External reviews of governance: guide for schools and academy trusts

How to arrange an effective external review of governance for your school or academy trust, and improve the performance of your board.

Applies to England

Contents

1. Overview
2. What is an external review of governance?
3. Why are ERGs important?
4. ERGs of multi academy trusts (MATs)
5. Find a reviewer
6. Things to consider when commissioning a reviewer
7. What to expect from your external review

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Overview

This guidance has been developed with support from the Confederation of School Trusts (CST) and the National Governance Association (NGA).

Who is this publication for?

This information is for:

• local authority (LA) maintained schools and academy trusts: academy trustees, governors, senior leaders, local governors, governance professionals (clerks) and academy members
• foundations, sponsors and others such as diocesan authorities with an interest in the governance of schools
• pupil referral units, sixth-form colleges and general further education colleges

Terminology

Throughout this document:

‘The board’ should be taken to mean the accountable body for the school or group of schools. In local authority maintained schools, this will be the governing body; and in a single academy trust (SAT) or multi-academy trust (MAT), it will be the board of trustees.

‘Executive leaders’ means those held to account by the board for the performance of the organisation. This may be the chief executive officer (CEO), executive headteacher, headteacher or principal, as well as other senior employees or staff, depending on the structure of the organisation.

‘Member(s)’ refers to those who are the founder members and/or subsequent members of the academy trust.

‘Local governing body’ (LGB) means a committee of a multi-academy trust board that is established as such under the trust’s articles of association.

Terminology specific to academies with a religious character

Throughout this document we will use the terminology outlined above. However, academies with a religious character use some additional and alternative terminology as outlined below.

Academy trustee (as charity trustees)

In an academy trust with a religious character, academy trustees are referred to as ‘directors’ or ‘company directors’. All academy trustees (in an academy trust without a religious character) and ‘directors’ (in academy trusts with a religious character) are both charity trustees and company directors.

Trustees

In church academies, the term ‘trustees’ is reserved for those on the board of the separate trust that owns the land. For academy trusts with a religious character the trustees are the:

• Church of England
• Catholic Church
• other religious body

What is an external review of governance?

An external review of governance (ERG) examines the effectiveness of the board based on the 6 features of effective governance, which are set out in the Governance handbook.

These are:

• strategic leadership
• accountability
• people
• structures
• compliance
• evaluation

An ERG is conducted by an experienced governance expert who is external to, and independent of, the board and the executive leaders.

The review will examine the governance structure, operations and performance across the board, working closely with the board, executive leaders and the governance professional (previously referred to as ‘clerks’), to improve the board’s performance. Governance operations could include a range of contributors, including the governance professional or equivalent, the school business manager, legal and HR support and others.

A review should:

• consider the process and impact of decision making
• consider the impact of the governance support provided to the board
• test compliance with mandatory requirements

Ultimately a review should enable the board to provide reassurance to stakeholders and others that it takes its responsibilities seriously and is endeavouring to carry them out effectively. In academy trusts, proving this assurance to members is essential for the members to carry out their role. A review provides a board with:

• an independent, objective view of its strengths and areas for improvement
• clear recommendations for future improvement
• an opportunity for the board to review the strategic direction of the organisation and to evaluate the effectiveness of its processes and systems

Why are ERGs important?

The Governance handbook states:

An objective independent external review of the effectiveness of the board can be a more powerful diagnostic tool than a self-evaluation. This is particularly important before the board undertakes any significant change – such as conversion to academy status or before a multi-academy trust (MAT) grows significantly.

The Academy trust handbook states:

The Department’s strong preference is that external reviews of governance are also conducted routinely as part of a wider programme of self-assessment and improvement.

The charity governance code recommends that large charities such as academy trusts undertake external evaluations every 3 years. Board evaluations have become increasingly common in other sectors and, particularly in the corporate sector, have been recognised as fundamental to good governance arrangements for many years.

While there is no prescribed timescale for these external reviews, it is good practice for boards to undertake reviews at regular intervals. Even when an external review is conducted regularly, an annual self-review between ERGs is good practice.

Although there is no specific requirement for maintained school governing bodies, it is advisable to undertake a review as it can help improve and develop governance, identifying priorities for improvement and providing support for the steps the board needs to undertake.

