Chair of an FE College Finance Committee:
Non-Executive Director Equivalent Role
Role Outline and Attributes Needed
College governance overview
Good governance is an essential component to the successful running of colleges and the delivery of impact through education to young people.
All colleges in England have a governing board. The size varies but is usually in the range of 10-18 members. The governing board consists of highly committed external members, who are volunteers, drawn from a range of backgrounds including business, local government and education, along with staff and student members. Each member serves for a pre-determined length of office, usually 3 or 4 years (re-appointment for one additional term of office can be an option).
The governing board oversees the strategic direction of the college. It appoints senior post holders who are responsible for running the college on a day-to-day basis. The governing board is also expected to:
Ensure the solvency of the college
Safeguard public funds and assets
Approve the annual budget
Determine the college mission
Effective governance provides strategic direction and control to colleges and providers by creating robust accountability, oversight and assurance for their educational outcomes and financial performance.
Work on these strategic activities is usually delegated to a series of committees that sit under the main governing board, bringing their reports back into the main Board for approval and final sign-off. Each committee will have specific Terms of Reference that reflect the characteristics of each college. One such committee is the finance committee.
As chair of the finance committee you will be a member of the main college governing board.
Role of the finance committee
The finance committee is a smaller committee than the main governing board, usually under eight members. Terms of Reference will differ across colleges. However, there are broad functions that it will be responsible for delivering that will be common, as follows:
- To give assurance to the main governing board and hence the college executive team on the suitability and appropriateness of the college’s financial strategy and policies within the context of college’s overall objectives and strategy. This is likely to include: reviewing financial plans and budgets; monitoring financial performance against budget; reviewing funding, banking and other financing arrangements; and approval of capital projects and other major commitments.
Strategic and annual reviews
- Review annually the financial plans for the college.
- Review the annual financial statements, particularly in relation to financial strategy and performance.
- Appraise and make recommendations on the annual income and expenditure budget for the forthcoming year.
- Appraise and make recommendations on the budgeted cash flow and capital expenditure for the forthcoming year.
- Review the college’s long-term forecasts of income and expenditure as submitted to the Higher Education Funding Council for England (HEFCE).
- Review the college’s capital programme which provides the context for consideration/review of any capital project proposals.
- Review annually any investments and the achievement of investment returns for endowment funds.
- Consider and review reports/updates on the financial position of current capital projects.
- Consider and review advice from bodies, as appropriate, in respect of any companies in which the College has a financial investment or shareholding, and request financial reports from these companies as necessary.
- Consider and review areas relating to college banking arrangements and any appropriate credit agreements/arrangements over the short and long term
- Consider and review the college’s processes and setting of tuition fees and course costs.
- Consider and review any proposed irrecoverable debts or overpayments, written off losses and disposal of obsolete equipment.
- Consider the financial risks to the college, together with the financial implications of non-financial risks, and monitor performance against the associated risk management plans.
- Liaise where appropriate with relevant Committees such as audit and risk committees.
- Consider reports from HEFCE, and other statutory bodies in terms of potential implications for college business and financial implications of compliance.
- Report to the main governance board through the minutes of each meeting of the finance committee, together with an oral/written report by the chair.
Chair of the finance committee
The chair’s role is key to the successful functioning of the finance committee, and the delivery of robust information to the main Board to enable it to make effective strategic decisions. As such, the chair needs to not only possess skills in strategic leadership and chairing meetings but also demonstrate robust financial awareness and the ability and confidence to manage budgets in the range of £12 million to £120 million.
- Volunteer role
- 4-5 meetings throughout the year plus main board meetings
- Usually no meetings during August or other holiday periods
- Three-year or four-year term of office (can be resigned)
- Will require commitment and time outside meetings to read papers
- Supported by a clerk (paid role) to organise agendas, papers etc.
You receive in return: excellent non-executive director equivalent experience for your CV, the opportunity to meet a range of highly skilled professionals and contacts, the opportunity to give back to your community, and most importantly the knowledge that your input has impacted literally thousands of young people, often some of the most vulnerable, to continue their education in a financially secure college which can afford to support and resource their learning.
In addition, the Department for Education has identified seven personal attributes of board members that are as important as their skills and knowledge:
- Committed – Devoting the required time and energy to the role and ambitious to achieve best possible outcomes for young people. Prepared to give time, skills and knowledge to developing themselves and others in order to create highly effective governance.
- Confident – Of an independent mind, able to lead and contribute to courageous conversations, to express their opinion and to play an active role on the board.
- Curious – Possessing an enquiring mind and an analytical approach and understanding the value of meaningful questioning.
- Challenging – Providing appropriate challenge to the status quo, not taking information or data at face value and always driving for improvement.
- Collaborative – Prepared to listen to and work in partnership with others and understanding the importance of building strong working relationships within the board and with executive leaders, staff, parents and carers, pupils/students, the local community and employers.
- Critical – Understanding the value of critical friendship which enables both challenge and support, and self-reflective, pursing learning and development opportunities to improve their own and whole board effectiveness.
- Creative – Able to challenge conventional wisdom and be open-minded about new approaches to problem-solving; recognising the value of innovation and creative thinking to organisational development and success.