Minutes of the HEA Board of Directors

Meeting: Higher Education Academy Board of Directors Date: 20 November 2013 Time: 10:00 Venue: Woburn House, London

1.0 Present

Directors Professor Sir Bob Burgess (Chair) Ms Rebecca Bunting Mr Anthony Carey Mr Geoff Donnelly Professor Janice Kay Professor Peter Lutzeier Professor Don Nutbeam Professor Mike Mannion Mr Johnny Rich Professor Rama Thirunamachandran

Observers Dr Cliona O’Neill, HEFCW Mr Mark Pegg, LFHE Ms Helen Bowles, GuildHE Ms Jayne Mitchell, QAA Mr Ellie Clewlow, HEFCE Mr Greg Wade, UUK

In attendance Professor Stephanie Marshall, Chief Executive Professor Caroline Gipps, Interim Deputy Chief Executive (Research and Policy) Professor Phil Levy, Deputy Chief Executive (Academic) Ms Heather Jackson, Director (Operations) Mr William Syms, Head of Marketing and Communications Ms Hannah Purkis, Interim Company Secretary Ms Karen O’Rourke, Communications Manager Ms Sally Marshall, Administrator (Executive Support) Ms Jenni Stockton, Events Manager

Apologies Directors Ms Toni Pearce

1 Professor Tony Chapman

Observers Mr Brian Baverstock, SFC Ms Judith Shaw

2 2.0 Declarations of interest 2.1 No declaration of interests were declared at the meeting.

3.0 Minutes of the meeting held on 3 July 2013

3.1 RESOLVED (HEAB 27/13) – That minutes of the meeting held on 3 July 2013 be approved as an accurate record and signed by the Chair.

4.0 Matters arising 4.1 The Board noted the progress on the matters arising since the meeting in July 2013.

5.0 Independent Review of the HEA – Emerging Themes 5.1 This was a reserved business item which involved Directors and HEA officers only.

5.2 Further comments that would be provided to Capita included:  Recognition that the HEA had gone through a period of change and was moving in the right direction.  That the report should focus on the value added to the HEA and specific areas where value is recognised.  There were concerns raised that future models of funding for the HEA were referred to which were not part of the terms of reference and did not form part of the interviews. Clarification would be obtained from Capita.  That it was important that the Board received a draft version of the report for the Board away day to scrutinise before finalising.

6.0 Chief Executive’s Report

(a) Overview of progress 6.1 The Chief Executive updated the Board on key highlights, progress and achievements since being in post and since the last Board meeting in July 2013. The Board were thanked for their support and the time that had been given to considering the proposed direction of travel. It was explained that care had been taken to ensure there was an understanding of the infrastructure internally and externally. Ensuring there was a visible leader internally was also crucial along with communicating a clearer focus for the future both within the HEA and to the sector through meetings with the government, sector agencies, institutions and key individuals.

6.2 It was noted that the Executive had developed Executive Objectives which had been discussed by Remuneration Committee and subsequently approved by Finance and General Purposes Committee. The objectives had been cascaded to staff to ensure a shared understanding of the key outcomes for 2013-14. A suggestion was made that a KPI was included related to the use of associates. This would be considered as part of the Executive objectives for next year.

3 6.3 Particular attention was drawn to the following areas outlined in the submitted report:  The recruitment of a Director (Services) to replace the previous Deputy Chief Executive (Research and Policy) role which would support the development of the Strategic Plan to 2020. It was noted that the Head of Finance was now part of the Executive team which had been useful in linking financial aspects with strategic decisions.  The Grade Point Average (GPA) project was progressing well with 21 higher education providers testing a national GPA system which would review the implications for the student experience. A further 25 institutions had indicated their interest in engaging in a wider programme of activity.  The meeting with Mary McAleese (Chair of the EU high level group on the Modernisation of Higher Education in Europe) focused on the HEA’s involvement in the groups work that set out the delivery of 16 recommendations for improving quality in learning and teaching. Plans for the HEA to lead on a number of recommendations were also being progressed with Germany and Ireland.  A project with Sri Lanka and the World Bank had also been undertaken focusing of soft skills. Meetings had indicated an interest in the set-up of a body like the HEA.  A number of engagements with the sector were also highlighted including the National Teaching Fellowship Awards, the away day with PVCs from the Russell Group and events with the QAA including the joint QAA, HEA and HEPI seminar.

