of business interests, to avoid conflicts of interest and related party transactions).
  • Details of the duty on boards to provide information about individuals involved in governance via the Edubase system at 4.8.

Section 5: Structures

Updated guidance on the role of and distinction between Trustees and Members at 5.2.1. An explicit statement that “the most robust governance structures will have a significant distinction between the individuals who are Members and those who are Trustees.”

  • 5.6 that all boards are required to publish a scheme of delegation on their website to explain their governance arrangements, together with new guidance on what makes an effective scheme of delegation.
  • Updated guidance on MATs at 5.2.2 emphasising that a MAT is a single legal entity and that the buck stops with the Board of Trustees in relation to the performance of all schools within the Trust. A section on umbrella trusts at 5.5.1. Now an explicit statement that the DfE will not approve existing trusts wishing to join an umbrella trust which has powers of intervention or governance over its member schools.

Section 6: Compliance

Confirmation at 6.7 that a designated individual on the board must take leadership responsibility for the organisation’s safeguarding arrangements, which include its Prevent duty. New advice at 6.7.1 on handling allegations of abuse made against other children, including ‘sexting’.

Section 7: Evaluation

Updated content on schools causing concern and on coasting schools at section 7.4, outlining OFSTED’s new approach.

The new Competency Framework for Governance

With a foreword by Sir David Carter, the National Schools Commissioner, the new Competency Framework is designed to help governing boards assess what knowledge, skills and behaviours are needed to govern their school or group of schools, most effectively. The Competency Framework is organised into blocks of ‘who needs to have this’. There are some skills or knowledge that the DfE thinks everyone on the board needs to have, and others that the Chair or ‘at least someone’ on the board will need to have.

The Competency Framework is made up of 16 competencies. The competencies are grouped under the headings of the ‘six features of effective governance’, which are described in the Governance Handbook:

1 Strategic leadership

a) Setting direction
b) Culture, values and ethos
c) Decision-making
d) Collaborative working with stakeholders and partners
e) Risk management

2 Accountability

a) Education improvement
b) Rigorous analysis of data
c) Financial frameworks and accountability
d) Financial management and monitoring
e) Staffing and performance management
f) External accountability

3 People

a) Building an effective team

4 Structures

a) Roles and responsibilities

5 Compliance

a) Statutory and Contractual requirements

6 Evaluation

a) Managing self-review and personal skills
b) Managing and developing the boards effectiveness

However, the guidance emphasises that principles and personal attributes that individuals bring to the board are just as important. All those involved in governance should exhibit the 7 C’s:

Committed – devoting the required time to the role
Confident – of an independent mind, able to lead and contribute to courageous conversations
Curious – an enquiring mind and analytical approach
Challenging  – providing appropriate challenge to the status quo, not taking information at face value
Collaborative – prepared to listen and work in partnership with others
Critical – critical friendship which enables bot challenge and support
Creative – able to challenge convention wisdom and be open-minded

The Framework will help with board performance reviews, identifying training needs, succession planning and induction. It may also help prepare interview questions for prospective trustees and governors.

The new Governance Handbook and Competency Framework can be accessed here.

Multi Academy Trusts – Good Practice Guidance and Expectations for Growth

The DfE published this guidance on establishing and developing a multi academy trust in December.

This guidance provides a framework which helps trusts at all stages of their development learn from other multi academy trusts. It sets out the characteristics of successful academy trusts, and the barriers that they will need to overcome in order to secure expansion and ongoing success. It gives advice on what Regional Schools Commissioners look for when they assess and approve:

  • the establishment of new multi-academy trusts (MATs)
  • plans for growth in existing MATs

It also gives guidance on developing a successful multi academy trust, including advice on:

  • school governance and leadership
  • helping schools improve
  • financial sustainability and risk management

In his foreword Sir David Carter states: “There are at least three core elements that the strongest trusts exhibit. First, a board that contains a wide range of professional experiences that can deliver the dual responsibility of building strategy to deliver great outcomes for children alongside the culture of accountability that is necessary across the organisation. Second, the appointment of an executive leader, typically an executive head or chief executive officer, who is held to account for standards across the schools. Third, the creation and execution of a school improvement strategy that develops and improves the workforce, builds succession and enables the strongest teachers and leaders to influence outcomes for more children.”

He signals clearly the move towards more consolidation of schools into Multi Academy Trusts, as well as more collaboration between and possible mergers of MATs.

“This guidance is intended to support and encourage those trustees and leaders seeking to start a new MAT, as well as those who have a strategic plan to grow the number of schools they are accountable for in the coming years. In simple terms, this is how we intend to build the culture and ethos for this to happen. We want to encourage, support and challenge the best leaders to take responsibility for more schools and to bring their expertise in school improvement to benefit more children… At the start of the 2016/17 academic year we saw more schools than ever enjoying the benefits of working in a MAT, with 97% of schools converting to become academies now joining MATs.”

In looking at system design, the guidance states “the academy system provides greater opportunities for teachers and leaders, which makes it easier to put in place those factors – better teaching, leadership, career development, curricula and accountability – that incontrovertibly drive up standards”. However, interestingly there is also an explicit statement that flies in the face of received wisdom: “The government has also made clear that schools will [still] be able to become or continue as single academy trusts, provided they are successful and sustainable.”

Capacity to Grow

When agreeing whether a MAT has the capacity to grow, or when approving a MAT arrangement, RSCs will want to explore with the trust:

  • the plans for medium and long-term development of the trust and how they build capacity within their trust and their schools;
  • how it intends to support school improvement and whether this is underpinned by a clear school improvement model;
  • what the needs and development challenges are for all the schools within the trust, irrespective of current performance levels;
  • whether the trust’s model of due diligence enables the depth of the operational and strategic challenge to be fully understood; and
  • how the trust will contribute to wider system improvement and develop and retain good links with other MATs, teaching schools and a wide range of stakeholders

Financial sustainability

Addressing concerns about MATs which have expanded too quickly, the guidance stresses the importance of Trusts having strong and sustainable finances. RSCs will want to see evidence that enables them to assess whether:

  • there is sufficient financial expertise to oversee the trust’s financial operations;
  • financial planning is integrated in to the trusts overall strategy for its school(s);
  • the trust’s vision remains deliverable and resilient to operational changes in income, such as changes in pupil numbers or characteristics or the implications of the introduction of a national funding formula. Scenario or sensitivity analysis should be used to evidence this;
  • there are robust contingency plans in place, with clear triggers for enacting these plans; and
  • the accounting officer has sufficient oversight and control of their finances, to enable them to achieve value for money and ensure propriety with public money.

In future, before agreeing that a MAT can expand the number of schools it runs, or a standalone academy can create or join a MAT, RSCs will assess whether:

  • the plans to grow the size of the trust are credible – and that the trust understands that while growth can bring about economies of scale, there are also costs associated with centralising functions. Where a trust’s plans are such that they want to remain small (e.g. below 1,200 pupils for primary trusts and 2,000 for mixed or secondary trusts), the RSC may recognise the financial limitations and be more cautious. They may ask to see more detailed plans, including how the trust’s senior leadership team will be funded from across the schools;
  • plans to secure efficiency savings through economies of scale are realistic and have been benchmarked against other trusts;
  • any central functions are properly costed and sustainable, and that there are clear plans that set out how these functions will be paid for, for example, through a charge or “top-slice” to individual schools within the trust;
  • these centrally delivered functions deliver value for money for constituent schools; and
  • the trust’s financial processes are sufficiently robust to withstand the increased responsibility of the trust, and in particularly the need to ensure propriety and value for money across a wider number of schools.

Risk Management

The guidance states that RSCs will take in to account what is known about the way successful academy trusts manage risk. In particular, they will test whether:

  • the trust has the capacity to fulfil the mandatory requirements set out in the Academies Financial Handbook especially if, having consulted with the Education Funding Agency (EFA), they know that it has not fulfilled those responsibilities in the past;
  • there are effective procedures in place to identify, monitor and mitigate at both school and trust level – risk management is not a box-ticking exercise;
  • its scheme of delegation makes clear what risks are managed at what level so no issues ‘fall between the gaps’;
  • the trust has a clear idea of how the way it manages risk may need to change as the trust grows, and has made a balanced assessment of the risks expansion and opportunities might pose to its existing schools;
  • the trust has access to appropriate due diligence expertise so that they can be confident the trust knows what it is taking on (both in terms of benefits and risks) when an additional school joins it; and
  • the trust has capacity to manage the estate for which they are responsible.

This guidance provides some welcome transparency and consistency around the ways RSC’s will take decisions on whether to allow Multi Academy Trusts to expand in future.

The NGA’s ‘Welcome to a Multi Academy Trust’

The National Governors Association’s long-awaited guide to governance in Multi Academy Trusts was published in November 2016. The 100 page booklet contains a useful overview of academies which will be a good resource for induction of new trustees. The guide is organised into a series of sections covering:

  • The legal role of trusteeship: introduction to governance in a Multi Academy Trust – the relationship between trustees and local governing bodies (or ‘academy committees”) and the importance of the Scheme of Delegation, the importance of recruiting for skills and carrying out regular performance evaluations.
  • The culture and ethos of the trustee board
  • What makes governance in a MAT different?
  • The business of the board- how trustee meetings should be organised, as well as meetings of members, the vital role of the Chair
  • How schools work: curriculum, assessment, safeguarding, complaints and exclusions
  • Knowing your schools: how to tell if your trust is doing well, chief executive reports, visiting school and performance data
  • Staffing: senior executive team, staffing structures and HR
  • Fiduciary functions: the importance of maintaining financial propriety, accounts and managing the budget and insurance
  • Relationships with external agencies: OFSTED, the Charity Commission, Department for Education, EFA and Regional Schools Commissioners
  • Growing the Trust: is there an optimum size for a MAT? Getting it right and routes to expansion
  • Glossary of education terminology

Priced at £12 for non-members and £6 for NGA members, the guide can be purchased here.

