Portal to a more diverse future?

Photo montage of diverse faces

Higher education is waking up to the reality that diversifying governing boards will be imperative to the future success of universities. Ahead of the launch of the Board Vacancies portal, Jenny Tester, Project Associate for the Board Diversification Project at the Leadership Foundation discusses the diversity case for increasing the transparency of university board vacancies.

The Parker Review and the Davies Report have shone light on the lack of BME and female representation on boards in FTSE 100 companies. These reports, and the narrative surrounding them, challenge businesses, executive search firms and industries to take action to improve board diversity without the use of enforced quotas.

At a time when the cultural climate is one of action against discrimination, with high profile topics such as the gender pay gap and the #MeToo movement dominating the headlines, the opportunity for advancing diversity is unparalleled. In higher education, the Higher Education Funding Council for England (Hefce) has set a target of 40% female representation on boards by 2020. Last month Scottish legislation was passed requiring public boards, which includes universities, to comprise 50% women by 2020.

According to the report Women Count (Jarboe, 2016) women make up 36% of boards and 19% of Chairs (up from 32% and 12% respectively). In order to meet Hefce’s target on gender alone, the pace of female appointments to board positions needs to increase significantly over the next year. Although much of the current focus on diversifying boards has centred on increasing BME and female representation, the case for diversity should be viewed through a much broader lens.

Diverse perspectives, expertise and experiences strengthens the effectiveness of governing boards, combating unconscious bias and groupthink, enabling governors to interrogate the HEI with the benefit of a breadth of knowledge and experience, and inspiring a future generation from diverse backgrounds to get involved. Ahead of the Leadership Foundation’s Equality, Diversity and Inclusion Retreat, Simon Fanshawe explored how diversity can be advanced through cultural considerations in this recent blog post.

Universities are being urged to reform widening participation – increasing student representation from different socioeconomic backgrounds, ethnicities and geographical regions. As the focus shifts to put the student at the centre of higher education, with tax-payer and student return-on-investment central to the debate, pressure will grow for governing bodies to mirror the diversity of the student body and communities they serve.

The challenge

Despite goodwill in higher education, and a recognition of the need for change, the reality of recruitment practices for board appointments often results in the appointment of ‘the usual suspects’, typically from a narrow demographic. A recent survey conducted by AHUA and the Leadership Foundation found over 50% of board vacancies are not publicly advertised, relying on the networks of the Chair and board members to identify suitable candidates. Although this can be an effective way of securing strong candidates who would have otherwise not considered a university board appointment, it does narrow the pool of candidates to those in the board’s immediate network and risks marginalising those beyond.

Potential candidates who have not built networks in higher education therefore lack the necessary visibility and are less likely to be made aware of opportunities. Couple this with the tendency to hire in the image of self, when only 19% of Chairs are female, and the result is a hiring norm which perpetuates rather than tackles inequality. Where vacancies are advertised, their placements range from newspapers which target a certain readership to higher education recruitment pages which lack the visibility to candidates outside the higher education sector. Higher education now needs to make tangible changes to achieve board diversity. As board recruitment processes can last months, in order to meet Hefce’s target we need to take action now or female representation will fall short by 2020.

Possible solutions

In order to attract a more diverse pool of candidates, there needs to be an increase in the transparency and accessibility of vacancies. For those considering a board level appointment in higher education, a central hub to locate vacancies will serve to increase the transparency of board appointment processes and send a message of inclusivity and accessibility to candidates from diverse backgrounds.

As part of a broader project aimed at diversifying boards in higher education, the Leadership Foundation, in collaboration with the Committee of University Chairs, is piloting a board vacancies portal aimed at providing a central repository of board vacancies across the sector. Not only will the portal provide a central space for those considering board appointments in higher education to locate vacancies, it will also draw new talent to the sector through a series of partnerships with networks and organisations seeking to support diversity. The portal is currently being trialled with a select number of opportunities, with a view to launching sector-wide in September 2018.

The portal is only one strand of the Board Diversification Project, funded by Hefce, Hefcw and the Department for the Economy in Northern Ireland, which includes practical, related initiatives to support greater diversity within higher education boards and those applying for board roles, whether in higher education or outside the sector.