The competency framework for governance is applicable to all boards. The principles and personal attributes that individuals bring to the board are as important as their skills and knowledge. These qualities enable governors and academy trustees to use their skills and knowledge to function well as part of a team and make an active contribution to effective governance. ERGs help your board to:

• be more skilled, focused and effective
• be clear in its vision and how it can achieve this
• be confident that it has a clear delineation of roles and responsibilities
• have the appropriate skills, and a sufficiency of committed governors or academy trustees to meet its needs
• hold leaders to account for improving outcomes for all pupils, particularly those who are disadvantaged
• have appropriate oversight of finances and ensuring value for money
• assure compliance
• continuously improve

ERGs of multi academy trusts (MATs)

These reviews should explore governance across the whole trust, how the board of trusts ensures there is effective governance and governance support across the academy trust – not just at board level, but how the board works with the central team and any committees including LGBs, how they ensure legal compliance and an effective structure for governance that avoids duplication or omission of duties and how they how they promote a strategic vision which is shared and understood by all members of the organisation. The scheme of delegation is an important document. An ERG should not be conducted into the activity of an LGB as a separate entity.

Prepare for a review

Before commissioning an ERG, it may be useful for the board and senior leaders to reflect on their position, to understand what it believes is working well, where improvement would be beneficial, and to address any perceived areas of concern.

The Chartered Governance Institute (CGI)’s review of the effectiveness of independent board evaluation in the UK listed sector, carried out for the Department for Business, Energy and Industrial Strategy, may be helpful background reading, particularly for chairs.

Resources to support self-review:

• Twenty questions for governing board self-review – NGA
• Understanding your data: a guide for school governors and academy trustees – GOV.UK
• NGA skills audit and skills dashboard
• School resource management self-assessment checklist – GOV.UK
• View my financial insights tool – GOV.UK
• School resource management: top 10 planning checks for governors – GOV.UK
• The competency framework for governance – GOV.UK
• Board evaluation in the charity sector – CGI
• The board evaluation process – CGI
• Specimen charity board evaluation questions – CGI
• Specimen charity board observation sheets for charities – CGI

Resources to support self- review specifically for academy trusts:

• The MAT assurance framework – GOV.UK
• Twenty-one questions for MAT board self-review – NGA
• CST’s assurance framework for trust governance
• Academies financial management and governance self-assessment – GOV.UK
• MAT governance board effectiveness – CGI

The outcome of self-reviews and ERGs should be shared with trust members.

How to commission a review

1. secure agreement with the board and senior leaders to commission an ERG
2. identify an appropriate reviewer
3. agree the areas for consideration in your review
4. agree costs and timescales for your review
5. schedule your review
6. choose and complete the resources required to prepare for your ERG
7. discuss the findings and recommendations of the review with the board and the reviewer
8. agree and implement an action plan
9. evaluate and assess impact, and if appropriate, schedule a follow up

Getting the most from a review

During a review it is important to:

• provide the reviewer with any documents and information requested
• be open and receptive to challenge and constructive criticism
• actively seek and consider new ways of operating
• be reflective and honest during the process

This will allow the reviewer to fully understand the context and organisational arrangements and make insightful, evidence-based recommendations. Boards and leaders should ensure a fair and accurate representation of their organisation, in order to achieve a meaningful outcome that will effectively support development.

Find a reviewer

Boards should ensure the person conducting the review has the appropriate background, skills and experience to fully understand the individual characteristics of your organisation and the governance structure in which it operates. You can use an organisation to commission a review, who may be able to help identify a good match, and may offer additional quality assurance, to add value to your review. Be aware that the ideal reviewer for an individual organisation at a particular time will not, necessarily, be the ideal reviewer for a different organisation or at a different time.

You can find a reviewer by contacting:

• education service providers
• sector membership organisations
• independent governance consultants
• relevant professional bodies
• professional services providers (such as lawyers or auditors) – but be careful to avoid real or perceived conflicts of interest

Designated national leaders of governance (NLGs) can undertake external reviews of governance.

