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Recommendations on Corporate Governance

UWI Chancellor Sir Hillary Beckles – might be fighting to remain in the position

The operation of the University of the West Indies has come under scrutiny by a high-powered committee that was set up to review its performance over the years.

Headed by former President of the Caribbean Court of Justice (CCJ), Sir Dennis Byron of St. Kitts, the committee has submitted its detailed report which pointed in the direction of several major weaknesses in the structure of the institution.

The report is now attracting attention throughout the region as its contents have found its way into the hands of the media.

Today, THE NEW TODAY focuses on some of the governing bodies with UWI:

General features of proposed Advisory Committees at Regional and Campus Levels

(a) Except for the Audit Committee, which would have only external members, the Advisory Committees should have a mix of internal and external members.

The Chair and at least 2 other members should be external persons selected with reference to their demonstrated knowledge, skills and abilities in the areas falling under the mandate of the relevant Committee.

The Commission is conscious of the fact that service on these Committees requires a high level of voluntary, uncompensated participation and expects the University to devise means to make members remain engaged and committed and feel that such participation is worth their time and effort.

(b) The Chairs of all the Committees and all other external members must be selected from among the membership of the Council.

(c) The number of members on a Committee should not normally exceed 13, including the Chair, but it is accepted that in some cases, this number may have to be exceeded to satisfy the need for adequate representation (for example, the Student Success Committees).

So as to foster greater integration of the regional and campus governance systems, it is suggested that on each Committee at the regional level there should be representation by at least one member of each of the corresponding campus committees, except where on account of the size of the regional committee not all corresponding campus committees can be represented at the same time.

(d) Members of each committee would be appointed by the Council and would normally serve for 3 years (except a member who is elected by a constituency to be its representative for a shorter period, such as a student or staff representative.).

The membership of appointed members may be renewed subject to a limit of 3 terms, unless the Council decides otherwise in relation to a particular member.

(e) Other persons may be invited to attend meetings of Committees to provide information on specific topics or issues.

(f) Meetings must be held at least 3 times per year: additional meetings may be held at the call of the Chair or if required by the Council(s) or their Executive Committees. There must be a formal agenda for each meeting and Minutes must be kept.

(g) The University Registrar or Campus Registrar, as the case may require, must provide secretariat services for each Advisory Committee, except that the University Registrar should serve as the Secretary of the Governance Committee and the Finance and Capital Allocation Committee.

(h) Each Committee must submit, annually, a Report to its Council or, if the Council so directs, to the Executive Committee of that Council.

Main Features of the Proposed Advisory Committees

The Commission recommends that the Governance Committee should be established at the regional level only.

Purpose

(a) To keep under review and advise Council on the University’s governance arrangements, ensuring that the University pursues good practice, and complies with the Charter, Statutes and Ordinances and external governance requirements

(b) To advise the Council on all matters relating to the process for the appointment of Council members and their induction, mentoring, development and appraisal

(c) To recommend the appointment of new Council members and the Chairs of Council’s committees.

Membership

A membership of thirteen (13) is proposed:

  • Chair (external member)
  • Vice-Chancellor, ex officio
  • 1 Campus Principal (selected on a rotational basis)
  • 2 representatives of Governments (selected on a rotational basis)

one (1) student member

  • one (1) elected faculty member
  • Five (5) external members of Council (one from each campus country) with experience in corporate governance, nominated by the Chancellor
  • Representative of the Central Executive of the Alumni Association

The University Registrar serving as Secretary; University Counsel in attendance.