ASCL Guidance

The Association of School and College Leaders (ASCL) has also published three linked guidance notes, under the theme “Staying in Control of Your School’s Destiny”. The first instalment in October “Considering forming or joining a group of schools” examines the benefits of schools working in larger groups, with a particular emphasis on the implications of being part of Multi Academy Trust, the governance structures which are available and the factors which will be critical to success. A useful checklist is provided for schools considering their options for the future.

‘Joining a Multi Academy Trust’ published in November, outlines the process for seeking out a partner Multi Academy Trust to join. It stresses the importance of both partners carrying out due diligence on each other to ensure that their ethos, vision and values are aligned, and that both parties know what they will be taking on in terms of leadership, school performance, financial stability and liabilities. “Effective due diligence is essential in ensuring you find out as much as you possibly can about any MAT you are considering joining. MATs will also undertake due diligence into schools that are considering joining their trust”. Recognising the crucial importance due diligence when joining a Multi Academy Trust for busy education leaders, Elderflower Legal has launched a new fixed price product EduDiligence™ – find out more.

The third paper in the series ‘Forming a Multi Academy Trust’ sets out the process towards setting up a MAT, including reasons for forming your own Multi Academy Trust, how to choose the right partners, things to think about when scoping your new MAT, and how to undertake due diligence on your potential partners, as well as the importance of engaging and consulting with stakeholders before the decision is taken.

Some suggested key strategic questions for leaders of prospective MATs to ask themselves include:

  • What do you hope to achieve in the next three to five years?
  • What do you want for the children and young people in your schools?
  • How will you work together to achieve your aims?
  • Do you have a sense of how big you would like your MAT to grow? (Think in terms both of numbers of schools and numbers of pupils.)
  • Will this result in an organisation which is educationally and financially sustainable?
  • What is your attitude to the risks that new organisations have to take, such as creating leadership capacity to grow the organisation?
  • What capacity will you need to take on struggling schools? How will you make sure you don’t over-stretch yourselves?
  • What do you think will be your biggest challenges in your first few years, and how will your strategy mitigate these?
  • What central support do you plan to offer your schools? Where might this be located, and will all the schools in the proposed MAT be able to access it?

The ASCL guidance will be particularly helpful to schools beginning the journey of considering whether to form a new academy trust or join an existing Multi Academy Trust. The guidance can be accessed here.

 


Mark Johnson is an independent legal and governance specialist working with academy trusts, schools and not for profits to help them succeed. He serves as the company secretary of a MAT in Cheshire and independent audit committee member of a large MAT in Manchester. Get in touch today or find out more at elderflowerlegal.co.uk or call 01625 260577.

The information above is provided for general guidance only and is not a substitute for professional advice which may depend on your specific circumstances. If you would like to be kept up to date on more topics like this, then why not sign up to receive our regular newsletter.

Do you understand your responsibility for safeguarding children?

Do you understand your responsibility for safeguarding children?

Recent disturbing revelations about the horrific abuse suffered by young players in football, as well as the continuing wide-ranging inquiry into historical sex abuse have thrown the spotlight firmly on the role and responsibility of trustees, directors and managers of sports clubs, charities, social enterprises and businesses, as well as their front-line staff and individually regulated professionals, in detecting and preventing abuse and understanding their responsibility for safeguarding children.

It is becoming evident that adults within some organisations were aware of abuse taking place, or at least of concerns about members of staff or those associated with the organisation, but failed to act. In some cases, leaders within the organisation failed to investigate concerns thoroughly enough and, at the extreme, they may even have sought to hide or cover up the abuse.

Whether you are a trustee, director, officer, manager, paid professional or volunteer, if your club, association, charity or business works with or provides services to children and young people, you will have statutory responsibility for safeguarding children and their welfare. You must understand what your organisation’s and your personal responsibilities are.  If you fail to fulfil your responsibility for safeguarding children, you may open up your organisation and yourself to significant liability. This could take the form of a civil claim for damages for assault or negligence, based on a breach of a duty of care owed to children under your supervision, your organisation’s vicarious liability for the acts of its staff and volunteers; or a criminal prosecution could be brought for statutory offences related to failure to carry out Disclosure and Barring Service (DBS) checks on staff, failure to notify DBS of known incidents involving a member of staff,  health and safety breaches (including failure to maintain a safe system of working), or in extreme cases where there is a cover up, failure to report an arrestable offence, or conspiracy to pervert the course of justice. Directors and officers may be personally liable for certain offences alongside the organisation, if the offence has been committed with their ‘consent or connivance’. Involvement in such proceedings could be very costly, attract adverse media coverage and have a devastating impact on your reputation. Insurance policies may not assist, since most policies will typically exclude liability for deliberate acts of abuse committed by staff or volunteers.

The Safeguarding System

Whilst local authorities, through their children’s social care teams, play the lead role in safeguarding children and protecting them from harm, everyone who comes into contact with children and families has a role to play in protecting them. Children includes everyone under the age of 18.

‘Safeguarding’ the welfare of children is defined as:

  • protecting children from maltreatment;
  • preventing impairment of children’s health or development;
  • ensuring that children grow up in circumstances consistent with the provision of safe and effective care; and
  • taking action to enable all children to have the best outcomes.

Sections 10 and 11 of the Children Act 2004 place duties on a range of organisations and individuals to ensure their functions, and any services that they contract out to others, are discharged having regard to the need to safeguard and promote the welfare of children. Various other specific statutory duties also apply to other organisations working with children and families.

More generally, Article 3 of the United Nations Convention of the Rights of the Child, which is part of UK law, provides that all children have the right to have their welfare considered paramount in all decisions taken about them. Article 12 provides for the right of the child to be heard and Article 19 provides for the child’s right to be protected from abuse and neglect.

Safeguarding is everyone’s responsibility

Everyone who works with children – including teachers, GPs, nurses, midwives, health visitors, early years professionals, youth workers, police, NHS staff, nursery staff, crèche volunteers, scout leaders, holiday camp staff, voluntary and community organisations, sports club staff, freelance coaches – has a responsibility for keeping them safe. No single staff member can have a full picture of a child’s needs and circumstances and, if children and families are to receive the right help at the right time, everyone who comes into contact with children has a role to play in identifying concerns, sharing information and taking prompt action.

Organisations working with children must provide training for their staff on how to identify and respond early to the needs of all vulnerable children, including: unborn children; babies; older children; young carers; disabled children; and those who are in secure settings.  There is a particular need to be alert to the potential need for early help for a child who:

  • is disabled and has specific additional needs;
  • has special educational needs;
  • is a young carer;
  • is showing signs of engaging in anti-social or criminal behaviour;
  • is in a family circumstance presenting challenges for the child, such as drug or alcohol abuse, mental health problems and domestic violence;
  • has returned home to their family from care; or
  • is showing early signs of abuse and/or neglect.

Safeguarding issues can also manifest themselves via peer on peer abuse. This is could include bullying (including cyberbullying), involvement with gangs, gender based violence/sexual assaults and sexting. Specific duties apply to children thought be at risk of exposure to extremism or radicalisation under the ‘prevent’ duty. (A duty to refer children and young people who show active opposition to fundamental British values, including democracy, the rule of law, individual liberty and mutual respect and tolerance of different faiths and beliefs to the Channel programme); and certain professionals working in health, social care or education settings have a duty to report suspected female genital mutilation (FGM).

Staff must be trained to identify the symptoms and triggers of abuse, harm and neglect, to share that information and work together to provide children and young people with the help they need.

Section 11(4) of the Children Act 2004 requires each person or body to which the duty applies to have regard to any guidance given to them by the Secretary of State. The latest statutory guidance is entitled Working Together to Safeguard Children 2015 and is intended to provide a national framework within which agencies and professionals at local level – individually and jointly –work together to safeguard and promote the welfare of children.

Minimum Requirements

Organisations who work with children must have in place certain minimum arrangements that reflect the importance of safeguarding and promoting the welfare of children, including:

  • a clear line of accountability for the commissioning and/or delivery of services designed to safeguard and promote the welfare of children;
  • a senior board level lead who takes leadership responsibility for the organisation’s safeguarding arrangements;
  • a culture of listening to children and taking account of their wishes and feelings, both in individual decisions and the development of services;
  • Disclosures – staff should know what to do if a child tells them they are being abused or neglected. Staff should know how to manage the requirement to maintain an appropriate level of confidentiality, whilst at the same time liaising with relevant professionals such as the designated safeguarding lead and children’s social care. Staff should never promise a child that they will not tell anyone about an allegation, as this may ultimately not be in the best interests of the child;
  • clear whistleblowing procedures to notify senior management if there are concerns about the behaviour of colleagues, which are set out in staff training and codes of conduct. If internal channels fail, the NSPCC whistleblowing helpline on 0800 028 0285is available for staff who do not feel able to raise concerns regarding child protection failures internally. There should be a culture that enables issues about safeguarding and promoting the welfare of children to be addressed;
  • a Child Protection Policy and procedures which set out clearly how to spot the signs of abuse or harm, the processes for sharing information with other professionals and agencies and the circumstances in which concerns should be reported to a designated internal lead or a referral made to local authority children’s services here, or in urgent cases immediately to the Police and/or the NSPCC hotline on 0808 800 5000;
  • a designated lead for safeguarding (or, for health provider organisations, named professionals). Their role is to support other staff in their organisation to recognise the needs of children, including rescuing them from possible abuse or neglect. These roles should always be explicitly defined in job descriptions. The post holder should be given sufficient time, funding, supervision and support to fulfil their child welfare and safeguarding responsibilities effectively;
  • safe recruitment practices for individuals whom the organisation will permit to work regularly with children, including policies on when and how to check the identity of an applicant and obtain a criminal record check from the Disclosure and Barring Service and keep it up to date. More information is available on the DBS website. Certain employers can be liable to prosecution and a fine of up to £5,000 if they allow staff to have unsupervised access to children without undertaking the necessary check.
  • appropriate supervision and support for staff, including undertaking regular safeguarding training to keep up with developments in the law and best practice in what is a fast-changing environment. Employers are responsible for ensuring that their staff are competent to carry out their responsibilities for safeguarding, promoting the welfare of children and creating an environment where staff feel able to raise concerns and feel supported in their safeguarding role;
  • staff should be given a mandatory induction, which includes familiarisation with child protection responsibilities and procedures to be followed if anyone has any concerns about a child’s safety or welfare;
  • all post holders should have regular reviews of their own practice to ensure they improve over time; and
  • clear policies must be in place for dealing with allegations against people who work with children. Such policies should make a clear distinction between an allegation, a concern about the quality of care or services or a complaint. An allegation may relate to a person who works with children who has:
    • behaved in a way that has harmed a child, or may have harmed a child;
    • possibly committed a criminal offence against or related to a child; or
    • behaved towards a child or children in a way that indicates they may pose a risk of harm to children.
  • a staff behaviour policy (or code of conduct) which should among other things include – acceptable use of technologies, staff/children relationships and communications including the in appropriate use of social media.
  • Appropriate record-keeping and document retention policies concerning any allegations or referrals made.
  • The Safeguarding Vulnerable Groups Act 2006 (SVGA) places a legal duty on certain employers and ‘personnel suppliers’ to make a referral to the Disclosure and Barring Service of any person who has:
    • harmed or poses a risk of harm to a child or vulnerable adult;
    • satisfied the harm test; or
    • received a caution or conviction for a relevant offence.