6.4 A query was raised in relation to the difficulty of obtaining externality particularly for promotion. The HEA were already considering how Principal Fellows could contribute to other areas of learning and teaching such as external referees. It was agreed that an update would be provided to the Board.

6.5 Further consideration would be given to the clarity of the language used in relation to CPD points and credits.

6.6 It was noted that at the Academic Practice Advisory Group a new provision for leadership development had been discussed. It was explained that this related to a request from Scotland for support on curriculum development and the roll out of learning and teaching strategies. The provision was being developed across the nations and incorporated thematic priorities.

6.7 Partnership working with a number of sector agencies had already been enhanced and two programmes were currently underway with the LFHE. Regular discussions would be held between the HEA and LFHE to ensure clarity of roles within the sector. The Board felt that this evidence should be highlighted with Capita.

6.8 The Board felt that international work could expose the HEA to a certain degree of risk financially and reputationally particularly in developing countries. It was suggested that the HEA should focus on other areas such as Europe and Australia with well-established higher education where the HEA’s experience and knowledge could be valuable.

4 6.9 The Board commended the report and felt that it was a good supplement to the e- bulletins that were received. It was noted that the level of information received was appropriate and relevant.

RESOLVED (HEAB 28/13) – That the update be noted.

5 (b) Performance against Operational Plan for 2012-13

RESOLVED (HEAB 29/13) – That the HEA’s performance in the academic year 2012-13 be noted.

(b) HEA Annual Report 2012-13 6.10 The Chief Executive introduced the annual report 2012-13 for external publication. It was explained that the report tried to bring the HEA to life with a greater focus on staff and roles within the HEA.

6.11 It was confirmed that the public benefit statement was included in the Financial Statements at agenda item 7b as required by the Statement of Recommended Practice (SORP).

6.12 It was agreed that all documents such as the Annual Report would be presented at the Board Away day.

6.13 It was suggested that next year it may be useful to include a number of graphs similar to those presented in the Operational Plan.

RESOLVED (HEAB 30/13) -That the Annual Report 2012-13 be approved for publication, subject to any final amendments of detail agreed by the Chief Executive.

(d) Pay Award 2013-14 6.14 The Director (Operations) introduced the proposed pay award for 2013-14 which had been supported by Finance and General Purposes Committee. The recommendations had been made with consideration of the public spending saving agenda, the higher education sector from which the HEA recruited most of its staff, the HEA’s current level of income and the need to manage within this level of income. Benchmarking had also been undertaken with comparative sector organisations and against Higher Education sector pay including UCEA.

6.15 An annual pay award of 1% was therefore recommended for the year 2013-14 with a 1.5% increase proposed for a total of 10 staff approved as Exceptional Performers by the Executive. The total cost was £68,575.

6.16 It was noted that many university staff would receive approximately a 2.4% pay rise as most staff were eligible for annual increments which did not apply at the HEA. However, it was felt that the 1% pay rise was appropriate given the current climate and that the HEA pay policy was more appropriate and in line with other sector agencies.

6.17 All staff would be informed of the outcomes of the pay award and that a number of staff had received exceptional performance awards.

6 RESOLVED (HEAB 31/13) (a) That a one per cent pay rise for all staff be approved, backdated to 1 August 2013. (b) That an additional 1.5 per cent pay award be approved for the 10 staff awarded an ‘exceptional performance’ rating, as approved by the Executive, and backdated to 1 August 2013.

(e) Strategic Risk 6.18 The Interim Company Secretary introduced the annual review of risk which outlined the current position in relation to the key risks associated with the delivery of the Strategic Plan to 2016 under the headings of impact, quality, reach and revenue. It was noted that the Senior Management Team reviewed strategic risk formally on a quarterly basis and the Audit Committee discussed and reviewed the risk register at each of its meetings. A review of the Risk Register would be undertaken with SMT and the Chair of Audit Committee in December 2013 to ensure it was still fit for purpose.