Other strands include:

– Developing a Board Appointment Diversity Framework in partnership with the leading search firms in the sector. This follows from recommendations from the Leadership Foundation report ‘Increasing the diversity of senior leaders in higher education: the role of executive search firms’ authored by Professor Simonetta Manfredi in March 2017.

– Piloting two board readiness workshops following feedback from our Women Onto Boards alumni development survey showing 75% of respondents would be interested in further support in order to develop the right profile and skills.

– Conducting a scoping study to assess the feasibility, effectiveness and practicalities of developing a Board Apprenticeship Scheme in the higher education sector providing aspiring board members with a risk-free environment to gain the necessary knowledge and experience to pursue a board appointment.

The sector has significant opportunity, during times of upheaval and uncertainty, to make tangible changes to the diversity of its governing boards, and in so doing strengthening the quality of its governance for the future.

Jenny Tester is a project associate managing the Board Diversification Project at the Leadership Foundation for Higher Education. The project aims to increase gender and BME diversity on university boards through practical, related initiatives. Jenny was previously a senior consultant at an executive search firm, leading senior appointments in higher education.

How to live and breathe values-based leadership

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Authenticity is a cornerstone of leadership and demonstrating that is a key strand of values-based practice. Leadership Foundation associate Mark Trezona digs a little deeper into what this means in reality.

My lesson in leadership is really to live the values, to breathe the values, to talk about the values. And we might not all experience or share those values in the same way but I think it’s really important that we remember we are here to make a difference. And that difference is all about values.” Cara Aitchison Leadership Lecture 2016.

Values Based Leadership has become ubiquitous in leadership literature and rhetoric over the past few years, partly in response to increasing doubts about the integrity and efficacy of many of the charismatic, dynamic and seemingly transformational leaders that have been prominent.

With leadership experts and practitioners, employees and even entire nations questioning the qualities needed for exemplary leaders, society is demanding leaders who demonstrate a strong sense of values, morals and ethics, says Mary Kay Copeland in her 2014 paper: The Emerging Significance of Values Based Leadership: A Literature Review.

But what is values-driven leadership, and how can we live and breathe our values, as Cara Aitchison calls for?

Copeland identifies Values Based Leadership as the convergence of authentic, ethical and transformational leadership.

Values-based leaders draw on their own and their colleagues’ values for direction and motivation. It is natural for leaders to refer to their own values in creating a vision or making decisions. If they then connect with their colleagues’ values when seeking enactment of their strategies, people are more attuned with each other and what they collectively stand for and care about, as well as what their organisation stands for and the difference it aspires to make.

As a philosophy, Values Based Leadership assumes that an organisation based on shared values is likely to be more flexible and productive, and that values-based leaders will make better choices, build higher quality relationships with colleagues and feel more in tune with their ‘authentic integral self’.

Values in action: bringing a values-based approach to our leadership

If the people we work with are to believe in the sincerity and depth of our organisation’s values, we, as leaders, must lead by example and enact and embody those values – our own as much as our organisation’s.

But how might we do this? The Values In Action character strengths can help.

In 2004, Peterson and Seligman published Character Strengths and Virtues: A Handbook and Classification, which describes the results of a three-year research effort that integrated the insights of over 50 top social scientists into universal personality traits.

As part of this research, Peterson led a substantial historic analysis reviewing the best thinking on virtue, strength and goodness. This mammoth task involved a literature review of previous attempts to classify virtue and an empirical approach driven by two questions:

  • Would the virtue catalogues of early thinkers converge?
  • Would certain virtues, regardless of tradition or culture, be widely valued?

Six similar themes – virtues – emerged across the traditions of Athenian philosophy, Confucianism, Taoism, Buddhism, Hinduism, Christianity, Judaism, and Islam. These were:

Cognitive strengths such as creativity curiosity, judgement, love of learning and perspective in the acquisition and use of knowledge.

Emotional strengths such as bravery, perseverance, honesty and zest involve the exercise of will to accomplish goals in the face of opposition.

Interpersonal strengths such as capacity to love and be loved, kindness and social intelligence.

Civic strengths such as teamwork, fairness and leadership underly healthy community life.