This enables the central DBS record to be updated so that subsequent employers are aware of previous incidents. A regulated activity provider is an organisation or individual that is responsible for the management or control of ‘regulated activity’, paid or unpaid, or a person who makes arrangements for people to work in that activity. This will usually be an employer or a voluntary organisation. Clear-cut examples of a ‘regulated activity provider’ include:

  • providers of health and social care services providing care, supervision and advice to children
  • schools, nurseries, crèches and Further Education colleges that provide education to children
  • a specialist educational establishment that provides education to vulnerable groups, such as alternative education.

However, it could also extend to any form of teaching, training, instruction, care or supervision of children (always including any such activities involving overnight stays), as well as driving vehicles used for conveying children, or even moderating an online forum to which children have access. It is fair to say that the law is not very clear on precisely where the boundary is on regulated activities. In seeking to exempt some volunteers who have less frequent contact with children (less than once a week or less than four times in any 30 day period), or those who work ‘under the regular and day to day supervision of others’, it seems an unfortunate gap has been created which could be exploited by serial abusers, who could move on to a new setting without incidents having been recorded. A regulated activity provider can also be a person who simply manages volunteers in a regulated activity position, such as a scout leader or manager in a charitable organisation.

A ‘personnel supplier’ is an employment agency or business that makes arrangements with a person to find them employment. Or they may place that person with other employers. A personnel supplier can also be an educational institution which arranges for its students to undertake work experience placements as part of their studies.

The importance of sharing information and not turning a blind eye

Early sharing of information is often the key to providing effective early help where there are emerging problems. Indeed, sharing information can be essential to put in place effective child protection services. High profile Serious Case Reviews (SCRs) have shown how poor information sharing in the past has contributed to the deaths or serious injuries of children. Fears about sharing information cannot be allowed to stand in the way of the need to promote the welfare and protect the safety of children.

The seven golden rules to sharing information

  1. Remember that the Data Protection Act 1998 and the Human Rights Act are not absolute barriers to justified information sharing, but provide a framework to ensure that personal information about living individuals is shared appropriately.
  2. Be open and honest with the individual (and/or their family where appropriate) from the outset about why, what, how and with whom information will, or could be shared, and seek their agreement, unless it is unsafe or inappropriate to do so.
  3. Seek professional advice if you are in any doubt about sharing the information concerned, without disclosing the identity of the individual where possible.
  4. Share with the informed consent of the alleged victim where appropriate and, where possible, respect the wishes of those who do not consent to share confidential information. You may still share information without consent if, in your judgement, there is good reason to do so, such as where their safety may be at risk. You will need to base your judgement on the facts of the case. When you are sharing or requesting personal information from someone, be certain of the basis upon which you are doing so. Where you have consent, be mindful that an individual might not expect information to be shared.
  5. Consider safety and well-being: Base your information sharing decisions on considerations of the safety and well-being of the individual and others who may be affected by their actions.
  6. Necessary, proportionate, relevant, adequate, accurate, timely and secure: Ensure that the information you share is necessary for the purpose for which you are sharing it, is shared only with those individuals who need to have it, is accurate and up-to-date, is shared in a timely fashion, and is shared securely.
  7. Keep a record of your decision and the reasons for it – whether it is to share information or not. If you decide to share, then record what you have shared, with whom and for what purpose.

What happens if a referral is made?

Within one working day of a referral being received, a local authority social worker should make a decision about the type of response that is required and acknowledge receipt to the referrer. The referrer should actively chase up if they have not received a response. For children who are in need of immediate protection, action must be taken by the social worker, or the police or NSPCC if removal is required, as soon as possible after the referral has been made to local authority children’s social care.

Final thoughts

Trustees, directors and officers must take leadership responsibility for putting in place the right systems and policies for tackling abuse and protecting the welfare of children. The courts have been very willing to expand the boundaries of corporate responsibility for harm caused to children and it is likely that new specific criminal offences allowing individuals and organisations to be prosecuted for ‘failure to report’ concerns or a ‘failure to act’ may emerge in the wake of current inquiries. A Government consultation on introducing new offences closed on 13 October 2016. It is essential that organisations act now rather than face catastrophic consequences by getting it wrong.

 


Mark Johnson is a specialist legal and corporate governance consultant working with charities, social enterprises, academy trusts and service businesses. If you need help managing risk, reviewing policies and procedures or in reviewing any aspect of your governance, please get in touch today. Find out more at elderflowerlegal.co.uk or call 01625 260577.

The information above is provided for general guidance only and is not a substitute for professional advice which may depend on your specific circumstances. If you would like to be kept up to date on more topics like this, then why not sign up to receive our regular newsletter.

Due Diligence for Schools Joining a Multi Academy Trust – Part 3

In Part 1 and Part 2 of this post on due diligence for schools joining a Multi Academy Trust, I examined the strategic, leadership, workforce and financial issues of due diligence when schools join a multi academy trust. In this final Part 3, we look at commercial and asset-related issues.

Commercial

How are support services organised at present in the school which is joining the Multi Academy Trust?

Will any existing contracts be taken over by the MAT or need re-organising e.g. catering, cleaning, statutory testing, property maintenance, photocopiers, transport and vehicles, IT, telecoms? You should obtain copies of and review any agreements with suppliers or service users.

Is the school part of a PFI agreement? If so, what are the terms of this, and can some of the liability and responsibility remain with the local authority? This can be an area of high risk on which professional advice will be needed.

Are there existing building projects, grant conditions, partnerships or collaborations with other schools or outside bodies in place which could be inherited by the MAT?

Does the school own any intellectual property rights (e.g. logos, copyright, design rights or trademarks, internet domain names) which need to be transferred over?

Any pending law suits, claims or complaints which could give rise to liabilities in the future e.g. disputes with suppliers, safeguarding issues, health and safety, data protection, equality and human rights commission, breach of public procurement/ tendering requirements?

What insurances are in place at present and would they cover any issues identified post-transfer (e.g. an employment claim)?

Any permits or licences that need to be replaced or put in place post-transfer (e.g. copyright licensing agency, music performance, event licences)?

The MAT will enter into a Commercial Transfer Agreement (CTA) with the current owner of assets and contract holder (usually the Local Authority or Voluntary Aided School Governing Body). It has become increasingly common for local authorities to demand a contribution to their legal costs of negotiating and concluding this agreement and the Lease of the site. Have you included this in your project budget and perhaps stipulated deadlines and conditions of your own in return for this payment?

Asset Condition

What state are the school buildings in? What kind of backlog maintenance liabilities are there, and what is the likelihood of significant capital expenditure in coming months and years, e.g. will heating systems, roof repairs, water tanks, windows need repairing? Can the current owner be persuaded to fund/ carry out any works pre-transfer?

Who owns the school buildings and surrounding land and will this be transferred cleanly and effectively to the MAT? Are there any outstanding statutory transfers between public bodies not fully completed? Is the title to the land correctly registered at HM Land Registry – if not, consider asking the existing owner to tidy this up pre-transfer to avoid delays or problems if the title deeds cannot be located.

Watch out for thorny issues such as shared use of outdoor space, part of the premises leased to an external organisation (such as a private nursery provider or leisure operator), accommodation provided to school staff, which may be subject to protected tenancies making it difficult to remove the occupier and possibly leading to a costly dispute.

Have there been any significant building works recently- were all necessary consents and approvals obtained for these (e.g. building regulations and planning). Did the contractor provide a warranty? Have solar panels been installed on the roof- if so, who owns them and what contracts were put in place at the time?

IT systems- evaluate the age and utility of the current systems -are they fit for purpose? What do managers and staff think of the current systems and support service?

Who owns the equipment? Are there third party software licences which may need to be renewed after the transfer?

Have data security issues been considered? How will legacy equipment be disposed of securely (no data back-up tapes or machines found in a skip!) What will happen to the joining school’s website post-transfer?

Final thoughts

Due diligence is a vital part of any acquisition or merger of schools into a MAT. Handled sensitively and proactively it can lay the foundations for creating genuine ‘marriage value’ by allowing each party to get to know each other, explore the respective strengths and weaknesses of the other and find real opportunities to improve the life chances and attainment of pupils across all the schools involved. Contrary to popular belief, it is not a rigid process designed to unearth ‘dealbreakers’. Neither is the process  an exercise in box-ticking: it needs to be a dynamic and living one deploying a range of skills and a healthy dose of emotional intelligence. Addressing soft issues such as cultural compatibility and management succession can be just as important as hard issues, such as legal and financial aspects. Professional advice from advisers familiar with the sector can provide very valuable intelligence and support. Remember the maxim ‘due diligence is cheap, litigation is not’. Leaders need to be as sure as they can be before taking the plunge to merge their schools. As the old saying goes, ‘marry in haste, repent at leisure’.

