The Corporate and Academic Governance Framework incorporates the ‘separation of powers’ principle. As stated at Section 1.4 above, this principle is also entrenched within the company’s Articles.
The rationale for the incorporation of this ‘separation of powers’ principle is to ensure there are effective checks and balances in place to safeguard academic standards and enhancement, and to minimise any potential for:
- A shareholder to exert undue influence over the directors and/or management (i.e. members of the Strategic Leadership Team (SLT) and the Senior Management Team (SMT))
- An executive director to exert undue influence over the other directors and/or management (i.e. members of the SLT and the SMT)
- A potential conflict of interest to arise
The ‘separation of powers’ principle comprises the following elements:
Element 1: Level 1 entrenchment [see Regulation 148 of the Articles]
The following persons shall be excluded from (i) being appointed as a director, (ii) being appointed as the Company Secretary, (iii) being engaged by the company in a position that confers membership of the company’s Strategic Leadership Team (SLT) or Senior Management Team (SMT), including the Secretary of the SLT and SMT, or (iv) acting as Chair of a shareholders’ meeting:
- any person, who, together with any family member, is the holder of 25% or more of the shares in the company, directly or indirectly;
- a person who, together with any family members, is the holder of 25% or more of the shares in an associated company (an “associated company” is any company or other legal person or entity which is the holder of 25% or more of the shares in the company, directly or indirectly); or
- a director of an associated company.
[Regulation 6]
Element 2: Level 1 entrenchment [see Regulation 148 of the Articles]
The total number of directors who are engaged by the company in an employed or self-employed capacity shall be less than the total number of directors who are independent non-executive directors.
An “independent non-executive director” is a person who is appointed as a director of the company, and who:
- is not engaged by the company in an employed or self-employed capacity;
- has never been an executive director of the company;
- has not been employed by the company within a 5-year period preceding the appointment;
- has not had a significant contractual relationship with the company within a 3-year period preceding the appointment;
- is not a shareholder of the company; and
- is not the family member of a shareholder of the company.
The maximum period of office of an independent non-executive director is four years, subject to the period being extended by a decision of the directors, acting on a recommendation of the Nominations Committee, for one further period of no more than four years.
[Regulations 1, 48 and 50]
Element 3: Level 1 entrenchment [see Regulation 148 of the Articles]
An independent non-executive director must have:
- practical expertise and/or academic expertise, and there must be at least one with senior practical expertise and one with senior academic expertise;
- a positive commitment to embrace and comply with the Core Values set out in the Committee of University Chairs ‘The Higher Education Code of Governance’[6];
- a positive commitment to embrace and comply with the Nolan principles of public life[7];
- a positive commitment to embrace and comply with our guiding principles set out in Regulation 142 of the Articles;
- a positive commitment to embrace and comply with the company’s purpose and values; and
- a positive commitment to embrace and comply with the company’s Equality, Diversity and Inclusion Policy.
[Regulations 44 and 49]
Element 4: Level 1 entrenchment [see Regulation 148 of the Articles]
The Chair of a directors’ meeting (i.e. a meeting of the Board of Directors) or of a committee established by the directors (with the exception of the Academic Committee, and the Equality, Diversity and Inclusion Committee) shall not be:
- a shareholder of the company;
- the family member of a shareholder of the company;
- engaged by the company in a position that confers membership of the company’s Strategic Leadership Team (SLT) or Senior Management Team (SMT), including the Secretary of the SLT and SMT; or
- the family member of a person who is engaged by the company in a position that confers membership of the company’s SLT or SMT, including the Secretary of the SLT and SMT.
The Chair of the Academic Committee shall be the Principal and Chief Executive Officer.
The Chair of the Equality, Diversity and Inclusion Committee shall be the Head of Governance and Company Secretary.
[Regulation 8]
Element 5: Level 1 entrenchment [see Regulation 148 of the Articles]
The following shall be permitted to attend directors’ meetings (i.e. a meeting of the Board of Directors) and participate in discussions:
- two elected members of staff (who shall not be members of the Strategic Leadership Team (SLT) or the Senior Management Team (SMT)); and
- two student representatives.
Before making any decision, the Chair shall invite representations to be made by the representatives attending the directors’ meeting, and the directors shall have due regard to such representations when making a decision.
[Regulations 41 and 42]
Element 6: Level 2 entrenchment [see Regulation 149 of the Articles]
The Academic Committee shall have the power to pass an ‘advisory’ vote of no confidence in the Principal and Chief Executive Officer. If exercised, the directors shall give due regard to such vote, provided a majority of the external academic advisors of the Academic Committee[8] have voted in favour of such vote.
[Regulation 52]
Footnotes
[6] Committee of University Chairs, ‘The Higher Education Code of Governance’ (2020). See: www.universitychairs.ac.uk
[8] The external academic advisors can only cast a vote if present at the meeting. The majority is determined in accordance with the number of external academic advisors who have the right to attend and vote.