Functions

These would include:

(i). Develop a committee member recruitment strategy for members of the Council, Campus Councils and their Committees, taking into account desired skill sets and diverse perspectives

(ii) Continually identify and recruit candidates for membership of the regional and campus advisory committees, consistent with such strategy

(iii) Develop and oversee programmes for the induction, mentoring, development and appraisal of Council members and advisory committee chairs (to include making available a current and complete Council Manual containing the key documents such as University’s Charter, Statues and Ordinances, Vision and Mission Statements, Strategic Plan and key University policies)

(iv) Oversee a systematic and transparent selection process for the appointment of members of Council and make recommendations to the Council for the appointment and re-appointment of members

(v) Keep under review and make recommendations on Council member succession

(vi) Develop and review other governance policies to guide effective oversight and thoughtful planning

(vii) Review the performance of the Council and the Campus Councils and their committees, including the effectiveness of meetings, and make recommendations, as appropriate

(viii) Review the performance of members of the Council and the Campus Councils and recommend retention or removal of incumbent members, as appropriate.

Finance and Capital Allocation Committee

No aspect of the University is more problematic than its current financial challenges.

The most urgent task of the Finance and Capital Allocation Committee would be to focus on the development and implementation of strategies at (both regional and campus levels) to deal with the massive deficits, and to finance key strategic initiatives.

While it is proposed that this Committee should be established both at the regional and campus levels, it is recognised that the Committee at the regional level would have a wider remit than the campus Committee, while the latter would not have capital allocation among its functions.

Purpose

To review and make recommendations on:

(a) Financial Policies of the University (including policies with respect to the control and management of recurrent financial resources, the ownership, management and divestment of assets, investments, borrowings and management of funds)

(b) Budgeting Process – the resources available to the University to achieve its goals as put forward in the annual budget of the University

(c) Financial Performance – regular management reports to the Council on the financial performance of the University against the approved financial targets

(d) Financial Reporting – the Annual Financial Statements of the University and, in conjunction with the Audit and Risk Committee, recommend to the Council the adoption of those statements

(e) Commercial Activities – the commercial activities of the University, including the consideration of all proposals for new business ventures

(f) Capital Budget‐ review, and advise the Council on proposals submitted for expenditure on capital projects above defined limits.

(g) Investments – scrutinise and advise on investment decision making processes, and ensure adequate monitoring and evaluation of the performance of these investments.

Related:  Human Resources Committee

Membership

At the regional level:

A membership of twelve (12) is proposed:

  • Chair (External)
  • Vice-Chancellor or nominee
  • Campus Principals
  • Chairs of the Campus Finance and Capital Allocation Committees

University Bursar /Campus Bursar should be invited to attend meetings.

At the Campus Level

A membership of 9 is proposed:

Chair (external)

  • Principal and Deputy Principal
  • 2 other external members, ideally drawn from the business community (with one of these having expertise in construction and facilities management), · 1 representative of Deans
  • 1 representative each of: academic staff, non-academic staff and students

Functions

These would include:

At the Regional Level

(i) Review and recommend to the ECC (for approval or recommendation to the Council in accordance with the scheme of delegation) the University’s budget framework, which sets out the guiding principles relating to costs, government funding and tuition fee levels

(ii) Endorse the underlying principles surrounding tuition fee levels, as well as actual recommendations for the fiscal year. (Consultation with students about tuition and mandatory fees)

(iii) Assist the ECC in enhancing the University’s investment position or portfolio performance

(iv) Periodically review endowment policies approved by the University

(v) Ensure that a sound resource-allocation framework is in place and that decisions are made within the approved framework

(vi) Review trends which have implications for the financial health of the University or which have the potential to impair the University’s Strategic Plan

(vii) Review and recommend policies and practices that reflect evolving improvements to the financial strategies and operations of the University.

(viii) Advise and assist the Vice-Chancellor and Senior Management Committee in advancing the finance-related objectives of the University’s Strategic Plan

(ix) Receive and review reports of The UWI Pension Plan, including such matters as the performance of investment fund options, the governance structure, including the manner in which the University is meeting its fiduciary responsibilities to pension plan members and recommend to the Council any proposed changes to the Pension Plan Document.

At both the Regional and Campus Levels

(i) Review and recommend to the ECC the annual budgets

(ii) Monitor the financial health of the University through projections and forecasts, recommending corrective action where required

(iii) Review actual versus budgeted results on a quarterly basis

(iv) Review and advise on capital expenditure proposals above the defined limit.