Find out more about our Due Diligence Service here.

 


Mark Johnson is a highly experienced independent solicitor & chartered company secretary helping schools and academies with conversions, creation of MATs, legal and governance issues. We can help your academy to flourish. Find out more at elderflowerlegal.co.uk.

If you would like to be kept up to date on more topics like this, sign up to receive our regular newsletter.

Due Diligence for Schools Joining a Multi Academy Trust – Part 2

In Part 1 we examined the purpose of due diligence when a school joins an academy trust. In this Part 2 we look at workforce aspects and financial due diligence.

Workforce

Payroll costs typically account for 75-80% of a schools’ expenditure (DfE, 2013) so this is obviously an area to pay careful attention to. When a school joins a MAT, normally the MAT is the legal entity which will become the employer of the staff. In a community school, the existing employer will usually be the local authority and so the HR department of the authority will have a key role to play in providing information about the workforce and smoothing the transition. However, in voluntary aided schools it is usually the governing body that is the employer. Even in some maintained schools, the governing body may be the legal employer of certain staff (e.g. premises assistants, community workers, nursery staff). This is a trap to watch out for since it is the existing employer that has legal duties to comply with.

The new joiner school will want to understand what will happen to its staff when they join the group. Under the new structure, who will have the power to suspend staff, appoint performance management reviewers, undertake threshold assessment or exclude pupils?

The MAT, on the other hand, will be interested in the profile of the staff it will be taking on, and the associated payroll costs and liabilities. The transfer of teaching and support staff will be covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’) and the contractual terms of the Commercial Transfer Agreement (CTA). The practical effect of this is threefold:

  • The new employer inherits the contracts and payroll costs (including pension entitlements) of the staff who transfer; the ability to make changes to employment contracts or release staff is very limited and requires specialist advice.
  • The current employer and new employer need to inform staff and consult with them about the transfer arrangements – failure to do so can result in a financial penalty.
  • Any existing grievances or claims relating to the staff transfer to the new employer and become their problem to manage.

Remember that TUPE can also apply to staff employed by external contractors. So, if the joining school has a contract for maintenance or cleaning with an outside provider with staff who spend most of their time servicing that location, and the intention is that these functions will in future be performed in-house by the MAT, these staff may also end up transferring onto the MAT payroll as well.

Some key questions to probe:

  • Obtain an organisation chart and biographies of key staff. Check historical and projected headcount. Any recent changes of leadership or restructuring?
  • Details of all staff, including date of birth, age, date of starting employment, length of service, salary, benefits, notice period, pension details.
  • Are appropriate contracts in place for all staff? Arrange to review a sample. Any consultants or self-employed contractors who regularly provide services?
  • Have any verbal assurances or agreements been made with staff outside of their formal contract?
  • Are personnel records up to date and securely stored? Will they be handed over on the transfer date?
  • Are payroll records up to date and complete? Have all necessary deductions been made and accounted for to HMRC and others? Do the figures tally with the contractual entitlements?
  • What are the figures for staff turnover? Are there any pending disciplinary or grievance investigations? Have any staff been dismissed recently?
  • Details of sickness records, employees on maternity leave or secondment.
  • How will occupational health support be provided in future?
  • How will absence management be dealt with post-transfer?

Stakeholders

Both the new joiner and the MAT will have a range of stakeholders whose views and attitudes can shape the future success of the integrated organisation. These will include parents and carers, pupils, former pupils, the staff, the local authority, external sponsors or foundations (such as the local diocese in the case of religious schools), local residents, local media, the Regional Schools Commissioner. It is important to map out these stakeholders, solicit their views and decide how best to consult with them and keep them informed about future plans. What are their hopes, fears and dreams for the future? A stakeholder communication plan should be drawn up. Digital communications and social media could play an important role in doing this cost-effectively. Surveys, press reports and Google searches may produce useful insights.

Financial

Financial due diligence should determine the current financial position, as well as identifying any support or training needed for managers going forward. New joiners will need to understand how the ‘top slice’ deduction to their school budget to pay for central support services will be applied and whether it represents value for money. Typical rates can vary from 3% to 5%, in some cases even 7%. Are the service levels to be expected from central support services in return for this deduction clearly documented?

Typical areas requiring examination will include:

  • Income/ Expenditure Budget reports and cashflow projections
  • Summary of month end bank and cash book position for current year and last two years, explanation of variances and major inflows/ outflows
  • Five-year financial forecast for the school. Are assumptions realistic? Particularly with respect to pupil numbers, which is ultimately the key financial driver.
  • Any negative balances, deficits or outstanding loans (e.g. for capital projects funded by local authority, Priority Schools Building Programme or Targeted Basic Need)?
  • Any grant funding with restrictive conditions or claw-back provisions (e.g. for sports facilities)?
  • Details of revenue generating activities – e.g. room or outdoor space hire, paid-for services.
  • Any significant debtor balances?
  • Any significant off balance sheet liabilities (e.g photocopier leases or vehicle leases)?
  • Any VAT or corporation tax issues?
  • Any pension fund deficit?
  • How is payroll currently organised? Do all staff have up to date contracts?
  • How is banking currently organised? Who are the signatories on accounts?
  • What are the financial controls and checks?
  • What are the main risks facing the organisation? Are these documented in a risk register?
  • Discussions with the relevant section of the Local Government Pension Scheme should take place early in the process to find out their methodology regarding transfer values, which will have an effect on future employer contribution rates.
  • What accounting systems and current reporting arrangements are in place?
  • The new joiner will be keen to see the last 3 years’ audited accounts for the MAT and the auditors’ management letters

The most common areas of fraud in academies identified by the National Audit Office (2015) were:

  • Inappropriate expenses claims or undocumented salary increases
  • Inappropriate or unauthorised purchases (e.g. luxury goods, alcohol, cars)
  • Non-compliance with procurement and tendering rules for major purchases or building projects
  • Related party transactions (i.e. buying from business connected with management or governors)

Next time –  In Part 3 of this post, we will look at commercial and asset-related issues of due diligence for schools joining an academy trust.

Find out more about our Due Diligence Service here.

 


 

Mark Johnson is a highly experienced independent solicitor & chartered company secretary helping schools and academies with conversions, creation of MATs, legal and governance issues. We can help your academy to flourish. Find out more at elderflowerlegal.co.uk.

If you would like to be kept up to date on more topics like this, then why not sign up to receive our regular newsletter.

Due Diligence for Schools Joining a Multi Academy Trust – Part 1

Due Diligence for Schools Joining a Multi Academy Trust

The Department for Education has signalled clearly that the future development of academies lies in the consolidation of more schools into multi-academy trusts (MATs). Primary schools, in particular, will be encouraged to join existing clusters and groups of schools. In future, we may see schools deciding to leave one MAT and join another, where the grass is greener – a bit like footballers at transfer season! The decision of a single school to join a MAT family of schools requires careful thought on both sides. For the new joiner school, (which could be a community school, a church school or a standalone converter academy), the headteacher and governors will need to be satisfied that the match is a good one, the cultures are aligned and that operating at scale will bring the expected benefits for pupils. Equally, the board of the MAT will need to be satisfied that the school they are ‘acquiring’ or partnering with will fit well with the aims and ethos of the group, will not create unmanageable risks or liabilities for the future, nor de-stabilise the group as a whole. Both partners in the relationship need to undertake some detective work and analysis before signing on the dotted line. The technical term for this exercise is ‘due diligence’.

In our work with academy converters and MATs, we often find due diligence is often not given the priority and resources it deserves. In the wider corporate sector, research has found that 70% of mergers and acquisitions fail to deliver the expected benefits (IoD, 2012). The reasons most often cited for failure are (1) misguided strategy in pursuing the merger (e.g. ‘empire building’ or hubris) (2) overly optimistic expectations and (3) failure to manage the integration process properly. It is important that leaders of both parties spend quality time on this aspect to discharge their duty to promote their organisation’s best interests and enhance the chances of success.

Purpose of due diligence

Due diligence is the process by which the parties gather information about each other to ensure the integration process proceeds smoothly. In particular, it is used to identify risks, liabilities, cultural differences and practical issues that may cause difficulties later. The key objectives are:

  • To test the strategic rationale for the tie-up: will it improve the life chances and attainment of pupils and is it really financially and operationally attractive for both sides? What are the prospects for the future? Do the partners have the capacity and capabilities to pull it off?
  • To inform negotiations, identify liabilities and make sure the legal documents pick up risks and allocate them appropriately by using warranties and indemnities (legal clauses which require one party to compensate the other if a risk materialises and costs are thereby incurred). The general rule is that liabilities whose origin is pre-transfer belong to the transferor (local authority and/or diocesan trustees), and those whose origin is post transfer belong to the transferee (the MAT).
  • To lay the foundations of the future integrated organisation and build its culture. The process should combine an ‘outside in’ approach with an ‘inside out’ approach to understand the schools’ relative position in the local education system, as well as understanding the internal capabilities, strengths and weaknesses.
  • To examine broader issues of culture, systems and processes, management structures, future opportunities and business plans.

Is there a framework for due diligence?

In our work with academies, we are often asked about the best way to approach due diligence when a new school is joining a MAT. Effective due diligence needs to look at a range of factors to form a complete picture. It is not just about examining the accounts of the organisation, reading the last OFSTED report or even reviewing the staff list. Ideally, it requires a project team of people with different perspectives to pick up both hard and soft issues, the nuances vital to successful integration. Much of the information will come from interviews with open ended questions. As a mentor of mine once said: “Ask the question. Shut up. Listen”. Using two interviewers, one to listen and the other to observe body language can be useful. This is our suggested roadmap for success.

