John Kay responds to some of the criticisms that resulted from his recent article in Prospect Magazine.
The stakeholding debate is about whether companies should be run exclusively by and for the benefit of their shareholders or whether their objectives and governance should include a wider community responsibility. I have argued that companies with that broader perspective may be more productive for all their stakeholders – including shareholders themselves. (see Prospect, The Good Market, May 1996)
A closely analogous issue arises in the governance of universities. Institutions of higher education evolved in two principal ways. Some were self-contained scholarly institutions often with monastic origins. These were usually self-governing and responsible – at least on earth – to themselves. Civic universities were established and endowed by local communities whose leading spirits understood the public benefits of higher education. They answered to bodies of trustees who represented the diversity of community interests involved.
There are arguments for each structure – as in the stakeholding debate. But the verdict of the educational market place is clear. The twentieth century has seen the advance of the civic institutions over the monastic ones. The historic universities of continental Europe are now shadows of their former selves. The civic institutions have not only served their communities but achieved more effectively the goals of modern scholarship. The position in intellectual life once occupied by the Sorbonne is held today by the Massachusetts Institute of Technology.
My critics (Prospect January) are surprisingly ready to concede this. For David Marquand, Oxford is “one of the half dozen or so great universities in this country”. Is that all? For Alan Ryan Oxford’s peer group is not the successful research based universities of the United States, which today sweep up the best faculty and students from around the world. It is the liberal arts colleges of the east coast which seek to emulate the monastic tradition, and provide impressive undergraduate education for an American social elite. I am less ready to accept second division status and that is why it is I, not my critics, who are defending Oxford.
At their best, self-governing communities of scholars are inspirational. But institutions built around them tend to become introverted. Even in monastic times, bishops had to discipline political abbots and idle monks. It makes little direct difference to the daily life of Harvard dons that their ultimate responsibility is to the Harvard Corporation. But at key moments, it does matter. If Oxford were accountable to external trustees, it is inconceivable that no vice-chancellor would ever have been appointed from outside the University. Oxford could not maintain its high-handed treatment of donors. Arguments over access and exclusion would be conducted by different people and from different premises. And the establishment of a business school would be a very different process.
Of course a university cannot be run like a plc. But that does not mean that many of the management techniques of the plc – like budgeting, resource planning, and the establishment of clear lines of responsibility and accountability – are not equally relevant to a modern university. Of course a university should not be an autocracy. But there is a large middle ground between autocracy and having no decision-making structure at all.
A successful university – any successful organisation – is based on consensus. But there is more than one route to consensus. There is leadership which unites behind a coherent and persuasive strategy. And there is timidity which runs away at any hint of disagreement. The problem with the latter route is that the apparent consensus is superficial. Half an hour in a senior common room will elicit festering dissatisfaction with ‘the University’. I lost count of the occasions on which people told me ‘the University should do this’, with no sense that they were the University. And this sentiment was reciprocated. Many university officers genuinely believed their function was to defend ‘the University’ against its departments and colleges.
In a revealing comment, the Vice-Chancellor, Colin Lucas, asserted that Oxford had ‘rejected the model of an American business school’. That emphasises the inchoate nature of its processes. Who had rejected it, when, how, and on what grounds? It would have been good to know this before I arrived, not after I left.
It would have been better still – since there are more than a thousand business schools in the United States – to have known which model had been rejected. Was it Harvard, the best known business school in the world, with resources which make all other academic institutions green with envy? Or perhaps Stanford, which combines an unmatched intellectual reputation with deep links to Silicon Valley? Or Chicago, with more Nobel prize winners in its business school than Oxford in its university.
The notion that Oxford has the luxury of rejecting American experience and achievements is a fanciful conceit. A successful Oxford business school would not exactly follow any of these models, but would have much to learn from each of them.
I had hoped to help create a business school which would rate 5 in the next research assessment exercise and would be in, or close to, the top 25 institution in surveys such as that of the Financial Times. This is short of the world class business school which the University sought, but a springboard to it. My judgement was, and is, that this goal is attainable but not within the constraints the University imposed.
I would like to believe I was wrong. But in today’s world of league tables and peer review, there is no point in extended slanging matches about issues which will be objectively, if imperfectly, assessed. In academia, as in business, debates about governance are ultimately resolved by the verdict of customers.