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Corporate Governance

Corporate Governance
“Corporate governance is concerned with the source and distribution of legitimate authority for the decisions, liabilities and assets of the (corporate) organisation. As such, it is the prime focus for the systems, structures, rules and procedures for making decisions on corporate affairs, and provides the framework in which the clerk operates. Any organisation, public or private, including the largest and smallest HEI has such a governance framework, which should also define the importance of checks and balances for the responsible exercise of executive or managerial authority. Such a framework needs to be 'transparent' in the sense that processes are widely known within the institution, have the confidence of the key public stakeholders (eg the funding councils), and result in outcomes being communicated as widely and as openly within the institution as is consistent with the matters being dealt with. Overall the designation of this framework as 'corporate' governance acknowledges both the corporate status of the organisation (as a 'legal person'), and also that the ultimate governing authority almost invariably rests with a group of people - the governing body - which itself has a corporate identity (and collective responsibility) distinct from and 'superior to' that of any of its individual members.
As a consequence, corporate governance is concerned with the authority of the governing body and its delegation, most obviously and directly to the chief executive, but also (and in accordance with the governing instruments) to other committees, subsidiary bodies and individuals.
In most modern HEIs (or 'corporations'), considerable decision-making power and responsibility is delegated to the senior managers and beyond, although the degree of decentralisation and delegation varies considerably. This means that good corporate governance relies not only on the governing body, nor even simply on the governing body and the chief executive, but also on all ‘delegate’ bodies and individuals. Thus, whilst sound corporate governance universally depends upon a transparent accountability structure and clear protocols for making and reporting decisions, in HEIs this is likely to include not only the senior management team, but also senate/academic board, subsidiary companies and a wide variety of other bodies.”[1]
[1] A Guide for New Clerks and secretaries of Governing Bodies of Higher Education Institutions in the UK – Leadership Foundation for Higher Education, 2007, p. 23