Strategy

Start with ‘Why?’ For the new joiner, what is in it for you by joining a larger group? Have you clearly articulated the list of benefits you expect to get out of the ‘merger’ and communicated these explicitly to your prospective partners (for example, more funding and resources, enhanced resilience, better support services, staff training, enhanced career opportunities)? Are they documented somewhere so you can monitor progress and hold your partner to account later? For the acquiring MAT, is it part of your strategy to grow by acquiring new schools? Do you genuinely have the capacity, resources and support systems to absorb and nurture the staff team, pupils, buildings, contracts and liabilities you will be taking on?

What does this particular school bring to the party, as compared to others you could work with? Benefits for the MAT might include, securing your future enrolments, access to more funding, spreading overheads to achieve economies of scale, better preparation of pupils for secondary school life, enhanced opportunities for income generation. Have you clearly communicated to the new joiner the ethos, culture and behaviours expected of those joining your MAT? Have they explicitly accepted them?

Performance

Both parties need to understand where the other currently stands at the moment in performance terms.

Key questions to consider might be:

  • What is the scope of educational activities? How has the organisation developed and what is the rate of expansion?
  • Is there a documented vision, mission, values, strategy and objectives? How are they performing against these at present?
  • What are the achievement levels of pupils – gain an overview of attendance, attainment and the progress of pupils within the schools
  • How is the learning rated for pupils with SEN, disabled, BME groups and looked after children?
  • How is the quality of teaching rated?
  • How is attainment and progress measured and rated?
  • Quality assurance – how well does the MAT know the performance and the strengths and weakness of its academies?
  • What are the procedures for challenging individual schools and identifying the support they need;
  • How coherent and adequate is the model for providing school improvement support – whether through MAT specialist staff, external consultants, academies in the group, other schools or a mix of these approaches?
  • What do the latest OFSTED reports say and are the areas identified for improvement and action being addressed?
  • For the MAT, what are the critical success factors and KPIs that you will use to measure performance of schools joining the group? Are these explicitly clear, (e.g. ‘all our schools are expected to be rated good or outstanding by OFSTED within 2 years of joining the MAT’)

Leadership & Governance

Leadership and governance will be critical to future success. How would you rate the quality of the MAT Board? Is there a good mix of skills and experience? Do trustees actively challenge and question the management team or do they rubber stamp decisions? Can you see the minutes of the MAT Board meetings and committees? Have any performance evaluations been carried out for the Board and can you see them?

What do the last two OFSTED reports say about leadership, management and quality of governance? What governance issues is the Board struggling with at present?

How will governance be organised after the transfer? What roles will the governors of the new joiner play after the transfer? Will any of them be invited to join the MAT board or will they function as a Local Governing Body with some delegated powers?

Review the proposed Scheme of Delegation – what functions will actually be devolved to the local governing body and which will be retained by the MAT? In what circumstances could the delegation be suspended?

Are role descriptions of the SMT, governors and key staff clearly documented so it is clear who is responsible for what?

Does the MAT have a full suite of up to date policies and procedures in place and how do they work in practice?

Can you be confident that the organisation has applied the highest standards of propriety and internal control to avoid reputational damage? Do they manage board members’ and the management team’s conflicts of interest properly and avoid ‘related-party transactions’ (e.g. awarding contracts to a relative’s business)? Consider reviewing the register of business interests and board minutes to check this. Are you satisfied that the organisation is transparent in all its dealings?

Next time – In Part 2 of this post, we will examine the workforce issues and financial aspects of due diligence.

Find out more about our Due Diligence Service here.


Mark Johnson is a highly experienced independent solicitor & chartered company secretary helping schools and academies with conversions, creation of MATs, legal and governance issues. We can help your academy to flourish. Find out more at elderflowerlegal.co.uk.

If you would like to be kept up to date on more topics like this, then why not sign up to receive our regular newsletter.

Health & Safety Duties for Directors

What are the main duties of Directors under Health & Safety laws?

Health and safety is integral to success. Board members who do not show leadership in this area are failing in their duty as directors and their moral duty, and are damaging their organisation.”   Health & Safety Executive 

The main duties for directors are as follows:

  1. The organisation must appoint a competent person to help meet the health and safety duties: someone with the necessary skills, knowledge and experience to manage health and safety across all the organisation’s activities– i.e. not just on the premises but also when undertaking off-site trips and activities.
  2. Ensure you have an appropriate health and safety policy in place which details how you will manage health and safety. This should detail who does what, when and how.
  3. Undertake an appropriate risk assessment. Risk assessments will identify potential risks and then identify reasonable steps to control those risks. You should record the findings and then start to implement the control measures.
  4. Keep up to date with Health and Safety Executive guidance (e.g. on specific hazards and activities). There needs to be a very good reason for a failure to adhere to this guidance on best practice.
  5. Staff should be aware that any concerns should be reported to the Health and Safety lead.
  6. Ensure that appropriate policies are in place for managing any identified risks. Policies should be kept up to date and disseminated to staff and used in practice.
  7. Provide clear information and training to employees. Ensure they have the appropriate tools to do their job safely. Both long-standing employees and new joiners should receive appropriate training
  8. Keep good records and clear documentation.

The main obligations of an organisation to its employees and visitors are derived from various pieces of legislation, including the following main provisions:

Health and Safety at Work etc Act 1974 (HSAWA) : The Act places a duty on every employer to ensure, ‘so far as is reasonably practicable’, the health, safety and welfare at work of all their employees, and also ‘to conduct the undertaking in such a way as to ensure, so far as is reasonably practicable, that persons who are not in their employment who may be affected thereby are not thereby exposed to risks to their health or safety.’

The Management of Health and Safety at Work Regulations 1999 : This details the steps employers are required to take to manage their health and safety obligations under the HSAWA. These include: employers to carry out risk assessments, make arrangements to implement necessary measures, appoint competent people to oversee health and safety and arrange for appropriate information and training for staff and visitors.

Workplace (Health, Safety and Welfare) Regulations 1992 : These cover a wide range of basic health, safety and welfare issues such as ventilation, heating, lighting, workstations, seating, drinking water and welfare facilities.

Personal Protective Equipment at Work Regulations 1992 : Require employers to provide appropriate protective clothing and equipment for their employees.

Provision and Use of Work Equipment Regulations 1998 : Require that equipment provided for use at work, including machinery, is safe.

Health and Safety Information for Employees Regulations 1989 : Require employers to display a poster telling employees what they need to know about health and safety.

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR) : Require employers to notify certain occupational injuries, diseases and dangerous events to the relevant authorities.

Control of Substances Hazardous to Health Regulations 2002 (COSHH) : Require employers to assess the risks and control substances which are hazardous to health, such as asbestos, cleaning products and chemicals.

Employer’s Liability Insurance

If you have employees or apprentices you must carry employer’s liability insurance. This insurance will enable you to meet the cost of compensation for your employees’ injuries or illness whether they are caused on or off site. You must be insured for at least £5 million. However, you should look carefully at your risks and liabilities and consider whether you need more than £5 million. In practice, most insurers offer cover of at least £10 million. You must display a copy of the certificate of insurance where your employees can easily read it.

You can be fined up to £2500 for any day which you are without suitable insurance. If you do not display the certificate of insurance or refuse to make it available to HSE inspectors when they ask, you can be fined up to £1000.

The buck stops with the Board

The directors are ultimately responsible for health and safety, and there must be a visible and active commitment from the board. Board members should consider what information they need to receive and review to enable them to monitor health and safety effectively. Ideally the issue should be a standing item at board meetings. Although prosecutions are frequently bought as a result of an accident in which someone has been hurt, a company can be liable even where no personal injury has occurred. All that the prosecution need prove is that a state of affairs existed that posed a real risk to the health and safety of employees or others.

If there is a prosecution it is likely that one or more directors will required to attend court to defend the organisation’s position.  If it can be shown that the offence has been committed with the ‘consent or connivance’ of a director, or the incident is his attributable to his neglect, he or she may face prosecution in a personal capacity as well. ‘Consent’ and ‘connivance’ requires that the defendant knew the material facts that constituted the offence by the company and agreed to conduct its business on the basis of those facts, ignorance of the law being no defence. ‘Neglect’ does not necessarily require knowledge on the defendant’s part of the material facts giving rise to the breaches, but can include the situation where he ought to have been aware of those circumstances.

Prosecutions for breach of health and safety laws are increasingly common and can result in hefty fines and adverse publicity. The Corporate Manslaughter and Corporate Homicide Act 2007 made it easier for organisations to be held corporately accountable for deaths caused by their failures. An organisation can be guilty of a criminal offence under the Act if ‘the way in which its activities were managed or organised’ caused a person’s death, and amounted to a ‘gross breach’ of a relevant duty of care owed by the organisation to the deceased. Convicted organisations can receive an unlimited fine, and can be required to publicise the fact that they have been convicted. The number of prosecutions has been gathering momentum with over 18 cases since April 2008. Directors and officers insurance may provide some cover for the costs of successfully defending court proceedings, but will not cover the fine itself.

Compliance with health and safety provisions is an essential part of the Board’s duty to monitor risks. For more on the duties of directors download our FREE Guide to Directors’ Duties.


Mark Johnson is an experienced solicitor & chartered company secretary supporting businesses, charities, social enterprises & academy trusts on governance, compliance & legal affairs. Please get in touch info@elderflowerlegal.co.uk or 01625 260577.

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The Hallmarks of Good Governance in Academy Trusts – Part 4

A series of posts examining what good governance in an academy trust looks like and how boards can create a framework to deliver their core purpose and properly discharge their duties. In part 3 we looked at Stewardship of Finance and Resources. In this final part 4 we examine..

