Annual Report and Accounts 11/12 - Glasgow School of Art

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Corporate Governance StatementThe School is committed to employing best practice in all aspects of corporate governance. This summary describes the manner in whichthe School has applied the principles set out in the revised Combined Code on Corporate Governance issued by the Financial ReportingCouncil in July 2003. The Board of Governors is satisfied that the School has complied throughout the period with the provisions of theCode so far as they apply to the Higher Education sector. The purpose of the summary is to help the reader of the financial statementsunderstand how these principles have been applied.The School’s Board of Governors is responsible for the School’s system of internal control and for reviewing its effectiveness. Such asystem is designed to manage, rather than eliminate, risk of failure to achieve business objectives and can only provide reasonable and notabsolute assurance against material misstatement or loss. The process for reviewing the effectiveness of the system of internal control isthrough management reports to the various committees and, in particular, the Audit Committee.The Board, through its Audit Committee, reviews and monitors its Risk Management Policy, the Risk Register and its Business ContinuityPlan and complies with the control guidance published by the Turnbull Committee for identifying, evaluating and managing risks.The Board of Governors is of the view that there is an ongoing process for identifying, evaluating and managing the School’s significant risksthat has been in place for the full year and for approval of the annual report and accounts. This process is regularly reviewed by the Board ofGovernors and accords with the internal control guidance for delivery on the Combined Code as amended by the British UniversitiesFinance Directors Group.The Board of Governors comprises lay and academic persons appointed under the Statutes of the School, the majority of whom are nonexecutiveand independent (see page 2). Lay Governors are not remunerated. The Clerk to the Board maintains a Register of Interests ofmembers of the Board. All governors are able to take independent professional advice in furtherance of their duties at the School’s expenseand have access to the Company Secretary of the School, who is responsible for ensuring that all applicable procedures and regulations arecomplied with. The appointment, evaluation and removal of the Company Secretary are matters for the Board as a whole.The roles of Chairman and Vice-Chairs of the Board are separated from the role of the School’s chief executive, the Director. The mattersspecially reserved to the Board for decision are set out in the Statutes of the School, by custom and under the Financial Memorandum withthe Scottish Funding Council. The Board holds to itself the responsibilities for the ongoing strategic direction of the School, approval ofmajor developments and receipt of regular reports from Executive Officers on the day-to-day operations of its business. The Board meets atleast five times a year and has eight committees, Business, Audit, Investment, Human Resources, Estates, Museums and Archives,Remuneration and Nominations. All of these Committees are formally constituted with terms of reference and comprise mainly lay membersof the Board, one of whom is the chair. Members of each of the Committees are identified on pages 1 and 2.The Business Committee, inter alia, recommends to the Board the School’s annual revenue and capital budgets and monitors performancein relation to the approved budgets, together with the Audit Committee. It also recommends to the Board the Annual Accounts for approval.The Business Committee is responsible for the preparation of policy for the adequate provision of space to meet the requirements of thestrategic plan and the monitoring of the effective management of the buildings of the School.The School has an internal audit service, outsourced to a professional firm of auditors, which operates in accordance with the requirementsof the Scottish Funding Council’s Financial Memorandum. The work of the internal audit service is informed by an analysis of the risks towhich the School is exposed, and annual audit plans are based on this analysis. The analysis of risks and the internal audit plans areendorsed by the Board on the recommendation of the Audit Committee. Annually the Internal Auditors provide the governing body with areport on internal audit activity in the School. The report includes their independent opinion on the adequacy and effectiveness of theSchool’s system of risk management, controls and governance processes.The Audit Committee is responsible for meeting with the External Auditors and Internal Auditors of the School and reviewing their findings.They consider detailed reports together with recommendations for the improvement of the School’s systems of internal control andmanagement’s response and implementation plans. They also receive and consider reports from the Scottish Funding Council as theyaffect the School’s business and monitor adherence with the regulatory requirements. The senior management team receive reports settingout key performance and risk indicators and consider possible control issues brought to their attention by early warning mechanisms whichare embedded within the operational units and are reinforced by risk awareness training. The senior management team and the AuditCommittee receive regular reports from internal audit which include any recommendations for improvement. The Audit Committee’s role inthis area is confined to a high level review of the arrangements for internal financial control.The Audit Committee’s agenda includes regular consideration of risk and control and will receive reports thereon from the seniormanagement team. The emphasis is on obtaining the relevant degree of assurance and not merely reporting by exception. The AuditCommittee reports annually to the Board on risk management. The Committee met on four occasions during the year.10
