CompliSpace has published a white paper that identifies what we have determined to be the 12 Key Risks for school boards to consider in 2019. This article discusses one of the 12 Key Risks in detail: failing to develop and maintain a high-performance school board.
It is understood that schools operate in a dynamic, ever-changing risk environment. School leaders need to be responsive, proactive and well-resourced to manage risks as they arise. Ideally, schools will clearly differentiate between “strategic risks”, that are generally the domain of a school’s governing body, and “operational risks”, that are generally managed by a school’s management team.
The risks identified within the white paper will be expanded on and included in School Governance editions throughout the course of 2019. In no specific order, this is the first of the 12.
Failure of School Boards
There are three crucial governance risks, relating to school boards and leadership, that will have a significant impact on school operations in 2019:
- failure to develop and maintain a high-performance school board
- failure to provide robust, data-based school board reports
- failure of boards and school leadership to spend sufficient time on strategy.
Without the right people, with the required talent and experience on a school board, receiving high quality data-based reports it is highly unlikely that the school board will meet the challenges and leverage the opportunities that lie ahead.
While some school boards conduct regular evaluations of the principal and executive leadership team, including performance against agreed KPIs, many do not. Many school boards may never have formally evaluated their own performance, or that of the school leadership team. The development of a high-performance school leadership team along with a high-performance school board are essential requirements for any school to survive and thrive.
Another key component of effective school board performance is ensuring that sufficient board time and resources are directed towards strategic issues. McKinsey & Company in “High performing boards: What’s on their agenda?”, suggests that low performing school boards focus on “the basics” – compliance, financial reports etc. High performing school boards do the basics but spend much more time on strategy - evaluating the allocation of resources, adjusting strategy based on changing conditions, assessing whether the strategy stays ahead of the trends, debating strategic alternatives, and engaging with innovation.
The McKinsey & Company article notes that “high impact board members” spend about the same amount of time on compliance as low impact board members – around four days per year – but spend an extra eight days per year on strategy. High impact board members spend more time than low impact board members on issues such as business risk management, organisational health and performance management.
It would be wrong to assume that low impact school boards are all lazy or incompetent. A more likely reason for the difference in time allocation is that low impact school boards do not have agendas (and associated board reports) that regularly cover key strategic discussions, enterprise risk management, performance management etc. Members of school boards sometimes say that they have very little to do other than receive and review operational reports and compliance reports.
It should be noted that strategy discussion at a board level often requires significant resourcing in the form of reports and research, statistical analysis and discussion papers. This may also be a reason why strategy does not make it on to board agendas as often as it should. If the strategy discussions are not directed and managed well, school boards can easily head off on tangential discussions (particularly focusing on operational issues) or make decisions that are impractical or that do not fit within current resource capabilities.
The school’s board sets the tone for ethical and responsible decision-making throughout the school. A school’s culture and ethics shape core beliefs and behaviours of the school. It can be summed up as “how we do things around here”. The culture of a school influences its reputation and how it interacts and builds relationships with stakeholders . It is well-known that the culture of a school is influenced by the conduct and actions of the board and individual directors. It works best if this can be aligned with its strategic objectives and help deliver on its purpose.
The degree to which a school is delivering on its purpose can be difficult to assess. It can be aided by the school board determining and assessing appropriate performance categories and indicators for the school. Once a school has decided on its purpose and related strategies, it is common for a school to create strategic planning processes to track progress to measure a school’s performance and to determine if the school is appropriately executing its strategies and achievements for its purpose. This should also use financial and non-financial indicators which can be understood by the school board, so performance can be accurately determined.
However, strategic plans developed by schools sometimes bear more resemblance to marketing documents and prospectuses than to real strategic plans with goals, key milestones and the allocation of internal resources to strategic objectives.
Key Steps in Addressing Risks Associated with Board Performance
- Assessing the current skills, knowledge, experience and capabilities of the school board, and identifying any gaps in skills or competencies that can be addressed in future board appointments or board members’ professional development and training.
- Separating “strategic” and “operational” risk reports. As a general rule, a school board should satisfy itself as to the effectiveness of management’s operational risk controls and then focus on strategic issues.
- Developing the board agenda so that it includes discussion in relation to key strategic risks and ensuring that these risks are resourced and appropriately directed.
- Developing data-based school board reports showing movements in risk assessments based on completion of risk treatment plans and risk control effectiveness. Reporting of key incident data is also a key to effective data-based board reports. For more information in relation to data-based board reporting refer to our white paper “Non-Financial reporting for Non-Government Schools”.
- Ensuring that the school’s strategic plan is specific enough to allow for progress in meeting the outcomes of the plan to be measurable, to identify the achievement milestones and to provide regular reports on the implementation of the plan to the board.
Examples of Strategic Risks Regarding Board Performance
- Failure to establish and effectively implement systems and procedures to regularly and effectively monitor and review the school board’s own performance and the performance of individual board members.
- Failure to clearly define and articulate the roles and responsibilities of the school board as against the roles and responsibilities of the school executive team.
- Failure to define and articulate the lines of communication between the school board, the principal, the school executive team and the wider school community.
- Failure to establish and effectively implement policies and procedures to monitor and evaluate the performance of the school executive team.