How to get governance right from the outset

The Department of Education’s view is that effective governance requires the following key ingredients:

  • The right people with the necessary skills, time and commitment, and sufficient diversity of perspectives to ensure internal challenge, all actively contributing in line with clearly defined roles and responsibilities under an effective chair and an explicit code of conduct, and with active succession planning
  • Clear governance structures and documentation with tightly defined remits, particularly in relation to functions delegated to committees or other bodies
  • Clear separation between the strategic and operational in terms of the role of the board and the school management
  • A positive relationship between the board and its school management enabling robust constructive challenge on the basis of a good understanding of objective data, particularly on pupil progress, staff performance and finances
  • The support and advice of an independent and professional company secretary
  • Robust processes for financial and business planning and oversight and effective controls for compliance, propriety and value for money
  • Processes for regular self-evaluation, review and improvement including; skills audits, training and development plans, and independent external reviews as necessary.

“Governors and trustees are engaged and energetic non-executive leaders who are driven by their core strategic functions of setting the vision, holding the Headteacher to account or results and making sure money is well spent; they sit on boards no bigger than they have to be; are curious about what’s going on in the classroom and aren’t afraid to innovate; they focus ruthlessly on what really matters: raising standards”  – Schools Minister, Lord Nash, 2013

Ensuring continuous improvement

Achieving high standards of governance and accountability requires sustained effort and resources – it isn’t easy. With all aspects of good governance, the effectiveness ultimately depends on the skills, knowledge and behaviour of those responsible for operating the system. The board must set the desired values, ensure they are communicated, incentivise the desired behaviours, and sanction inappropriate behaviour. Academy Trust boards can benefit greatly from an external review of their governance structures and/or an independent review of their board’s effectiveness. In response to the growing need for improvements, Elderflower Legal has developed fixed price review packages which can be delivered quickly, confidentially and with the minimum of fuss to help trustees and school leaders get a picture of how they are performing and what areas of practice need to improve. You can find out more about our review packages here.

Final thoughts

One of the difficulties in embedding sound practice is a current lack of clarity about who is responsible in academy trusts for setting up the framework for sound governance and embedding good practice.  CEOs and Executive Principals may not be the best people to lead on this – they are tasked with driving the organisation forward and taking measured risks. Similarly Finance Directors and School Business Managers may be too immersed in the day to day operations and short of time to take an overview of governance. The best person to implement your system is trained governance professional, such as an ICSA-qualified chartered secretary. They have the necessary experience and rigorous qualifications beyond financial and legal aspects to make things happen and help you succeed. Chartered secretaries can work for your trust on an outsourced or employed basis, depending on your budget.

A sound system of governance isn’t a ‘nice to have’, an exercise in box-ticking compliance or even a brake on progress: it is an essential foundation stone on which the whole institution is built. Get it right and it can be enabling and empowering: get it wrong and the academy trust’s whole purpose and even its survival may be compromised.

If you have enjoyed these posts, we have compiled the series “The Hallmarks of Good Governance in Academy Trusts” into a FREE downloadable Special Report.  The report can be downloaded here.


Mark Johnson is a highly experienced independent solicitor & chartered secretary supporting academy trusts, free schools & other education providers with their governance arrangements, legal and compliance matters. He is an independent member of a MAT audit committee. He offers a cost-effective governance review GovernanceCHECK360™ for academy trusts elderflowerlegal.co.uk.

If you enjoyed reading this series of posts on Good Governance in Academy Trusts and would like to be kept up to date on similar topics like this, then why not sign up to receive our regular newsletter.

The Hallmarks of Good Governance in Academy Trusts – Part 3

This series of posts examines what good governance in academy trusts looks like and how boards can create a framework to deliver their core purpose and properly discharge their duties. In Part 2, we examined the framework of governance in academy trusts. In this Part 3, we examine….

Stewardship of finance and resources

The academy trust board is responsible for the proper stewardship of trust funds, including regularity and propriety, and for ensuring economy, efficiency and effectiveness in their use. The Financial Handbook states “The board of trustees has wide discretion over its use of the trust’s funds, which it must discharge reasonably and in a way that commands broad public support”. This is hinting at the reputational risk of expenditure which could be perceived as inappropriate.

Further, the governing body has a responsibility, under the Academies Financial Handbook, to appoint an Accounting Officer, normally the headteacher or CEO, who has specific responsibilities for financial matters. This role includes a personal responsibility to Parliament, and to the Secretary of State, for the financial resources under the trust’s control.

The Accounting Officer must take personal responsibility (which must not be delegated) for assuring the board that there is compliance with the Financial Handbook and the Funding Agreement. The Accounting Officer must advise the board in writing if, at any time, in his or her opinion, any action or policy under consideration by them is incompatible with the terms of the Articles, Funding Agreement or the Financial Handbook.

Trustees have a number of legal duties that must be met in relation to accounting and financial reporting. These include:

  • keeping ‘sufficient’ accounting records to explain all transactions and show the trust’s financial position
  • preparing an annual report and statutory accounts meeting legal requirements, including the EFA’s Accounts Direction (updated annually) and the Statement of Recommended Practice (SoRP) for charity accounts.
  • considering the need for a reserves policy, managing the level of reserves held and the disclosure of any reserves policy in the Trustees’ Annual Report
  • formally approving the Trustees’ Annual Report and accounts at a minuted board meeting
  • ensuring that accounts are subjected to an external audit
  • ensuring that the Trustees’ Annual Report, accounts and annual return are filed on time with the EFA and Companies House.

Financial information should be provided at each trustee meeting which include details of the academy trust’s financial position and performance. The financial information should be sent to each trustee before each meeting and will typically include:

  • the latest management accounts
  • a comparison of budget to actual figures
  • an explanation for variances between forecasts and what actually happened
  • details of cash flow and closing bank balances

The meeting should set aside a specific time within the agenda for discuss of financial matters and allow the trustees to raise any issues of concern.

Systems of internal control

The Funding Agreement contains a range of obligations in relation to accounting and financial records. There is a general obligation to comply with the requirements of the Financial Handbook published from time to time.

The trust’s internal control framework must include arrangements for:

  • co-ordinating the planning and budgeting processes
  • applying discipline in financial management, including managing banking, debt and cash flow, with appropriate segregation of duties
  • preparation of monthly budget monitoring reports
  • ensuring that delegated financial authorities are respected
  • effective planning and oversight of any capital projects
  • the management and oversight of assets
  • the propriety and regularity of financial transactions
  • reducing the risk of fraud and theft
  • ensuring efficiency and value for money in the organisation’s activities
  • a process for independent checking of financial controls, systems, transactions and risks

Executive management and the trust’s staff are responsible for ensuring that the controls put in place by the trustees are implemented. There should be a culture of control embedded in the operations of the organisation; this culture is created by the trustees and senior management, who should lead by example in adhering to the trust’s internal financial controls and good practice.

All academy trusts are now required to include a statement about their governance arrangements in their annual report and accounts and to publish details on their website. New trusts are also required to complete an EFA online financial management and governance self-assessment within 4 months of opening. This includes questions such as:

  1. Has a named individual been designated as the accounting officer and does this person fully understand the duties and responsibilities of the role?
  2. Does the accounting officer, under the guidance of the board, ensure appropriate oversight of financial transactions by having all the trust’s property under the control of the trustees, measures in place to prevent losses or misuse; having bank accounts, financial systems and financial records operated by more than one person; keeping and maintaining full and accurate accounting records; and preparing accruals accounts, giving a true and fair view of the trust’s use of resources, in accordance with existing accounting standards?
  3. Do the board and appropriate committees meet at least three times per year and conduct business only when meetings are quorate?
  4. Does the board receive and consider information about the financial performance of the trust at least three times a year?
  5. Has a chief financial officer, with appropriate qualifications and/or experience, been appointed by the board?
  6. Has the board approved a written scheme of delegation of financial powers that maintains robust internal control arrangements?
  7. Has the board approved a balanced budget for the financial year and has the approval been minuted?
  8. Has the board been made aware of the requirement to obtain approval from EFA where it is considering borrowing funds or entering into liabilities such as leases or tenancies beyond delegated limits?
  9. Has an appropriate internal control framework been established?
  10. Has a contingency and business continuity plan been prepared?
  11. Have the risks arising from your operations been assessed?
  12. Has adequate insurance cover been obtained?
  13. Has the board been informed of the requirement to obtain approval from EFA before making any novel or contentious payments?
  14. Have all trustees completed the register of business and outside interests?
  15. Has the academy trust published on its website the relevant business and pecuniary interests of trustees and members?
  16. Are there measures in place to manage any conflicts of interest?
  17. Has the board approved a competitive tendering policy?
  18. Do senior officers’ payroll arrangements meet tax obligations fully?
  19. Has the board been informed that goods or services provided by individuals or organisations connected to the trust must be provided at ‘no more than cost’, on the basis of an open book agreement and supported by statements of assurance, in accordance with the conditions set out in the Handbook?
  20. Has a set of accounting policies been approved?
  21. Has an external auditor been appointed?
  22. Has an audit committee or a committee that fulfils the functions of an audit committee been established?
  23. Has a process for independent checking of financial controls been implemented?
  24. Has an appropriate committee agreed a programme to address the risks to financial control?
  25. Has the board been informed of the requirement to report to EFA any instances of fraud or theft: above £5,000 against the trust whether by employees, trustees or third parties; or where fraud is unusual or systematic in nature? Full details must be provided in the commentary section where any such fraud or theft has occurred.

EFA Chief Executive Peter Lauener set out further key questions which accounting officers and trustees must be able to answer on an ongoing basis in a letter dated June 2013:

  • Are you confident you are procuring all goods and services in an open and transparent way?
  • Are you ensuring that your cashflow reflects the activity at the trust and that it is properly reconciled at least monthly?
  • Do you have robust controls for payroll arrangements – particularly important in a multi-academy trust – including checks that any amounts paid out are the right amounts and paid to bona fide employees?
  • Do you have appropriate segregation of responsibility in your finance section (i.e. cross-checks and approvals)? And are you providing proper management support to your finance staff to operate in a role where they are well-placed to provide you with a “first line of defence” in terms up upholding propriety, regularity and value for money in the use of public funds?
  • Are you making sure conflicts of interest are avoided and that you are keeping registers of interest up to date?
  • Are you confident senior staff and trustees are not gaining any private or personal commercial or financial benefit as a result of their position, other of course than under their contract of employment?
  • Are you sure that your academy trust is not being exploited for personal/private benefit and that any fees for consultancy work are where appropriate being properly accrued to the academy trust rather than to individuals?
  • Do you have robust procedures for the recording, documenting, evidencing and monitoring of information and especially the reasons for entering into major spending commitments?
  • Do you have properly constituted arrangements for internal audit to give you and trustees a further safeguard that everything is in order?