Things to consider when commissioning a reviewer

When commissioning a reviewer, you might want to identify:

• similar organisations, based on geographic location, pupil demographics, educational performance, to request endorsements or references
• a reviewer that has experience of delivering excellent governance at an organisation like yours, so that they have a working understanding of an organisation with similar demographics and demands as your own
• a reviewer that belongs to a governance membership organisation or professional body
• the reviewer’s previous experience of undertaking ERGs – they should provide evidence of the improvement outcomes that their previous reviews have resulted in, and evidence of the expertise, experience, and capacity necessary for each review they undertake
• for reviews of MAT governance, a reviewer that has a sound understanding of the academy trust sector, and a breadth of experience of academy trust governance – it might be helpful if they have experience of governing or working as a governance professional in an academy trust, and understand academy trust structures
• a reviewer that has specific technical knowledge to understand the needs of your organisation – for example, an organisation with financial governance concerns may require a reviewer with a more detailed understanding of finance, or more than one reviewer might be appropriate where there are multiple complex issues; technical knowledge is also important where there are particular characteristics, for example religious characteristics
• how the reviewer keeps their skills and knowledge up to date: when did they last undertake training or development, and are they currently personally involved in school, academy or academy trust governance?
• how the reviewer quality assures their reviews – are they part of a wider organisation or network that can deliver an element of quality assurance?
• if the reviewer(s) have any previous links with the board or executive, and if so in what capacity – reviews must be impartial and independent and the reviewer must remain fully objective and able to provide a robust and challenging evaluation

Reviewers should demonstrate how effectively they can:

• analyse governance and governance support
• identify improvements and communicate this effectively
• assimilate school performance data, budgets and finance and evaluate how school improvement priorities are being monitored at board level
• diagnose governance issues

What to expect from your external review

A review should be personalised to your organisation, detail well evidenced findings and provide recommendations for improvement where necessary. Some common characteristics of the most effective reviews include:

A clear scoping exercise prior to the review

Before a review is undertaken, the board and the reviewer should be very clear about aims and expectations. This includes establishing the areas of concern or improvement, anticipated outputs, and understanding what can and cannot be delivered within the boundaries of the review, and how the review will be undertaken.

The organisation and reviewer should agree terms of reference before the review commences. These should specify the objectives and scope of the review, and the process to be followed. The organisation should not subsequently seek to amend the terms of reference without the agreement of the reviewer. Timeframes and costs should also be clearly set out, including payment of any expenses, and contingency for unplanned costs or time.

A review will usually comprise several stages, including remote testing of compliance with requirements for published information and other supplied information which should include examination of the board’s governance documents and any supporting information, meeting agendas, papers and minutes, discussions with trustees, governors, executive leaders, governance professional and the board, and report writing. These will vary in duration depending on the complexity of the board structure and the depth of review required.

Evidence of board interactions

Reviews can assess the effectiveness of board interactions though a number of channels. By allowing a reviewer to observe board and committee meetings, or to undertake a facilitated discussion or self-review, a better understanding can be developed of the board dynamic, working relationships and the levels of understanding and challenge across the members of the board. However, infrequency of board meetings or the timing of the review may make it difficult to observe a board meeting, so this will need to factored in when planning the timing of the review.

Good quality minutes can provide some evidence of the nature of discussions and themes explored, although it can be difficult to understand the depth and effectiveness of challenge from minutes alone.

Interviews with governors or academy trustees, headteachers or chief executive officers (CEOs), chief financial officers (CFOs), governance professionals, local or board chairs, members and so on, to gather evidence on what they understand about good and effective governance and how they are discharging their duties can also be useful.

Testing compliance

An ERG is a good opportunity to undertake a thorough test of an organisation’s compliance with mandatory and legislative obligations, as set out in the Governance handbook and, also for academy trusts, in the Academy trust handbook, and the academy trust’s articles of association, and to check the appropriateness of terms of reference, schemes of delegation and so on.

Understanding the effectiveness of governance support

It is important to consider reviewing the governance support, advice and guidance provided to the board, and how that support helps the board to be effective. This could come from a range of contributors including:

• the governance professional or equivalent
• the CFO or school business manager, or in academy trusts the auditors
• HR guidance and support
• legal guidance and support
• school improvement advisors or directors of education
• school resource management advisers
• external support including estate management, health and safety experts, external auditors, internal auditors
• dioceses or other appropriate religious bodies for schools designated as having a religious character

The role of the governance professional is different to a minute taker – the role must provide advice and guidance to the board and its committees.

All academy trusts must have an independent governance professional to support the board and its committees, who must not be an academy trustee, principal or chief executive of the academy trust. All maintained schools must have a clerk, who is the board’s governance professional. The clerk must not be a governor or the headteacher.