6.19 In summary the key strategic risks were:  That although there had been an increased emphasis on impact assessment, through the launch of the impact assessment framework, a greater focus was required to ensure a consistent approach.  Concerns had been expressed regarding the HEA website which was a vital showcase of the HEA’s work and a good quality experience and service was essential. It was noted that plans were in train for redevelopment of the website.  As the HEA began to develop its reach internationally and to progress business development, it needed to ensure that there is a balance between these areas and core services.  Additionally, as business development plans mature, the HEA needs to take advantage of opportunities and train staff appropriately. A new Business Development Group had been established to drive the commercialisation agenda and explore alternative sources of funding.

6.20 The Chair of the Audit Committee commented on the report explaining that the risk register was going through a process of evolution and although it had the right components, further clarity was required on the order. This was particularly important given the changes in structure and the development of the Executive Objectives.

6.21 The Scottish referendum for independence was considered. It was noted that scenario planning was already underway and consideration given to whether a separate HEA would need to be set-up in Scotland.

6.22 In relation to ongoing actions and monitoring under Revenue it was queried why monitoring and management of financial commitments across each academic year was red. It was explained that more emphasis had been placed on Assistant Directors to take responsibility and quarterly meetings had been set up to review budgets against the operational plan.

7 RESOLVED (HEAB 32/13) (a) That the strategic risks associated with the delivery of the Strategic plan be noted. (b) That the strategic risk register, as at the end of October 2013, following its review by the Audit Committee, be noted. (c) That the risk appetite statement would be reviewed by the Board in April 2014.

7.0 Financial Year end 2012-13

(a) Audit Committee Annual Report for the year ended 31 July 2013 7.1 Geoff Donnelly, Chair of Audit Committee introduced its annual report to the Board and the Chief Executive. Particular attention was drawn to the internal audit reports and the Committee had requested in future that internal audits took impact into consideration.

7.2 The report highlighted the work of the Audit Committee over the last academic year and provided an opinion on the adequacy and effectiveness of the arrangements for risk management, control and governance and value for money which the Board was asked to review before its consideration of the financial statements.

7.3 It was the Committee’s opinion that the HEA had adequate and effective arrangements in place to provide appropriate assurance to the Board over the effectiveness and adequacy of the risk management, control and governance processes and the arrangements in place to promote value for money. There was nothing to report following the private meeting between Audit Committee members and both the internal and external auditors.

7.4 The Committee confirmed that the number of outstanding items was low and that if any high or critical recommendations occurred they were reported back on a timely basis. In some cases recommendations are only partially implemented as it had been agreed that full implementation was no longer appropriate.

RESOLVED (HEA 33/12) – That the Board considered and noted the opinion of the Audit Committee.

(b) Report and Financial Statements for the year ended 31 July 2013

7.5 The Director (Operations) introduced the report and financial statements for the year ended 31 July 2013. It was reported that the financial results and in particular, the operating and financial review, had been considered by the Finance and General Purposes Committee at its meeting on 23 October 2013. The Audit Committee had subsequently scrutinised the report and financial statements at its meeting on 31 October 2013.

7.6 Income was 15% lower than the previous year which reflected the final reduction in funding and a number of ring fenced projects coming to an end. There had been an increase in subscription income from 34 new subscribers along with an increase in payroll which reflected the full year effect of a full complement of staff.

8 7.7 The Chair of the Audit Committee advised the Board that, in accordance with established practice, the Committee had met privately with the internal and external auditors on 31 October 2013 in order to assure itself of the external auditor’s satisfaction with the overall management of the HEA and the co-operation received in the audit of the financial statements. No concerns arose from the meeting and the external auditor gave an unqualified opinion on the 2012-13 accounts.

7.8 The Audit Committee confirmed that the representations made in the letter of representation to the external auditor were accurate and that the going concern basis had continued to be adopted in preparing the financial statements.