Combating Fraud

To reduce the risk of fraud, academy trusts are recommended to consider the following actions:

  • ensure anti-fraud and whistleblowing policies are in place and regularly update these and communicate them to staff
  • conduct regular anti-fraud awareness training events for finance staff
  • highlight to staff that they can also contact theEFA with any concerns of possible irregularity or fraud (the EFA publishes financial management and governance reviews on its website)
  • management communications to pursue identified incidents of fraud
  • ensure financial controls are regularly assessed and are well designed and implemented
  • ensure that there is appropriate segregation of duties in your controls
  • review your processes for references and background checks on new employees
  • scrutinise significant business transactions and personal relationships to avoid possible conflicts of interest
  • install a physical security system to protect the trust’s assets

The most common abuses identified by auditors were set out in a National Audit Office report of 2015:

  • misuse of funds by headteachers using academy funds for personal gain
  • inappropriate expense claims for both staff and trustees and unjustified salary increases
  • transactions in breach of the Academies Financial Handbook and not in line with Parliamentary intentions
  • poor oversight of activities of individual schools in a group, or weak controls at the trust level
  • weaknesses in procurement (that is, non-compliance with EU procurement rules, and employment or contracting with related parties, or both)
  • Related-party transactions (that is, whether they have been entered into on an arms-length basis and are in line with the new ‘at cost’ requirement.

The EFA publishes regular reports of investigations it has carried out into financial mismanagement and governance issues on its website.

Next time – How to get your governance right from the outset.


Mark Johnson is a highly experienced independent solicitor & chartered secretary supporting academy trusts, free schools & other education providers with their governance arrangements, legal and compliance matters. He is an independent member of a MAT audit committee. He offers a cost-effective governance review GovernanceCHECK360™ for academy trusts elderflowerlegal.co.uk.

If you would like to be kept up to date on more topics like this, then why not sign up to receive our regular newsletter.

The Hallmarks of Good Governance in Academy Trusts – Part 2

This series of posts examines what good governance in academy trusts looks like and how boards can create a framework to deliver their core purpose and properly discharge their duties. In Part 1, we examined the importance of governance and the role of the Board of an academy trust. In this Part 2 we examine..

The framework for good governance in academy trusts

There are now a wide variety of structures used for academy trusts. All Academies are established as independent companies limited by guarantee with exempt charitable status. The following are the usual key players in the structure (see Figure 1):

Members

Members are akin to the shareholders of the company. They have ultimate control over the academy trust, with the ability to appoint or dismiss some or all of the trustees and the right to amend the trust’s articles of association (subject to approval by the Secretary of State). Unfortunately, in many cases the members are often the same people who sit on the board as trustees. This weakens accountability since there is a danger of creating a self-serving oligarchy. Alive to this risk, the Department now recommends that there are at least 5 members, the majority of whom are not trustees. Employees of the trust cannot be members. In most current structures the role of the members is very muted. The members will meet perhaps once a year to approve the accounts and re-appoint auditors. A truly mature model would allow parents, and even pupils, to exercise the full rights of members. For example, the Cooperative Academy model articles provide for pupils, parents, staff, community and alumni to all become members. In theory, they could exercise their powers to dismiss individual directors, or the whole board. For more on the rights of members see here. The Trust must notify the EFA of the appointment of any new members within 14 days.

Trustees

Persons appointed to sit on the board of the academy trust are both company directors and charity trustees. They are responsible for the operation of the trust. They set the strategic direction and are accountable for finance and academic standards. The trustees have duties under charity law to ensure that the academy complies with its governing document and the law, to take reasonable care that the trust is managed efficiently and effectively, and to ensure that resources are used appropriately and protected for the benefit of the charity. They have duties under Company Law to act in the best interests of the company, to avoid conflicts of interest and to perform their duties diligently, as well as wider duties under the general law for the management and safety of premises, safeguarding, data protection, non-discrimination and under employment law. They also have specific contractual duties to the Secretary of State under the Funding Agreement, such as providing information to the Department, providing places to pupils with SEN, providing free school meals and compliance with the Admissions Code, as well as adhering to the Academies Financial Handbook. Trusts must notify the EFA of the appointment of any new trustee within 14 days. The board may establish sub-committees to manage particular strands of its work, such as finance and risk, audit and internal controls, premises and nominations (recruitment & succession planning), curriculum and pastoral care.

Sponsors

Sometimes there may be one or more external sponsor, which could be another high-performing school, a charity, university, commercial organisation or faith organisation. The sponsor may have a right to appoint members and sometimes trustees, which gives them a degree of influence or control. Usually some form of agreement will be in place with the sponsor setting out the scope of their involvement and the terms on which they may receive start-up grant funding. The Department may insist on a ‘tripartite agreement’ which regulates the sponsor’s ability to charge for services only ‘at cost’.

Secretary of State

Despite the rhetoric about academies enjoying a high degree of autonomy, the Secretary of State (through the Education Funding Agency) enjoys very significant controls over academy trust’s freedom of action: firstly, through the Funding Agreement, which provides a wide range of contractual rights for the Department; and secondly, in its capacity as ‘principal regulator’ of an academy’s trust’s compliance with charity law (functions having been asssigned to her under a Memorandum of Understanding with the Charity Commission).

Local Governing Bodies

The role and powers of a local governing body depend on the precise local arrangements. A multi academy trust which runs several schools may devolve powers and functions to a local governing body based on ‘earned autonomy’ (i.e. better performing schools are able to take more decisions locally, whereas others may be purely ‘advisory bodies’). The details about precisely which functions have been delegated by the trust board should be contained in a clear Scheme of Delegation. Local governing bodies may operate as sub-committees of the Board. Key decisions on big ticket issues such as setting vision, policies, governance procedures, contracts and procurement, health and safety, HR matters, the budget and staffing structures usually sit with trustees at the trust board level. There is discretion over whether the local governing body should have any role in:

  • determining the individual school’s vision ethos and direction
  • recruitment of the Headteacher
  • performance management of Headteacher
  • delegated responsibility for the budget

The Local Governing Body may have delegated authority in relation to:

  • recruitment and performance management of staff, other than the local headteacher
  • monitoring of teaching standards
  • admissions and exclusions
  • Appeals Panels
  • term and holiday dates
  • reporting to parents

The trust board will usually reserve the right to suspend delegation and intervene in the event of falling standards or a serious risk to welfare of children.

Academies Governance Framework

The Department is now considering allowing trusts to either scrap local governing bodies or give them powers to oversee more than one school, with a less prescriptive requirement that the governance of each school should be ‘informed by local intelligence’. This should help remove possible confusion between accountability of local heads and managers to the overall CEO and executive management vs. accountability to local governing bodies. It is important to remember that, even where trustees have given delegated authority for certain functions to local governors or sub-committees, the trustee board as whole remain accountable and responsible for these functions. The ‘buck always stops’ with the board of trustees. It is important that the trust board receives written reports and minutes from sub-committees and local governing body meetings so they have ‘eyes and ears’ on what is happening across the organisation. As the academy trust grows to take in more schools, so the complexity and risk grows: systems and roles may need to evolve. Leaders need to be aware of the organisation’s capabilities and capacity to grow. DfE research (2015) has shown that the key pinch points usually occur when the grouping reaches 5 schools, 11 schools and then 20 schools.

You can read more detail about the governance arrangements and legal duties of trustees of an academy trust in our concise guide.

Getting the documentation right

The main documentation needed to set up the governance framework for an academy trust will include:

  • Articles of Association (largely in the form prescribed by the Department with little flexibility to change)
  • Funding Agreement(s) with Secretary of State
  • Tripartite Agreement with Sponsor and SoS, Letter of Grant, where applicable
  • Standing Orders & Financial Regulations, including Tendering and Procurement Policy
  • Schedule of Reserved Matters for the Board
  • Scheme of Delegation
  • Company Registers (Members, Directors, Secretary, Persons with Significant Control)
  • Minute Books
  • Board Code of Conduct
  • Statutory Policies (e.g. Charging, Behaviour, Sex Education, SEN, Data Protection, Complaints, Health & Safety)
  • Terms of Reference for Board Committees, such as Audit, Finance, Premises and Nominations.
  • Register of Business, Outside Interests & Family connections – which covers members, trustees, local governors and senior leadership team and must be published on the trust’s website
  • Conflicts of Interest Policy
  • Board Induction, Training and Evaluation Procedures
  • Vision, Mission and Values statement
  • Strategy Document (see more)
  • School Development Plan, including defined KPIs to monitor and measure progress, for example on pupil attainment, quality of teaching, pupil wellbeing, staff morale, effectiveness of communication, future aspirations of pupils.
  • (Balanced) Budget
  • Risk Register (see more)
  • Business Continuity Plan
  • Appropriate Insurance Covers
  • External auditor appointment letter (setting out their responsibilities)

As the trust grows, there will inevitably be a need for more sophisticated and standardised processes for governance and oversight, including systems for reporting and analysing performance data, financial planning and control, management, HR, teaching and learning methods.

Next time: we look at stewardship of finances and resources.


Mark Johnson is a highly experienced independent solicitor & chartered secretary supporting academy trusts, free schools & other education providers with their governance arrangements, legal and compliance matters. He is an independent member of a MAT audit committee. He offers a cost-effective governance review GovernanceCHECK360™ for academy trusts elderflowerlegal.co.uk.

If you would like to be kept up to date on more topics like this, then why not sign up to receive our regular newsletter.