Strengths protecting against excess are forgiveness, modesty, prudence, and self-regulation.

Strengths of transcendence are appreciation of beauty and excellence, gratitude, hope, humour and spirituality.

Twenty-four character strengths were then derived based on how well they met 10 specific strengths criteria, including whether the qualities were morally valued, manifest across situations, and whether there are examples of the strength across the widest spectrum of cultural and organisational contexts.

However, when Values In Action’s Chris Peterson was asked to share his most important finding from all the advancements in character strengths science, he responded simply: character is plural” (Peterson, personal communication, 2010).

What Petersen meant is that people are not simply kind or humble, brave or hopeful. Rather, people have many character strengths, and these strengths are expressed in combinations, each person having a unique profile of character strengths. This informs the rich tapestry of a person’s character. Each person’s expression of character strengths is unique – no two people with creativity as a top strength will express this value in an identical way. In this way, character is individualised and idiosyncratic.

A values framework for higher education

That said, the twenty-four character strengths give us a universal language to describe what is best in human beings. This is a ground-breaking discovery as, historically, there has never been a language of character that crosses cultures. This gives us a potent, meaningful and recognisable framework to think, talk about and act on our different values. It gives us a coherent way of viewing ourselves, and a guide for understanding and sharing who we are at heart.

With this shared lexicon, we can build and grow our collective understanding, interventions and strategies, and make conversations in which leaders, with the people we work with, can bring together a fusion of our individual authentic strengths and values.

In this way we can configure our collective values for different situations, relationships and organisational aspirations in ways that remain deep-seated in our truest and strongest selves – Values Based Leadership in action.

Mark Trezona is an associate and coach with the Leadership Foundation. He has more than twenty years’ experience as a learning and development specialist, with expertise in 21st century leadership, strategy and team development, learning, creativity, communications, and in strengths-based approaches for increasing resilience, engagement and happiness at work. 

Values Based Leadership was the topic of this year’s Annual Wales Conference. Gary Reed, assistant director membership, Wales, discusses what drives it in this blog post.

For more information about our bespoke programmes and how we can tailor them to your institution’s needs, contact Dot Daymond, interim assistant director operations (Consultancy and Bespoke programmes).

Learning by experience to build flexible, resilient leaders

Programme Directors Lisa Sofianos and Gary ReadAhead of the Strategic Leadership Programme later this academic year, programme directors Lisa Sofianos and Gary Reed reflect on why experiential learning is a key part of the programme.

Poor Einstein has been mercilessly mined for inspirational quotes for many years, but here’s one we can’t resist: “The only source of knowledge is experience”. We are unlike Einstein in many ways, but on this we share his commitment to the value of experiential learning in transforming abstract theory into practical knowledge. This is one of the tenets that informs and shapes the design of the Strategic Leadership Programme (SLP).

Another is that, on SLP, we know that we are working with people who are already effective in their roles running complex academic institutions. With this firmly in our minds, we see our job as facilitators is to offer provocations and reframing to help participants move their thinking somewhere new. For us, this is the real work of leadership development, with responsibilities on both sides to learn.

So far so good, but how does this translate into programme activity? 
SLP alumni tell us one of the elements they really value is the simulation exercise where participants take a role in the leadership team of a fictitious – but oddly familiar – university. Their task is to work together to complete some stretching challenges set by the “vice chancellor”. They present their solutions back to the “Executive Board” and are given specific and constructive feedback on their process.

The simulation allows participants to experiment with organisational dynamics in an environment that is safe and removed from the immediacy of their own organisational context. They can take risks, try out the new ideas they have encountered earlier in the programme, and not worry about the consequences, beyond what they can learn from them. This is not a role-play, rather participants are encouraged to step outside their tried and tested approaches and begin to find their own authentic expression of leadership.

Past participants say the real value of this exercise is in helping them to gain insights into:

  • How they operate in a group of leaders and their ideas about roles and responsibilities
  • How they lead and are affected by group dynamics
  • Their assumptions about organisations and their own institutions
  • How they react to pressure
  • How they prioritise and maintain focus
  • Their levels of creativity

The environment is fast-paced and complex, but it is safe and supportive, and most importantly, fun!

