No crooks, no cronies, no cowards

23/06/2017 15:11:16 | with 1 comments

This quote is taken from the Tyson report into the appointment of non-executive directors to corporate companies (i.e. the for-profit sector).  It is, however, not a bad mantra for those of us involved in governing our schools.

Governing boards are responsible for the values and ethos of the organisation and, when presentations are being delivered about schools, the phrase ‘we are a values led organisation’ frequently trips of the tongue. Easy to say, but it needs to be meaningful – the organisation’s particular values should be regularly discussed and lived - whether you govern in a small maintained primary school or a large MAT.  They need to be evident in the day to day practice in the school - that doesn’t mean that we have to say maths is taught in a selfless manner etc. - but, if the board can’t demonstrate how its values are evident in the school then can you be sure they are anything more than a piece of paper?

Sadly, yet again last week we had evidence that ethical behaviour is not always at the forefront of thinking. The final set of accounts of the now defunct Lilac Sky Schools Trust were published. The trustees who signed off those accounts were put in place in July 2016, just six weeks before the end of the accounting year.

The accounts make unedifying reading. The members and trustees in place before the Education Funding Agency took control fitted firmly into the “crony” category – several indeed were related and where they weren’t related had connections through other businesses to the founder of the trust and former CEO. On stepping down as CEO the founder had been given a role as internal auditor, baffling in the sense that his expertise is educational improvement not financial, but more critically in that his wife was the managing director and his other companies provided some services to the trust – not so much an elephant in the room as a whole herd.  

In terms of conflicts of interest, perception is often as important as whether the individual benefits.  Charity commission guidance (which NGA promotes) starts from the premise that, where possible, conflicts should be avoided.  If the ethics don’t resonate with you then perhaps the bright glare of publicity might – will your structures and people pass the tabloid test? If the education or local press reported on you would it look OK? Or would it look like a bunch of mates scratching each other’s backs.

In the accounts, the Accounting Officer (i.e. the interim chief executive) states that the Founder, during the time he was acting as internal auditor, set up a standing order from the trust to pay one of his own companies.  Not something you would generally expect an internal auditor to be able to do and, indeed, the accounting officer notes he “should not have had access to the Academy Trust’s bank accounts”. This isn’t just a perceived conflict of interest, it’s a glaringly obvious pecuniary interest. How could even those related and inter-connected trustees and members have thought this was appropriate and not prevented it? Definitely an air of cowardice appearing on the horizon.

The Education and Skills Funding Agency (ESFA) acts on behalf of the Secretary of State for Education as the principal regulator for academies and, while it can be difficult to assess whether there is any financial wrongdoing, it cannot be difficult to look at a set of accounts and work out that the a significant proportion of members and trustees have deep and meaningful connections to each other. This was the case in Lilac Sky for a number of years; why was allowed to continue? Did no one notice or did they not realise it was important?

Of course, there is another set of values applicable to all those governing in the state funded sector – the Nolan principles of public life – if you have a code of conduct they almost certainly feature somewhere in it. The Nolan principles are non-negotiable they should be known to all those governing and the senior leadership team and should form part of your accountability mechanisms. When did you last discuss them? Perhaps it’s time you refreshed your memories and practice.

We understand that the ESFA is still investigating the financial affairs of the defunct trust, let’s hope we don’t have a triple C whammy.

By Gillian Allcroft, Deputy Chief Executive of the NGA.

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