7.9 In relation to the public benefit statement, it was confirmed that the recommendations from HEFCE had been used to compile the statement and comparisons had been made with board members institutional financial statements. Additionally, it was explained that the format of the financial statements were dictated to some extent by the SORP.

7.10 It was explained that the Universities Superannuation Scheme (USS) had provided the annual formal statement which had been included in the financial statements.

7.11 A query was raised in relation to annual subscription income. It was confirmed that subscription invoices had been sent out earlier this year. It was noted that this would alter the debt profile.

RESOLVED (HEAB 34/13) (a) That the statement of corporate governance and control and the audit financial statements for the year ended 31 July 2013 be approved. (b) That the Chair and Chief Executive be authorised to sign the financial statements on behalf of the Board.

(c) Letter of Representation for the year ended 31 July 2013

RESOLVED (HEAB 35/13) - That the Chair and the Chief Executive be authorised to sign the Letter of Representation on behalf of the Board.

(d) HEA Reserves Policy 7.12 The Director (Operations) presented the Reserves Policy and confirmed that Finance and General Purposes Committee had reviewed the Policy. The Committee agreed with the recommendation to continue to move the reserves towards the middle of the range which was currently set at 4-6 months fixed costs (£3.351m - £5.027m).

7.13 It was also noted that at present the pension deficit was unquantifiable. Audit Committee had also made a recommendation for the Executive to review the Investment Policy.

RESOLVED (HEAB 36/13)

9 (a) That the existing reserves policy (equal to four to six months’ fixed costs) be approved. (b) Consideration would continue to be given to steps to build reserves towards the levels recommended in the policy and ensure the ability of the HEA to meet its commitments to clients and staff should its levels of income reduce in future.

10 (e) Review of Financial Regulations

RESOLVED (HEAB 37/13) – That the Financial Regulations for the financial year 2012-13 be approved following minor amendments.

8.0 Appointment of Directors

8.1 The Board considered a report from the Interim Company Secretary relating to the reappointment of Board Directors in accordance with the Articles of Association and succession planning.

8.2 A concern was raised in relation to consistent representation from the National Union of Students (NUS) and it was suggested that the Executive consider a second student voice on the Board potentially from the Student Advisory Forum although preferably an alternative from the NUS.

RESOLVED (HEAB 38/13) (a) That the appointment of Mr Johnny Rich for a second term of office until November 2016 be approved. (b) That the reappointments made by the funding bodies be noted. (c) That Professor Sir Bob Burgess would have been due to stand down at the AGM, however, following a written special resolution agreed by the Board in April 2013, Professor Sir Bob Burgess would continue as Chair until July 2014. (d) That Iain Rolland and Izhar Chaudhary are re-appointed as co-opted members of Audit Committee until February 2017. (e) That a recruitment exercise would be undertaken for two Board members with skills in the following areas: Commercialisation; Learning and Teaching in national and international markets; and Information Systems. (f) That a proposal would presented to the Board for additional student voice representation.

9.0 Board Committees – Updates and Key Messages 9.1 The Board heard from the Chairs of the Audit and Finance and General Purposes committees respectively and received an update on the key issues and recommendations from each of those meetings.

RESOLVED (HEAB 39/13) - That updates from the Chairs of the Committees were noted.

10.0 Statutory Returns for the year ended 2012-13 - RESOLVED (HEAB 40/13) – That the statutory and accountability returns made by the Company Secretary on behalf of the Board during 2012-13 and the ongoing maintenance of the relevant statutory records be noted.

11.0 Any other business

11 11.1 The Board congratulated Jayne Mitchell on her appointment to Deputy Vice Chancellor for academic affairs at Bishop Grosseteste University.

11.2 The UUK Policy Advisor noted that comments had not been expressed during the Board meeting due to a lack of interest but due to the excellent papers that had been presented.

12.0 Date of next meeting – 5 & 6 February 2013, 12.00 noon to 3pm, HEA Offices and Cedar Court Hotel and Spa, York

The meeting concluded at approximately 12.35pm.