(Requests at the campus level must be first approved by the Finance Committee of the Campus, and the Campus ECC before presentation to the University Finance Committee, ECC and Council; proposals at the regional level must also clear this Committee and the ECC before submission to Council)

(v) Review debt management policies, including the extent and methods of obtaining external borrowing for operating and capital expenditures

(vi) Review and recommend policies and actions that enhance the University’s financial position or financial performance (cost control or revenue generation)

(vii) Review proposals for the engagement of the University in business or commercial activities and monitor and report on all business arrangements and commercial activities in which the University is involved

(viii) Develop and implement strategies, policies and guidelines to promote and embed within the University’s processes and culture, greater economy and effectiveness, collectively known as “value for money”.

The Committee must be required to provide an annual report for consideration by the Audit and Risk Committee.

Currently, the University has functioning Audit Committees both at the regional and campus levels (Ordinances 11 and 12). As outlined previously, the UMAD Report noted that “…while a Risk Management system is in place, the internal staffing to undertake this function is either absent, understaffed, or at times not suitably qualified to undertake this function”.

Under Ordinance 11, the University Audit Committee is required “to report to the University Council on the work and findings of the internal auditor and on any commentary by the external auditor on the financial management of the University.”.

Ordinance 12 requires the Campus Audit Committee to:

(a) review and assess the findings and recommendations of the University Audit Committee concerning the operations of the Campus;

(b) review and approve plans concerning the Campus;

(c) recommend the re-appointment or any change in the appointment of the Campus external auditors; and

(d) monitor the implementation of recommendations of the Campus external auditors.

The Commission recommends that, as set out below under “Functions”, the statutory mandates of these committees should be broadened in relation to their audit function and extended to include oversight of risk management, corporate compliance and quality assurance. The Ordinances should be amended to this effect.

Purpose

The purpose of the Audit and Risk Committee is to:

(a) Assist Council (through the ECC) in its oversight of the integrity of the University’s financial reporting, including supporting the Council’s responsibilities regarding financial statements and the financial reporting systems and internal controls

(b) Monitor, on behalf of Council (through the ECC), the effectiveness and objectivity of internal and external auditors

(c) Provide input to the ECC in its assessment of enterprise risk and determination of risk appetite as part of the overall setting of strategy for the University

(d) Assist the ECC in its oversight of the University’s risk management and corporate quality assurance framework.

Membership

At the Regional Level

A membership of nine (9) external persons is proposed:

  • Chair (External)
  • Chairs of the Campus Audit Committees
  • 2 external members with experience, respectively, in corporate risk management, corporate compliance and corporate quality assurance

At the Campus Level.

A membership of 4 external persons is proposed.

  • Chair
  • Chair of the Campus Audit Committee
  • 2 external members with experience in corporate risk management, corporate compliance and corporate quality assurance.

Functions

These include:

(i) Monitoring the integrity of the financial statements of the University, including its annual report relating to its financial performance, and review and report to the ECC on significant financial reporting issues and judgements which those statements contain, having regard to matters communicated to it by the auditor

(ii) Proposing a framework for Corporate Quality Assurance

(iii) Reviewing and challenging where necessary:

  • the application of significant accounting policies and any changes to them;
  • the methods used to account for significant or unusual transactions where different approaches are possible
  • whether the University has adopted appropriate accounting policies and made appropriate estimates and judgements, taking into account the external auditor’s views on the financial statements
  • all material information presented with the financial statements, including the strategic report and the corporate governance statements relating to the audit and to risk management

(iv) Reviewing:

  • the University’s Risk Management framework
  • the robustness of the University’s risk management policies and processes and their fitness for purpose when tested against the Council’s Enterprise Risk Management strategy and risk appetite
  • regular assurance reports from management about the Quality and Risk Management function, regulatory compliance and that University and Campus ECCs may request from time to time
  • the timeliness and effectiveness of corrective action taken and the timeliness of the report made with respect to such action.