And that highlights another of our tenets. Serious learning in a fun, relaxed, and safe environment is an indispensable SLP ingredient.

We look forward to you joining us on the programme.


The Strategic Leadership Programme is for aspiring senior leaders and aims to build leaders who are flexible and resilient.

Find out more and apply:
Strategic Leadership Programme
Application Deadline: Friday 4 May 2018
Module 1: Wednesday 16 – Thursday 17 May 2018
Module 2: Tuesday 26 – Thursday 28 June
Location: Birmingham

Lisa Sofianos has recently co-authored a Leadership Foundation stimulus paper, Exploring the Impact of Coaching in Higher Education, which is available online for members of the Leadership Foundation. 

Why mentors and networks are so important

Maxine de Brunner was previously deputy assistant commissioner, Metropolitan Police. She will join us on the 13 March 2018 as a guest speaker at the Aurora Adaptive Leadership Skills day in Edinburgh. Ahead of her talk, Maxine reflects on the importance of mentorships and support networks for women to progress to top leadership positions.

Firstly, tell us a little about yourself
I spent thirty years in policing and retired as a deputy assistant commissioner in 2016. I have led many large teams as the director of intelligence and the London ‘prepare’ lead for counter-terrorism.

I spent the last two years as the transformation director. I am most proud of helping others develop as leaders, transforming an organisation and trooping the colour on horseback with the Queen. I have spent that last two years running my own business and working with two education charities.

What does good leadership mean to you?
Good leadership means being prepared to admit when you’re wrong, recognising that it is others who deliver for you and the investment you make in people will pay you back many times over. Great leadership is all about the teams you build and the guidance you give them. Supporting them when things go wrong and taking the responsibility for the difficulties while allowing your team the limelight when things go well. As a leader, it is not about you but your people.

For you as a woman, what has been your greatest insight in terms of your journey to leadership?
Understanding that great teams need balance, not just in terms of gender but all aspects of diversity. I have found that you have to be determined, focused, prepared to work very hard as well as be willing and able to negotiate and influence.

At the start of your career, what were the biggest barriers to progression you were faced with and what advice would you give to someone aspiring to a leadership role facing similar barriers?
The biggest barrier at the start of my journey was that there were no women at the top of my organisation and very few in the lower ranks. Women did not have equal pay, pension rights and did not receive the same officer safety training as male colleagues. They were viewed as necessary to look after children and deal with sexual assault cases. I think the most powerful thing women can do when facing barriers is to join together so that they can influence as a single body.

What would be some of the milestones that you think “that’s a point where my leadership changed”?
The main milestone for me was understanding that you could have children and still have a great career. I was given a project when I came back from maternity leave, but I thought (as is the law) that I should have my old job back. I found that I had to insist on this requirement and in the end, they gave in and allowed me to return to my job. I wanted to come back four days a week but did not have the courage to ask for this. My mentor brokered the subject on my behalf and helped me negotiate my first year back.

What would you say if someone were to ask you, what makes you most resilient?
Being reflective and prepared to debrief your own actions, decisions and consequences. I think when times are hard it helps to focus on positive outcomes and not internalise situations. They are not usually personal but about the business, but it is easy to forget that. It also helps to have self-belief and confidence that what you are doing is right. That confidence will come from outcomes, achievements and your network.

What is the biggest insight you’ve had from working with women in higher education on their leadership journey, the opportunities and the challenges?
I have found through my work in education that there are many women in teaching but many senior positions are still often filled by men. Women work incredibly hard in their roles, but senior women colleagues have also focused on themselves and taken time to invest in themselves, have a clear plan to achieve their goals. Leadership is not just about doing the tasks really well, it is also about having the confidence to look up into the future.

How important do you think mentors, role models and networks are in supporting women’s leadership?
The role of mentors and networks must never be underestimated. Being part of a strong group of women gives you the power to negotiate your futures. It is vital that women don’t give this away.

Just look at the recent BBC pay gap situation, a group of women joined together to talk as one body. That helps take the heat away from individuals, and where there are individual positions taken, they are fully supported by the group. It’s very powerful and I have no doubt they will achieve a fair outcome.

How can initiatives like Aurora help women and their organisation achieve their potential?
Aurora can help women understand the values of mentoring and group influence while giving practical tools and help on the journey. It can inspire many to believe in themselves.

