Next generation questions for schools

John Mero discusses some of the ingredients required in the governance mix so that our schools can produce inspiring results and confident lifelong learners.

School governance (including colleges, primary and early years) is something we are likely to hear more about and rightly so, as education matters to everyone. 

It is both the engine of personal development for individual students and our national competitiveness in a global economy.

Australia has an enormous advantage in the diversity of its independent schools, which are not immune from the requirements of good governance.

For some, however, the meaning of governance is still developing.

School governance requires the right blend of ingredients as the product – for example, “developing confident students capable of making a valuable contribution to a better world” – is not as simple as manufacturing a widget.

The mix of ingredients includes governance that adds value, a business model that delivers resources for renewal and an educational platform for individual students to shape their lives with confidence from an early age.

Foremost among the barriers to good governance is a risk of complacency, especially assuming the school brand will self-perpetuate and therefore, “the school will always be in demand”.

The school council must ensure the school has the ingredients needed for continuous performance and renewal and does not become lazy or internalised.

To be successful anywhere, directors need to know the business they govern.

In schools, being involved in governance means taking a leadership position in the school community.

The power of a community of people who support a school can be inspirational and many great educational institutions have come from such communities. However, school communities can also be parochial to such an extent that the members feel they own the bricks and mortar.

As governors are not involved in the daily affairs of the school, they may be removed from the informal opinion leaders in the community.

In schools, it is always worth asking: How will this decision be received? While the ultimate decision may not change, the school’s implementation of change can be intense and the principal’s skill at selling decisions can vary.

Schools with advanced governance capabilities are able to holistically support the effort to get education right. But other schools are likely to be distracted by things like the interface between the council and the principal, which may not sound like much, but it is.

Schools are finely-tuned instruments and steady, insightful governance is required to get the right balance.

Governance in schools is not for unskilled directors, no matter how well meaning or connected to the community they are.

The risks and consequences are now far too serious. However, unskilled “community members” are still on school councils.

Some think they are there to represent parents. And, many do not understand their duties, as if schools are somehow removed from legal and common-law requirements in governance.

This is especially apparent if the parent councillor is highly opinionated, but has limited skills to govern what are often large and complex entities.

A migration to skills-based councils is now a requirement for both the survival and long-term success of schools.

However, the challenge is not to abandon the sense of a school’s history, its culture and its aspirations.

Education is one of those areas where content-free governance is not easy to translate into success.

The business side of any school requires attention. For example, if the breakeven point has not been reached with enrolments at 90 per cent of total capacity, then there is little room to reach a sustainable surplus and existing operational costs will be too high for the revenue base.

Unaddressed, this will erode the stability of the school, especially as 90 per cent of capacity may be difficult to sustain in competitive markets.

In the past, many parents were loyal customers. Today, however, enough are inclined to shop for the best option to be a threat to business viability.

In addition, schools are also businesses where “incidents” can affect enrolments, at times with startling speed.

Understanding business basics is therefore essential – for example, what is our shock- absorbing capacity?    

Closely related is the over-reliance on headline numbers where directors accept, without scrutiny, statements like “we are in a strong financial position”.

Financial naivety has no place in schools, many of which have served their communities for over a hundred years and aspire to continue doing so.

Directors only focusing on apparently positive headlines may be unaware of, for example, the unrealisation of many assets or policy breaches for how assets are valued up or liabilities are written down.

This is important because independent schools have a duty of care to the efforts of those who contributed to building the school.

Great results in any field of public endeavour do not just happen. People have to make them happen, often over many decades.

The people who left their mark on schools are reliant on today’s directors, perhaps long after their passing, to keep faith with their contribution.

The principle of in-perpetuity is critical and does not always get the focus it deserves, including an underdeveloped focus on long-term performance.

Without a sound understanding of the business there is no guarantee of perpetuity.

Consider the following example: The working capital ratio is negative, the school is trading in deficit at nearly full student capacity and buildings have been completed with no plan to develop the revenue needed to cover their costs.

Under these conditions, the financial position can erode and/or debt will increase. Soon, the ivy hanging on the wrought iron fence may not look as secure as it once did, especially because there is little inclination from the religious groups who started many independent schools to rescue them if they hit a financial wall.

Legacy, however, must be an enabler for the future and not impede continuous development.

For example, how does our legacy contribute to preparing students for tomorrow’s world?

The directors need to know what should remain the same – for example, an endearing mission and values – while they select strategies to meet tomorrow’s personal and educational needs of students.

The need for clarity on these matters cannot be underestimated and yet it can be lost in the “busy-ness” of school operations.

Every school council should regularly ask: What are the priorities for the school to remain strong?

This may mean delaying plans for facilities or expansion or, at a minimum, ensuring major projects are based on a sound education or business case and not just on the passions of the most articulate in the school community.

This may not matter if facilities or expansion are affordable over the long term, given changing business conditions, but it might matter a great deal and it is the job of the director to know which it is.

There also remains debate about whether the school should generate profit – for example, “all spare money should go into education”.

Often this is based on a misunderstanding of whether not-for-profits can generate a profit, and of course they can.

Without an adequate profit, risks can only go up and opportunity-taking suffers.

If business principles are being used to advance education, then a full set is needed, including what net return will fund requirements into the future.

Input from the school’s senior educational leaders may be lacking in this area as few senior staff, other than those in corporate positions, are likely to understand the business model or finances of the school.

At times, this feels like there is a lone voice at the executive which is not informed and that constructive challenging is low.

The split between education and corporate can result in a lack of integration.

Add to that a high tendency in multi-campus schools for site principals to be competitive and the executive’s focus across the total school can be weak.    

Directors themselves must be able to get the basics right, like avoiding conflict and material interest concerns.

For example, directors who see themselves as parents and not governors and oppose fee increases without doing the work to understand the decision, are not directing in the interest of the whole organisation.

In these instances, governance committees are required that have the wherewithal to ensure all who sit at the governance table understand their obligations, without “tossing the baby out with the bath water”.

One of the most challenging aspects to school governance requires directors to be willing and able to understand the whole school, including its core activity of student development and education.

While directors should not needlessly interfere, they must be able to test operations.

At times, the highly credentialed and often robust personality of the principal can lead to assumptions that education is well looked after.

However, it is not enough to “leave education to the principal” because a “hands-off” approach adds no value.

Not knowing what questions to ask, is, however, a significant issue.

Critical to the success of every council, therefore, is finding the next generation of questions to advance the development and educational experience of students in a rapidly changing world, for example:

• What evidence is there that our school mission and values are being implemented?
• Is our curriculum emphasising academic results or considering the whole person?
• How can we improve the overall experience of students and teachers?
• Are our teachers good learners?
• Are teaching technologies keeping pace?
• How are we strengthening our future orientation? 
• How are we providing an opportunity for students to explore and develop their personal values?
• How are we reducing the likelihood of bullying and victim development?
• However, if you are in doubt as to what to ask, it is essential to engage the principal, senior staff and other stakeholders in defining what questions need to
• be asked to guide the next generation of the school’s development.