New governance models for schools

With nearly 9,500 schools and nearly four million students, today’s education system in Australia is far more complex, risky and challenging than in the past. That’s why new governance models are emerging.

The stakes are high when it comes to reputation management in today’s Australian schools and a modern governance model is vital. When things go wrong and school boards become the subject of widespread adverse comment, they have “failed in their duty to protect the brand”, says John Simpson MAICD, a member of the Monash University council and former board member of Melbourne’s Scotch College.

It is this intangible asset that enables schools to set tuition fees and increase them every year. “Those engaged in the business of reputation management and enhancement know only too well that it takes years to build and consolidate a leading reputation. Of course, it can be lost in days, or even hours,” he says.

The situations are a salutary lesson for any potential board director — being on a school board is no longer for the well-meaning amateur. In the past few years, the duties and responsibilities of such positions have been transformed — they are now serious roles that require skills and training. Government schools are regulated by the relevant state departments of education, which are also important stakeholders in independent schools because they also receive government money. A key issue for directors is the operation of the Corporations Act 2001 (Cth), as most schools are incorporated entities. This means directors must act in the interests of the school and are liable for any breach of their fiduciary or legislative obligations.

New governance models emerge

One school moving to a more modern governance model is Sydney’s Saint Ignatius’ College Riverview, which is establishing a new incorporated legal entity responsible for local governance and management, its functions overseen by its own board. The Anglican Schools Corporation is also in the process of adopting a new governance model.

Rosina Hislop FAICD, an experienced commercial director, is also the chair of Seymour College and a director of Prince Alfred College (Adelaide), and presented the AICD webinar series on school board governance. “There’s been a shift to more corporate regulation in general, not just in schools,” Hislop says.

Schools are heavily regulated because they look after children under 18, she explains, adding that schools and their directors are grappling with more complex issues than in the past — and changing roles. “The nuclear family has changed and schools can be a haven of stability for a child. In addition, mental health issues are more pronounced and the school is more involved.”

Parents have higher expectations because they are paying for a service and want a result. In relation to dynamic issues such as social media, parents are looking to schools for advice. “They are asking schools to prepare their children for the future of work, not just to sit exams,” says Hislop.

Case studies – how to fix a school crisis

When a crisis emerges, fast action is needed. This is how the boards at two exclusive private schools coped with management crises.

Trinity Grammar

In February 2018, long-time staffer and deputy headmaster of Melbourne’s Trinity Grammar, Rohan Brown, was dismissed by the school council for “contravening disciplinary procedures” when he cut a student’s hair on school photo day.

Hundreds of furious parents and former students of the Anglican boys’ school confronted the school council at a special meeting and more than 5163 signed an online petition calling on the school to “Bring Brownie Back”. Media and social media coverage was intense. Footage from the meeting was posted, mobile billboards were set up outside the school and leaflets were distributed calling for headmaster Dr Michael Davies’ sacking.

The Old Trinity Grammarians’ Association demanded the removal of the school council. The council commissioned an independent review of the process that led to the sacking, headed by former Federal Court judge Ray Finkelstein AO and barrister Renee Enbom. The review found that while Brown had breached the school’s code of conduct, and this may have justified dismissal, Davies had chosen not to dismiss him. It found that the school council did not have the requisite authority. The council later reinstated the teacher and apologised.

The school council agreed to undertake a full review of its governance frameworks, including its constitution and the council composition. The council agreed to resign once suitable appointees could be found. The headmaster also later resigned.

Kambala

In April 2017, the principal of Sydney day and boarding school Kambala, Dr Debra Kelliher GAICD, resigned suddenly after three and a half years in the job. Staff had taken a vote of no-confidence in her. In October, Kelliher took her former employer and two teachers to the NSW Supreme Court, claiming she had been defamed in emails and rendered virtually unemployable.

In court proceedings in February 2018, as reported in The Australian, Kelliher’s barrister Matthew Richardson said the former principal had uncovered fraudulent activity at the school and had a key role in “minimising debt” at Kambala. He told the court that “things had become so toxic” within Kambala that the former principal had no choice but to resign. Barrister for the school Clarissa Amato said Kelliher’s reputation could not be further harmed because she had “seriously lost the confidence of teachers, staff and parents”.

The school council, chaired by Sally Herman GAICD, a Kambala old girl, announced a review of the executive structure, introducing regular “listening” sessions and improved communication with parents. It has also seen changes on the council. The matter has been listed for jury trial.