Thinking about your career and experiences, what advice would you give your younger self?
I think if I was starting again I would have got involved in a network much earlier as being alone was much harder and many heads are much better than one when problems arise.

Finally, do you have an inspiring woman leader, and if so, who?
The most inspiring woman leader I have met is a lady called Barbara Wilding, she retired as the chief constable of South Wales Police. Barbara mentored me, employed me in a senior role when I thought it was impossible, encouraged me and sponsored me for senior courses and strategic command. She was a great leader herself and cared deeply about others. She was very careful not to pull the ladder up behind her but develop the leaders of tomorrow. I owe her a great deal. It was her influence that enabled me to be supported as a chief officer and whenever things went well or even not so well, she wrote to me with her thoughts. I still have her letters today.


About Aurora
Aurora is the Leadership Foundation’s women-only leadership development programme. Since Aurora began in 2013 we have welcomed 4,635 women from 139 universities and sector bodies, with 1,158 women attending in 2017-18 alone.

Dates, location and booking
We will shortly be releasing the Aurora dates for 2018-19. To register your interest please get in touch aurora@lfhe.ac.uk.

Onwards and Upwards longitudinal study
In March 2018, the Leadership Foundation released the year 2 Aurora Longitudinal Study as a Leadership Insight.

 

Learning from other cultures to tackle inequality

Woman holding her fingers in a cross position over her mouthIn the lead up to International Women’s Day, Nicola Sayers reflects on the importance of cross-cultural perspectives for universities looking to better understand their own systemic inequalities and to make real changes. 

The idea of a ‘Women’s Day’ goes back to 1909, when the Socialist Party of America held a ‘National Women’s Day’ in New York. The international element soon followed, with Russia observing an ‘International Women’s Day’ in 1913; and by the 1970s International Women’s Day, 8th March, was an official fixture in the United Nations calendar. A longstanding history, then, but what, really, is the point of a ‘Women’s Day’?
One might with good reason to argue that, until genuine equality is achieved, every day should be a so-called ‘Women’s Day’, yet another day in which we should press for progress, and must remember the ongoing cultural, social and structural inequalities that women face. But if there is a point to singling out one day, it is surely as a chance to take stock, a chance both to celebrate progress that has been made (which, since 1909, is clearly substantive) and to call attention to the huge amount of work that still needs to be done.

Progress is not linear, of course. Some years chip away at the same old battles, others witness regression, and others yet prove that sizeable shifts can occur quite suddenly – like the coin pusher game in arcades, the pennies build up over time and then all drop quite suddenly. This last year, arguably, was one such year.

The many women’s marches, the viral spread of the #timesup and #metoo hashtags, not to mention race awareness movements such as #blacklivesmatter and #rhodesmustfall: this feels like a moment in which long-standing issues are being stirred up and, for the first time in some time, there is mass interest. None of these movements is without complexity, and around each, rightfully, important debates are being had. Does the visibility of Hollywood in #timesup helpfully raise awareness, or encourage progress only among the relatively privileged, detracting attention from the professions and classes in which harassment and barriers to opportunity are worst? Does #metoo shine a legitimate spotlight on predatory behaviours which might until now have been considered borderline acceptable, or does it risk judging in a media circus what is better judged in a court of law? And does #rhodesmustfall bring crucial awareness to the historical (and continuing) oppression that many of our institutions of higher education are founded on, or does it force surface action on matters that appease riled-up student bodies while glossing over the deeper, systemic discussions that need to take place?

But in all of this what is certain is that there is at present momentum around issues of gender and race that universities would do well to attend to. In this effort, in-depth research is an important correlate of media and social media interest in these issues, so that the push for progress is always backed up by real knowledge. The Leadership Foundation strives always to be conducting timely research on race and gender that will prove useful to leaders looking to make real change in higher education contexts.
One example of such research is a recent Leadership Insight report, Silent Witness: Why are women missing from Hong Kong academic leadership?

