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Governance Update - Do Your Governance Arrangements Align with DfE Policy?

on Friday, 11 December 2020.

In July we wrote to you about the importance of reviewing your governance arrangements (particularly your Articles of Association) and the need to consider the latest DfE policy and requirements.

Since our earlier article, the DfE has updated its Governance Handbook and published a new document entitled Academy Trusts: Structures and Role Descriptors which sets out clearly their expectations on academy governance.

DfE policy in this area isn't new; some of which has previously been reflected in updates to the DfE model Articles, but this is perhaps the clearest statement of their policy to date. In addition, the absolute prohibition on employees as members which takes effect from 1 March 2021 is requiring several trusts to take action.

What Does This Mean for You?

You might be aware that as a matter of good practice and as a contractual requirement under the Academies Financial Handbook, trusts should be carrying out governance reviews in some form, annually. This review should consider the extent to which the arrangements align with DfE policy and applies equally to single academy trusts (SATs) and multi-academy trusts (MATs).

We are, however, noticing that it is the SATs which are most particularly affected by the DfE's policy requirements, particularly those that were single converters between 2010 to 2013 under the coalition government.

What Do We Need to Be Looking out For?

In order to be in line with the DfE policy (and noting that there will be variations for faith academies and co-operative academies for example), we recommend that you consider updating your Articles if:

  • your membership includes an employee (normally the headteacher in a SAT and the CEO in a MAT)

  • your membership includes ex-officio members drawn from the trustees (or 'governors' in SATs), such as the Chair, the Vice Chair or a Chair of a committee or it otherwise provides for a 'trustees are members model'

  • the chair of trustees (governors in a SAT) is automatically the chair of the members

  • your trustees (governors in a SAT) are predominantly appointed by the trustees rather than by the members

  • your trustees include individuals who are there on a representative basis (such as because they are the Chair of a local governing body)

Please note that:

  • The majority of the members should not be trustees (governors in a SAT)

  • SATs should not be operating with a group of governors of which only a number of are recorded as the directors and trustees.

What Points Might We Need to Be Mindful in the New Documentation?

There are a few statements in the new documentation on which we would urge caution:

  • that it is possible to appoint more than one person to share the role of Chair: this is not something anticipated by the model Articles

  • that the local governing bodies have their members appointed and removed by the trust board: the terms of reference will confirm the appointment arrangements (albeit that the terms of reference can be amended by the board)

  • that panels can be established with individuals who are not trustees: this will not always be the case, particularly for a SAT

What Overarching Principles Should We Bear in Mind When Reviewing Our Arrangements?

  • Skills
    The Governance Handbook confirms that "it is for whoever is appointing the individual to be confident that they have the necessary skills, including the willingness and ability to learn and develop." Trustees should necessarily now be completing skills audits to help inform on this point and trusts are referred to the Competency Framework for further guidance. Trusts will also need to be mindful of the need to consider the capacity of the candidate if they hold positions elsewhere, a new requirement in the Governanace Handbook.
  • Diversity
    Trusts should ensure that their boards are reflective of the community which they serve and consideration should be given to all protected characteristics (being age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation). 
  • The Role of the Members
    For those of you involved in the wider charitable sector, you might be aware of the Supreme Court decision in a case involving The Children's Investment Fund Foundation. The case confirmed the position that members of charitable companies owe a duty (referred to as a fiduciary duty) to the charitable objects. Whilst this is not a new position legally, the case has served to energise a culture of membership best practice and making membership meaningful. This is of course in line with the DfE policy position.

For more information, please contact Chloe Brunton on 07920 281889 in our Academies team for a free-of-charge conversation, or complete the form below.

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