The Hallmarks of Good Governance in Academy Trusts

This series of posts examines what effective governance in academy trusts looks like and how boards can create a framework to deliver their core purpose and properly discharge their duties.

With the demise in the role and capacity of local education authorities, England’s state education system is moving inexorably moves towards a school-led system with a diverse landscape of structures, partnerships and institutions entrusted with delivering statutory education with public funds. The need for robust governance and accountability has never been greater. At the same time, schools are subject to so many regulations and reporting requirements, it can be difficult to see the wood for the trees. The spotlight from Government and regulators on sound governance in the education sector has never been stronger. However, trustees face a daunting task in assembling a picture of all the requirements: so in this series of posts we aim to provide a route map, explain and demystify.

What is governance and why is it important?

A system of governance is all about the way organisations are directed, controlled and held accountable to deliver their core purpose over the long-term. The organisation’s structure, practices and procedures should all be organised so that the organisation achieves its core purpose, mission and goals, whilst complying with the law and sound ethical practice.

A sound governance framework will:

  • Set out the shared purpose, vision and values of the trust
  • Enable the trust to develop an agreed strategy to implement the purpose
  • Ensure oversight and monitoring of the organisation’s performance along the way
  • Ensure the organisation remains accountable for delivering its mission.

Positive benefits of good governance in academy trusts include:

  • People will trust and respect the organisation (including pupils, parents, funders, regulators, suppliers and the wider community)
  • The organisation will know where it is going
  • The board will be fully connected with management, the academy’s operations and wider stakeholders
  • Good and timely decisions will be made
  • The board will be better able to identify and manage risks
  • The organisation will avoid mistakes and have greater resilience to cope with problems
  • The organisation should enjoy improved financial stability

Where governance is strong, standards of attainment are likely to be higher because pupils are known and supported to be their best, the quality of teaching is a constant focus of attention, and the leadership of the academy is held to account for the performance and wellbeing of the children.” – Collaborative Academies Trust, 2014.

The pivotal role of the Board

The academy trust’s board is at the epicentre of the system of governance. They must set out the academy’s vision (what the school will look like in 3-5 years time) its values, the shared moral purpose that should run through all the academy’s actions. In most cases, this will be about improving children’s lives through excellent teaching and learning and preparing young people for the challenges of later life.

The model Articles for an academy trust (the main governing document) usually contain an anodyne statement that its object is “to advance for the public benefit education in the United Kingdom…by establishing, maintaining, carrying on, managing and developing a school offering a broad and balanced curriculum.” It therefore falls to the Board to put the flesh on the bones of this and stamp their particular vision and ethos on the trust.

The Department of Education’s view (Governance Handbook, 2015) is that the Board has three core functions:

  1. To ensure clarity of vision, ethos, strategic direction and structure
  2. Hold the Headteacher to account for the educational performance of the school and its pupils and the performance management of its staff;
  3. Oversee the financial performance of the school(s) and make sure money is well spent.

Those are certainly three key strands to the Board’s work, but there is a lot more besides! One of the key challenges for members of an academy trust board is to think and act strategically. The Board should continually review and evaluate the strengths, weaknesses, opportunities and threats and consider how best to play to the organisation’s strengths, or bolster the required competencies. Board members are not there to provide operational oversight or ‘second guess’ the executive managers. Nor are they there to represent or advocate for a particular constituency or interest group. The primary consideration must always be what is best for the pupils. The changing landscape and increasing levels of accountability and responsibility will require high calibre trustees with specific skills and attributes, who are able to step out of their comfort zone to lead school improvement, provide a high level of professional challenge and work as team players on dynamic boards. Running an Academy trust is like running a business, albeit one with a social purpose. Board members must understand that they have corporate collective responsibility and can be personally liable in some circumstances in the event of regulatory action or a legal claim (e.g. breach of trust, accounting irregularities, or negligence leading to personal injury).

The trend now is towards smaller, more strategic and skills-focused board, with less prescriptive structures and a definition of purpose more aligned to the new educational landscape. The National College of Teaching and Learning (Governance of MATs, 2015) has set out the skills and attributes required of trustees. Trustees should:

  • constantly focus on what’s best for the school and pupils by challenging in a constructive manner, asking probing questions, and visualising the strategic picture, in terms of both the trust and the schools within it. See more on developing strategy.
  • understand and effectively carry out their roles, responsibilities and accountabilities, with the ability to take risks and consider dynamic and innovative options
  • be able to analyse data, measure and lead school improvement and drive the necessary changes – useful starting points for monitoring data include the OFSTED data dashboard, Fischer Family Trust Governor dashboard (which measures ‘value added’ by the school based on socioeconomic factors) and the Wellcome Trust Questions for Governors.
  • understand the financial and the business aspects of leading a trust, as well as the legal implications and how the trust and the business work
  • work as part of a team and accept shared responsibility and accountability, as well as undertaking frequent self-evaluation in order to remain effective
  • act with a strong moral purpose, integrity and honesty, and as an advocate for the trust’s values, ethos and philosophy
  • express disagreement in a rational and professional manner
  • adopt an entrepreneurial mind-set in order to see and make the most of opportunities that are outside the day-to-day practices of the trust or schools
  • be innovative, creative and open-minded by engaging in futures thinking and ‘horizon scanning’
  • ensure that they have the commitment and stamina to drive forward the trust, as well as the will to abandon the ‘good’ in order to find the ‘outstanding’.

Composition of the Board

The model Articles state that the number of trustees shall be at least 3, but not subject to any maximum. The Chief Executive / Executive Principal may choose to act as a trustee, but is not obliged to. No more than one third of trustees can be paid employees of the trust. Normally, there must be at least 2 parent trustees (who are parents or carers of a registered pupil at the school) and who are properly elected by parents/ carers. However, (somewhat controversially) in the case of a multi-academy trust, this requirement can be dispensed with, if there is parent representation on local governing bodies. Care must be taken if appointing persons who are employees or councillors of a local authority – their involvement must be kept below 20% of the membership to avoid accounting difficulties.

Beyond that, there is some flexibility to decide the composition of the Board. There will usually be a specified number of trustees appointed by the members and by the external sponsor (if there is one). The Board can co-opt further trustees as it wishes. In practice, trusts have usually adopted one of three models – the traditional model where trustees are drawn from the stakeholder groups such as parents, staff and the community; representation model where there is a group of schools, the board is made up of representatives from each constituent school- the problem is that this can become unwieldy as the group grows and there is potential for inherent conflicts of interest; the third model, usual in sponsored academies, is for the sponsor to appoint the majority of trustees.

The default term of office for a trustee is 4 years, however, trusts may instead opt for retirement by rotation on an annual or bi-annual basis, in which case an annual general meeting of the members may need to be held to deal with appointments. The National Governors Association recommends that Chairs should serve no more than six years and no trustee should serve more than two terms.

The Financial Handbook requires that Board meetings take place at least three times a year (and business can conducted only when quorate), although trusts may consider it appropriate to meet more frequently, particularly in medium-sized and larger trusts with more complex structures, and any undergoing a period of change.

There is no perfect model for the Board, although the trend recently has been toward smaller boards, with an emphasis on getting the right skills mix. The starting point is to get the right people round the table.

Recruitment and succession planning

There should be a formal, rigorous and transparent procedure for the appointment of new directors to the board’ – UK Corporate Governance Code

There are various sources of potential new trustees, including the Chamber of Commerce, local charities or housing trusts, or through organisations such as Academy Ambassadors, SGOSS, Inspiring the Future. It is important to cast the net wide and consider what skills the candidate needs to bring.

Succession planning is a key factor which ensures expertise is shared across the system and prevent boards stagnating or individual trustees or governors gaining too much power and influence. Ideally there should be an annual re-election of Board and committee chairs.

The absence of a succession plan can undermine a company’s effectiveness and its sustainability. It can also be a sign that the trust is not sufficiently clear about its purpose, and the culture and behaviours it wishes to promote in order to deliver its strategy

The Chair’s role is pivotal

The Chair of the academy trust plays a key role in giving the board leadership and direction, ensuing that trustees work as a team and understand their accountability and role in the strategic leadership of the schools and in driving improvements.

The Chair must be able to:

  • Articulate the vision, shape the culture, build a team and attract trustees and local governors with the necessary skills, values and principles, ensuring that tasks are delegated, followed up and accomplished, and who can ensure board members feel that their skills, knowledge and experience are used
  • Develop a positive relationship with the CEO/ Executive Principal as a critical friend offering support, challenge, and encouragement, holding the CEO to account for outcomes across the trust and ensuring there is rigour in the management of their performance
  • Pursue a relentless focus on school improvement – this should be the focus of policy and strategy and scrutiny and challenge by the board and its committees should reflect this
  • Leadership – ensuring that systems are in place to meet statutory obligations, terms of Funding Agreement, value for money from resources that board business is conducted effectively, including effective minute-taking and agendas.

You can read more on the role of the Chair here.

Given the increasing demands on trustees and governors, it perhaps not surprising that HM Chief Inspector of Schools, Sir Michael Wilshaw last November called for Chairs and Vice Chairs to be paid for their work. “The role is so important that amateurish governance will no longer do. Goodwill and good intentions will only go so far,” Wilshaw said. He was also concerned about governors who “lack curiosity” and hold “an overly optimistic view” of how their school was performing.

In all their dealings Academy trustees local governors and the Accounting Officer are expected to adhere to the Nolan Principles of Public Life: selflessness, integrity, objectivity, accountability, openness, honesty, and leadership. See more.

Next time: we will examine the framework of governance in academy trusts.


Mark Johnson is a highly experienced independent solicitor & chartered secretary supporting academy trusts, free schools & other education providers with their governance arrangements, legal and compliance matters. He is an independent member of a MAT audit committee. He offers a cost-effective governance review GovernanceCHECK360™ for academy trusts elderflowerlegal.co.uk.

If you would like to be kept up to date on more topics like this, then why not sign up to receive our regular newsletter.

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