The revised CUC Code of Governance departs fundamentally from the 2020 Code's homogeneous, aspirational approach, under which there was no formal distinction between mandatory requirements and matters of judgement. The revised Code is 'principles-based' and operates 'on an apply or explain basis', split into 'principles and provisions'. 

How did the 2020 Code work?

Under the 2020 Code, the language throughout is broadly aspirational and consistent in register. There is no formal distinction between mandatory requirements and matters of judgement, and compliance is assessed on a relatively homogeneous 'comply-or-explain' basis.

What is the difference between 'must' and 'should' provisions?

Principles set out the overarching goals of the Code, whilst provisions set out the individual actions institutions take to deliver these goals. Provisions expressed as 'must' set out minimum expectations, required to claim compliance with the revised Code. 

Provisions expressed as 'should' require a Board to exercise judgement, having regard to an institution's context and circumstances. Where a Board chooses to take a different approach to 'should' provisions, institutions must publish a 'compelling rationale' for their approach so that their stakeholders can understand how their approach complies with the intent of the relevant Principle of the Code.

What does 'apply or explain' mean in practice?

The revised Code specifies that explanations "should be clear, specific, concise and informative, enabling stakeholders to understand how governance arrangements operate", and notes that further guidance on this topic will be issued by the CUC alongside the revised Code. 

The revised Code also encourages boards to:

The governance and management distinction

The revised Code also makes explicit the governance/management distinction. The Foundational Principle states:

Whilst this principle is implicit in the 2020 Code, its formal articulation as a foundational statement is noteworthy.

How should providers map their governance against the two-tier framework?

In practical terms, every existing governance policy, procedure and committee structure will need to be mapped against this two-tier framework. Where a 'must' provision is not currently met, urgent corrective action will be required. Where a 'should' provision is departed from, a formal, published rationale must be prepared. 

That published rationale will need to meet the quality standard set out in the revised Code: it must be clear, specific, concise and informative. Institutions should approach the revised Code as a framework for continuous improvement, not merely a compliance exercise. 

Institutional leadership and purpose: A new dedicated section

The revised Code introduces a new Section 1 – Institutional Leadership and Purpose – which has no direct equivalent in the 2020 Code. This section addresses several themes that were previously either implicit or scattered across the 2020 Code's broader provisions.

The Board must clearly articulate and publish the institution's purpose and values in accordance with its governing documents, and must ensure that major decisions are aligned with such purpose and values and support the delivery of the institution's strategy on a sustainable basis.

The Board must appoint a fit and proper Head of Institution, University Secretary and Chair through a rigorous, transparent and merit-based process. The Board must also satisfy itself that the institution has appointed an effective executive leadership team with the capacity and capability to deliver the agreed strategy and culture that development plans are in place and that performance reviews are undertaken for them.

The Board should ensure that robust succession planning and operational resilience is in place for the Head of Institution and key executive roles. It should also be assured that the institution has a clear understanding of its stakeholders and has undertaken sufficient stakeholder engagement to ensure decision-making is underpinned by a robust understanding of stakeholder perspectives, including the characteristics and academic need of the institution's students.

What do the new leadership and purpose provisions require in practice?

The creation of a standalone section on institutional leadership formalises and elevates expectations that were previously addressed less directly. The requirements around succession planning, executive leadership team assurance, and stakeholder engagement are new in their specificity. 

Boards should review whether they have adequate processes in place for executive succession planning and whether their stakeholder engagement mechanisms are sufficiently structured to meet these expectations.