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The Relationship Between the Principal, the Business Manager and the Board Chair: Part One

8/11/16
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This is the first article in a three-part series on the relationships between the Board Chair, the Principal and the Business Manager in a school. In this series, Craig D’cruz, National Education Consultant at CompliSpace, explores how the relationships between these three people are often determined by their roles and responsibilities and the governance and leadership structure within the school. In Part One of this series, Craig will examine the relationship between the Principal and Business Manager. 

At its very core, the foundation of the relationship between the Principal and the Business Manager is based on human interactions and communications. However, from a professional position, regardless of the school structure, the relationship is founded on the school constitution and/or the employment contract of the Business Manager. Nonetheless, the term ‘relationship’ immediately reminds us that we are just not dealing with two different roles in a school. We are dealing with two different people in two different roles in a school. It is the addition of the ‘people’ that aligns the role of leading a school with the human interactions that identify the nature of a school.

As a general rule, the Principal of a school is employed by the Board and is tasked with the employment, management and dismissal of all other staff- often including the Business Manager. Occasionally, the Business Manager, through the school constitution, may also be appointed by the Board. Where the Business Manager reports to the Principal, he or she is required to work with and follow the instructions of the Principal, who in effect is the CEO. This simply means that the Business Manager defers to the Principal with respect to the lines of authority within the school. Where the Business Manager is appointed by the Board and the lines of accountability are not clearly defined, a dual ‘leadership’ situation can occur and this may occasionally lead to conflict.

Regardless of the lines of authority and accountability within the school, the relationship between the Principal and Business Manager requires effective management by the Board, and in particular the Chair of the Board, so that the two roles and the interrelationship between the roles are clearly defined; as are the lines of responsibility and accountability. Defining the relationship, responsibility and lines of accountability are examples of meeting the four key elements of good governance – accountability, transparency, integrity and stewardship.

Various texts cite that the relationship, both constitutional and personal, between the Principal and the Business Manager is a key factor in the internal management of a school. Whilst, according to WA Department of Education Services (DES) Registration Guidelines, the Principal "is responsible for the day-to-day management and control of the School", the Business Manager is often responsible to the Principal or directly to the Board for the conduct of the financial affairs and business management of the school - and this includes risk assessment and risk management.

Separation of governance from management

The constitution must indicate a clear distinction between the roles and responsibilities of governance and management in a school. To maintain this separation, the Principal and any school staff such as a Business Manager, administrator or teachers, if they are members at all, are often appointed as ex-officio non-voting members of the governing body, rather than voting members.

If the school is a company set up as an incorporated entity, then the Board and Chair are directors as defined by the Corporations Act 2001(Cth) and have clearly defined responsibilities.  Likewise, under this structure, the Principal and the Business Manager are designated officers of the company and have key responsibilities as they have ‘the capacity to affect the corporation’s financial standing’.

The distinction between what is considered to be day-to-day management and business management varies between schools but, once again, needs to be defined by the Board, in association with the Principal and Business Manager, and clearly articulated to all staff. However, as some Business Managers are directly responsible to the Board, this relationship introduces ambiguity with regard to lines of accountability. In this situation, most Principals and Business Managers work out acceptable personal modus operandi but there is always the potential for conflict.

Such potential conflict should be avoided as explained by The Association of School Business Administrators (ASBA) Code of Conduct: “Chapter Associations and their members: shall not enter into an agreement or undertake any activity which may be in conflict with the interest of their school or which would prejudice the performance of their professional duties

According to Newman, "the Bursar or Business Manager can take responsibility for school operations that may then allow the Principal to concentrate on the key role of educational leadership".

In this study, Newman noted that when New South Wales Principals were asked why they went into teaching the response was usually “to make a difference in young peoples’ lives” or similar. The respondents often added that as a Principal, their efforts were often diverted by what they considered to be non-core aspects of their current role, notably running the finances, buildings and maintenance for the site.

There is no doubt at all that a good Business Manager can assist a Principal to not only run a school effectively but also assume responsibilities for risk compliance, management of administrative and grounds staff, financial matters, development of grounds and facilities etc. The Business Manager generally holds key responsibilities that usually only his or her qualifications can support – internal audit, external audit, enterprise risk management (ERM), capital project management (sometimes millions of dollars, often sought from external financiers with significant covenants applied etc.) and oversight of school maintenance projects.

In many non-government schools, this is the model that seems to work effectively: the Principal works with a Business Manager who reports to the Principal and/or the Board, who oversees human resources, finance, occupational health and safety issues, facilities management and marketing. The Principal then generally takes on the core business roles without the business work.

If the Business Manager is appointed by the Principal and is accountable to the Principal, and not the Board, then the relationship between the Principal and Business Manager can also tend to become one of employer/employee. The Business Manager would provide advice to the Principal regarding the financial management of the school budget but the Principal would have the final say on what would be taken to the Board. This model, although it may be appealing to a Principal, also has potential underlying issues including situations where the Principal uses this line of authority to instruct the Business Manager regarding matters of finance and general administration. This may lead to conflict and a breakdown in the communication between the two leaders.

In an ideal world, regardless of who appoints the Business Manager and who the Business Manager reports to, the Principal and the Business Manager would work together (with regular and open discussions) as a team within a team (the Leadership or Executive Team) to ensure that the best possible student learning outcomes are attained for the best financial outlay and within the approved annual school budget. Basically, Principals should develop the ‘big picture’ ideas and programmes and the Business Managers should work to see if they can be implemented effectively within the prescribed budget as set down by the Board.

In the next article, Craig will examine the relationship between the Board Chair and the Principal.

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About the Author

Craig D’cruz

With 39 years of educational experience, Craig D’cruz is the Principal Consultant and Sector Lead, Education at Ideagen CompliSpace. Craig provides direction on education matters including new products, program/module content and training. Previously Craig held the roles of Industrial Officer at the Association of Independent Schools of WA, he was the Principal of a K-12 non-government school, Deputy Principal of a systemic non-government school and he has had boarding, teaching and leadership experience in both the independent and Catholic school sectors. Craig has also spent ten years on the board of a large non-government school and is a regular presenter on behalf of Ideagen CompliSpace and other educational bodies on issues relating to school governance, school culture and leadership.

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