When reviewing the effectiveness of your governance support, you may want to ask the reviewer to consider:

• whether the current level of administrative and advisory support the governance professional provides is appropriate for the size of the organisation and any future growth -are there areas of the role that can be expanded and developed to provide more support to the board and its committees?
• whether the person undertaking the role has a good understanding of the board’s legal duties and responsibilities: what is the relationship between the chair and governance professional and what is the board’s understanding of the role of governance support and its contribution to the board?
• whether there is a reasonable degree of separation between the governance professional, and the board and senior leadership in order to ensure independence – for example, there could be a conflict of interest if the governance professional is a paid employee, e.g. the PA to the CEO or headteacher
• the skills of any potential governance professional and whether they are able to provide appropriate support to the board as set out in the clerking competency framework
• how the chair works with the governance professional – could this relationship be improved to assist the board in meeting their 3 core functions, as set out in the Governance handbook?
• how the governance professional and the CEO or headteacher work together – depending on the exact role of the former and their reporting lines, there can be some unhelpful tensions around this relationship
• if the board is getting value for money from its governance support package

Understanding the impact of challenge and scrutiny

Board members who blend challenge and support to hold senior leaders to account will improve standards. It will be useful for a review to consider the appropriateness and effectiveness of challenge and scrutiny within the organisation, and how systems of internal control contribute to strong governance, risk management and control arrangements.

Understanding the impact of local governance

In organisations with layers of devolved governance, it is very important to include in the review some consideration of local governance arrangements, including academy local governing bodies (LGBs) or maintained schools governed collectively as a federation. Local tier governance can have a significant impact on the effectiveness of a school, and it would be helpful to review the relationship between the local tier and the board, and how effective communication and direction are. This will involve a review of schemes of delegation and how they relate to the annual cycle of work between the board and the local tier.

This aspect of the review could be done though surveys, interviews or other feedback streams, and could be useful to understand how well connected the layers of governance are. Staff or community surveys may also be useful to understand the multiple layers of interactions.

Understanding the role of the members in an academy trust

Members play a limited but crucial role in safeguarding academy trust governance. While they must ensure they do not stray into undertaking the academy trustees’ role, they should assure themselves that the governance of the academy trust is effective, that academy trustees are acting in accordance with the academy trust’s charitable object(s) and that they, the members, use their powers to step in if governance is failing. The review of an academy trust board should consider how effectively trust members exercise their responsibilities, and how they are assured that the academy trust board is exercising effective governance. The review may need to include interviews with some members to talk through their role and how they feel they contribute effectively. It may also be useful to test the degree of involvement or overlap with the board, and assure the academy trust of an appropriate degree of separation.

Further advice on the role of members is available in the Academy trust handbook and Academy trust governance: structures and roles.

Relationship with stakeholders

For some organisations it will be highly valuable to assess the board’s interactions with a range of key stakeholders. The Chartered Governance Institute paper on the stakeholder voice in board decision making may be helpful with this issue.

An action plan

Although a report is helpful to summarise the findings of a review, an action plan developed with the board, executive leaders and the governance professional provides clarity on not only what needs to be delivered, but how it will be delivered. Appropriate input from the reviewer aids a clear understanding of the rationale for the recommended actions, but joint working promotes ownership for its implementation as the board will be responsible for implementing the plan. Like all action plans, it should be timebound, specific and identify clear measures of success, and should cover how gaps in knowledge and skill will be addressed. Boards must also consider their capacity to implement change and whether further support will be needed to help ensure the recommendations from the review are implemented in a timely and effective way.

Progress and follow-up review

It may be helpful to invite the reviewer to return after several months to help assess the boards progress against an action plan. It is an opportunity to review how well improvements are being implemented, respond to any changes, and seek further advice. If you wish to include a follow up visit, this will need to be considered in the cost of the review. Reviewers can offer ongoing support to a board to support the effective delivery of action plans. However, it is important to ensure the reviewer’s independence is maintained, and the reviewer does not become too close to the board or any of its members – this role should be that of a ‘critical friend’ rather than of a mentor.Published 27 March 2015
Last updated 21 December 2021 – hide all updates

1. 21 December 2021Updated and consolidated the DfE’s guidance on external reviews of governance into one detailed guide.
2. 13 October 2016ERG toolkit updated.
3. 27 March 2015First published.