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Benefits of a Remuneration Code – John Rushforth

11^th January 2022

There is a quote often attributed to Benjamin Franklin, “In this world, nothing can be said to be certain, except death and taxes.” If he were alive today, he would probably add………. and that there will continue to be random articles in the Press saying how outrageous the salaries paid to Vice Chancellors are.

In 2017 these stories achieved a new intensity and in part led to the development of the CUC Higher Education Senior Staff Remuneration Code, published in June 2018.  Despite the publication of the Code, however, the issues have not gone away.   Recent stories have accused senior staff of receiving “eye-watering salaries” and “inflation busting” pay increases which are far in excess of other staff at their university and are a “source of shame for the university sector”. These accusations were mitigated to an extent when several vice-chancellors opted for voluntary pay reductions as a response to the pandemic, but the dominant narrative remains one of unreasonable levels of remuneration.

Senior pay at universities is a complex issue and is not helped by a general lack of awareness, outside of the sector, of the complexity and scale of running a modern university and the reality of the competitive global marketplace in which universities must recruit and retain the best talent.

Although it was well received at the time, CUC recognises that the world has moved on, and that it was important to honour the commitment given when we published the Code that we would review it after a full year of operation to see if it were fit for purpose.

We took the view that the best way to test if the Code was working was to commission a fully independent review. With this in mind, we asked Advance HE to carry out such a review and today we are publishing it in full on our website (link).

We think it is a robust and encouraging report. We are pleased that overall:

• There is a high degree of awareness of the Code, especially among CUCs members.
• Survey recipients indicated that 97% use it to guide their remuneration committee activity.
• Most respondents and interviewees consider that procedure and practice at their institution has changed for the better in recent years.
• There was a very high degree of agreement in the survey that the Elements of the Code are applied at their institution:
• 95% of respondents agreed “senior pay at my institution is fair, appropriate and justifiable”.
• 98% agreed that “individuals are not involved in deciding their own remuneration”.

They concluded that the Remuneration Code is being adopted by its intended audience and that HEIs are making efforts to strengthen their governance around senior staff pay in the interests of transparency, accountability and public confidence.

The one disappointment in the review was that although 73% of those who use the Code stated they published a “readily accessible annual statement, as modelled in the Code”, the quality of statements Advance HE sampled was highly variable. Transparency is a vital part of the Code and we need to redouble our efforts to demonstrate the basis of the decisions we make. We hope therefore that HE leaders will review their own website and assess for themselves whether their annual statement is easy to find and easy to understand, and for our part will support institutions with examples of good practice.

Advance HE also helpfully pointed out areas where there could be improvement in four key areas: strategic, regulatory, transparency, and operational.

We accept those recommendations and will be working with partners and stakeholders to implement them over the coming months. It is important that we all work to improve public understanding of what we do and the contribution we make, even if we know that the dynamic of public discourse is such that all we are unlikely to transform the negative coverage of senior pay into a positive description of the value of Higher Education and its contribution to societal and economic growth.