Corporate Governance Statement – continuedThe Investment Committee is responsible for recommending investment strategy to the Board and for monitoring investment performance.The Human Resources Committee is responsible for the preparation of policy relating to the employment of staff and the monitoring of theeffective management of these affairs and recommending policy to the Board. The School is responsible for ensuring that appropriatetraining is provided as required. The Committee met on five occasions during the year.The Estates Committee is responsible for overseeing the development and implementation of the School’s Estate Strategy and met sixtimes during the year.The Museums and Archives Committee considers and makes recommendations on all matters relating to the Museum Collection belongingto the School. The Committee met on four occasions during the year.The Remuneration Committee determines the remuneration of the most senior staff, including the Director. Details of remuneration for theyear ended 31 July 2012 are set out in note 7. The Committee met once during the year.The Nominations Committee seeks out and recommends new independent lay governors for appointment to the Board. Members areappointed for a term of office not exceeding three years at the conclusion of which they may seek re-election for a further two terms.Guide to Governing BodiesThe Board confirms that the School complies with the recommendations contained within the Guide for Members of Higher EducationGoverning Bodies in the UK issued by the Committee of University Chairmen in 2004.Quality assuranceFormal and informal mechanisms enable the Board to ensure that its strategic responsibilities for quality are discharged effectively; that theSchool continues to maintain a high quality learning experience for its students; and that both students and external agencies are satisfiedwith the quality of education provided.These mechanisms, which exercise delegated powers of the Board, include the responsibilities of the Director, formal reports to theAcademic Council, an Annual Report to the Senate of the University of Glasgow, and the annual monitoring of Key Performance Indicators.All of which are reported to the Board on a regular basis.They are supplemented by active student and staff participation and engagement. A clear example of such additional School-wide activitiesare the briefings and discussions in preparation for the successful 2010 QAA Enhancement Led Institutional Review.Senior ManagementThis comprises the Director, Deputy Director and Director of Finance and Resources. They are responsible to the Board for the School’sday-to-day management, policy and for the development and execution of the School’s Strategic Plan. In respect of its strategic directionand responsibilities, the Board receives recommendations and advice from the Director.The Director is the School’s “Accountable Officer” and is responsible for the proper use of funds received from the SFC. She is the School’s“Designated Officer” and has the responsibility for reviewing the effectiveness of the system of internal control. The Director chairs theDirectorate, the Executive Group and the Academic Council. The Director represents the School on Universities Scotland and other externalbodies. Academic policy is devolved to the Director by the Board, as advised by Academic Council.The Deputy Director has responsibility for overseeing the School’s academic development, quality assurance procedures and research.She is chair of the Learning & Teaching and Research Committees and deputises for the Director in her absence.The Director of Finance and Resources is responsible for financial, estates, IT and human resource matters in support of the School’sacademic purposes, acts as Secretary to the Board and Company and also has responsibility for reviewing the effectiveness of the systemof internal control.Going ConcernThe Board considers that the School has adequate resources to continue in operational existence for the foreseeable future. For thisreason it continues to adopt the going concern basis in preparing the financial statements.11
Page 1 and 2: 11-12Annual Report andAccounts 2011
Page 3 and 4: A COMPANY LIMITED BY GUARANTEE (Com
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Page 15 and 16: Governors’ BiographiesMr Philip R
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Page 23 and 24: THE GLASGOW SCHOOL OF ARTSTATEMENT
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Annual Report and Accounts 11/12 - Glasgow School of Art

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