Deciding on the governance model

The Association of Independent Schools in NSW provides practical, hands-on advice to school directors and principals. CEO Dr Geoff Newcombe AM says an important consideration for any incoming board director is determining which model of governance is applied at the school. “The CEO model means that there is almost full delegation to the principal and the board operates at a higher policy level. But at a hands-on community school like Steiner or Montessori, the board often gets involved in more operational matters.”

“Corporate directors want everything quantified, but how do you measure a school’s pastoral side?” Dr Geoff Newcombe AM CEO of The Association of Independent Schools in NSW

Directors must have a good insight into the relationships between the chair and the principal, and the board and the principal. It is also crucial to know the composition of the board. “There can be a wide difference of view,” says Newcombe. Such differences can lead to a clash between soft and hard metrics (usually the school’s Year 12 results). “Corporate directors want everything quantified, but how do you measure a school’s pastoral side?”

St Philip’s College, Alice Springs

Libby Prell FAICD has been chair of St Philip’s College, a Uniting Church co-ed high school, for almost two years and a board member for 10. She was formerly chair of the Alice Springs Steiner School.

Accountability is a major consideration, she says. “There aren’t many jobs or CEOs with the scope and responsibility of a school principal; to be accountable for hundreds of students, manage the compliance and liabilities of running a business, lead the teachers and ancillary staff — in some cases over 100 people. My role is to ensure the principal has a clear framework to work within and thrive, which means defining the roles and responsibilities of chair, board and principal.

In June 2018, the school had 746 students, (with 50 boarders), 72 teachers, 70 other staff (maintenance, admin, library) and $15.2m annual gross income (2016).

Prell says she reminds her principal Roger Herbert, ‘Tell me if I’m crossing the line, but I’ve observed this operationally and feel obliged to feed that back to you’ — and that he can feel safe having an open conversation with me at any time. You must have a transparent, trusting culture where anyone can bring a problem to the principal or the board. The school is a team and must act like it.

“We are going through the process of incorporation from the Uniting Church while remaining a Uniting Church school, and we’re aware that in the eyes of ASIC or ACNC we, as directors, are accountable. She also reminds Herbert, ‘We don’t pay you enough to make all of the big decisions, so use the board to sign off on significant issues — it’s not taking away control, it’s protecting you’.”

Succession planning

“We’re currently looking at our board skills matrix and Gen Y representation. We have an under-40 position on the board because this age group has such a different perspective on the world. The world is ever-changing and school boards need to keep up. Schools are responsible for innovation and the culture of innovation comes from the board.”

Before Herbert joined St Philip’s, the previous principal of 30 years retired — at around the same time as the deputy principal, chair and business manager. The school turned over these four roles within an 18-month period. “What got us through was clear communication to our entire community, and a collaborative board. A key role of the board is succession planning and you need to ensure you have open conversations around it.

“We had to keep our finger on the pulse to ensure we didn’t lose staff or students, as people had strong relationships with the former principal. You’re only as good as your staff, so now, instead of a one-page registrar’s report of students in and students out, we get a six-page report with the reasons why.” The principal also submits a very comprehensive staffing report.

In terms of recruiting a parent as a director, the questions are no different. What are their skills and experience as a board member? What is their experience in managing a $20m budget and what is their understanding of that financial responsibility? What is their ability to look at the school’s needs from a director’s perspective, not just a parent’s?

”We have a financial obligation to ensure the future sustainability of the school while being cognisant of the parent body.” Libby Prell FAICD

Fees and funding

“No matter whether you’re a $30,000-a-year (fees) private school or an $8000-a-year one like we are, the price elasticity of your parent body is a challenge. We have a financial obligation to ensure the future sustainability of the school while being cognisant of the parent body and their financial situations. We must look after the community and the parents.”

Crisis management

In 2016, a student at St Philip’s College dressed up as Adolf Hitler for a Book Week assembly while Jewish exchange students [from Melbourne’s Bialik College] were visiting the school. The news of the incident was picked up by local media and spread on social media. It was world news within hours.

This was a challenging time for the student, the school and the teachers. It was a good test of a new principal, as Herbert had only been in the role two months. He made immediate contact with the principal of the visiting school, apologised personally and visited the parents of the student. “We didn’t try to challenge or defend it. It was an error in judgement,” says Prell.

“When we analysed the incident, it wasn’t about judgement or blame, it was about learning from it and thinking about how we approach and respond to crises. You need to be on your toes and respond quickly.”