Blurred lines

Increasing numbers of business leaders are experiencing problems because it is unclear who is responsible for what in their schools, says Richard Bird.

Many independent schools and colleges make a clear division of responsibility between the strategic and detailed management of the finances and resources of the organisation and the management of education. The bursar handles finance and the premises and grounds and reports directly to governors. If the head wants to spend money, s/he either approaches the governors or the bursar and the bursar gives approval or makes a report to governors on the viability of the request.

This is a diagrammatic way of putting it and, in practice of course, people work closely together in a successful organisation. What this kind of framework does do, however, is to make responsibilities quite clear. If the school goes into troubled financial waters, the bursar is  red. If the school results crash, the head’s head rolls.

In state-funded schools of various kinds things are often less clear. The business leader may report through the head or report to a governors’ finance committee or to a single finance governor. Some business leaders control the situation through sheer force of character or because the head takes the view that s/he concentrates on the core business of the school and leaves ‘that sort of thing’ to others. 

But what we are seeing increasingly is the difficulty that business leaders are beginning to get into because lines of responsibility are unclear.

Breach of duty

The typical scenario is that the head or governors spend money they should not spend on something that is outside their powers or in breach of a statutory duty. At some point a regulatory authority intervenes. The governors then point out that they are not experts on the law and have relied on the professional staff of the school to make sure that they operated within the law. They may or may not be replaced.

The head, of course, must go. His/her responsibilities have not been defined so s/he is, by default, chief accounting officer.

The fact that the head has seen the role as essentially the leadership of teaching and learning and has “left the rest to the business leader” is no defence. Heads tend to wake up to this too late. But then the regulatory authority or the employer goes after the business leader.

The business leader is astonished at the unfairness. After all, s/he only signed the order on the instructions of the head. At appointment nothing was said about whom s/he was to report to and, once in post, it was made clear that it was just assumed that if the head said “do this” it would be the right thing to do and it should be done. It was a matter for governors to make sure that the head only gave instructions that were lawful.

It would have been disloyal to the head to have gone behind his/her back to the governors. Yes, to have done so would have constituted protected whistleblowing, but surely whistleblowing is a voluntary thing.

HR, however, will take another view. This will be based on what lawyers call the duty of fidelity. It is an implicit part of any employment contract and does not need to be stated explicitly in the written contract. It means that an employee should act in the interests of the employer.

For a business leader, it means ensuring that the governing body, or whoever else is the employer, is not put in the position of acting unlawfully, either by design or error. In those circumstances, dismissal for ‘some other substantial reason’ is usually fair in law.

But it isn’t in any other sense. If the employer has allowed an unclear situation to develop, it is hardly fair, in a non-legal sense, to blame someone for acting by the best light they had.

Unfair to all?

The unfairness works both ways. As suggested, a head can entrust the financial affairs of the school to a business leader. But in the absence of an explicit statement to that effect, the head can end up taking the blame when blissfully unaware that the curriculum and staffing model that the business leader is expected to finance is completely unsustainable.

Schools need to be explicit. In the same way that governors should adopt standing orders to ensure that their operations are clear and fair, schools should ensure that the lines of reporting are absolutely unequivocal and that it is written into the contract of a business leader that if there are concerns about financial controls, actions or directions, then there should be a duty to report them to a named governor or committee. And people should ask the question if it isn’t explicit.

As in so many other areas where practices have ‘just grown’, it is comfortable to operate without rules and procedures. But when issues of legal limits to powers and the proper use of public money within the framework set down by Parliament are in play then it is as well to make sure that everyone knows exactly what they can do and exactly what they should do to fulfil their duty of  fidelity and their duty as public servants.

Richard Bird is ASCL Legal Specialist.

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