First and foremost, the report provides important information for anyone looking to make changes in the Hong Kong university system. It is fascinating, for instance, that there is an outright mismatch between what male leaders perceive as the barriers facing women (family issues and work-life balance) and what women academics themselves perceive as the primary barriers facing them (gender bias and lack of opportunity). It is relevant too, and worthy of further investigation, that while cultural factors – such as the widespread belief in East Asian culture that women should not be more successful than their husbands and should not stand out or be aggressive – did surface as significant, there was some disagreement as to just how significant these cultural factors really were.

But reports like this one are also of interest for UK universities as inter-cultural and global perspectives on women in higher education provide important food for comparative thought; in what ways and to what extent do women academics and higher education professionals face the same problems globally? What are the areas in which other contexts might serve as warnings to us? (For example, do leaders in the UK also over-emphasise the role of family and under-emphasise the role of gender bias in making sense of existing inequalities?). And are there yet other ways in which we might learn from other cultures?

Tackling gender inequality always requires a multi-pronged approach – capitalising on mass media interest, producing and acting on high-level research, and making active interventions both at local and systemic levels. One such intervention is the Leadership Foundation’s Aurora programme, a leadership programme, now in its fifth year, designed specifically for women. As well as being hugely helpful for participants, programmes like this help in turn to deepen understanding of the current realities as well as to bring to light areas for further research.

For example, results from the second year of the Aurora Longitudinal Study showed that many female academics and professionals feel that men taking on more domestic responsibility would gradually shift attitudes towards balancing work and family. An interesting avenue for further cross-cultural comparative research might therefore be to look to Sweden, where men and women generally share parental leave (parents only get all 480 days of available leave if one parent takes at least 60 of those days, thus encouraging fathers as well as mothers to take at least several months leave). How does this impact on gender imbalances in the workplace generally and in higher education contexts specifically?

More radically, one might even look at Sweden’s first ‘gender-neutral’ pre-school – where all mention of differences between the sexes (even in children’s books) are avoided, and where children are referred to using ‘hen’, a gender-neutral pronoun (‘hon’ is the Swedish for ‘she’, and ‘han’ is the Swedish for ‘he’) – as a way to reflect on how deeply gendered expectations are ingrained and what a world without such expectations might look like.

It sounds extreme, perhaps, but if 2017/18 has ushered in a new wave of interest in gender, race and inequality, universities are faced with a real opportunity to ride this wave, complementing it with research and practice that goes above and beyond tokenism and seeks to usher in deep and systemic change.

Dr Nicola Sayers is a former research manager at the Leadership Foundation. She is half-Swedish, half-British and has studied both in the UK and the US. Her recently completed doctorate explored the role of nostalgia in contemporary American literature and culture, but she also retains a strong interest in higher education research. She currently resides in Chicago.

Follow @LF4HE on Twitter and on International Women’s Day, March 8, join in with our #HeroinesinHE campaign to celebrate inspirational women in higher education.

LF Members can read the report: Silent Witness: Why are women missing from Hong Kong academic leadership? 

Is higher education a waste of time and money?

Students at a graduation ceremony

The generally-accepted view is that higher education is a sound investment for individuals and society. Bryan Caplan, an American economics professor, challenges this view. Using data on the US to underpin his analysis, the issues he raises are relevant to the UK. David Williams looks at the arguments set out in Caplan’s new book, “The Case Against Education” from a higher education perspective.

In his new book,“The Case Against Education: Why the Education System Is a Waste of Time and Money” (Princeton University Press, 2018), Bryan Caplan argues that many students make the wrong decision in going onto higher-level study, and that society over-invests in education. He distinguishes the private (“selfish”) benefit of higher education, from its value to society.

The reasons why individuals invest in education is explained by signalling. Signalling contrasts with human capital theory which argues that investing in education leads to the accumulation of new knowledge and skills: the individual becomes more productive and is rewarded by higher earnings. Caplan rejects this view. Most of what students learn at college has limited (or no) value to an employer and fails to make them more productive. Most students take jobs which make little use of the knowledge they accumulate at university: “Academic success is a great way to get a good job, but a poor way to learn how to do a good job”.

Qualifications (credentials) signal not just intelligence, but individuals who are conscientious and conform. To secure their qualification a student will have shown resilience in completing their studies, and conformed to various social norms. Seeking new entrants to the workforce, employers select individuals with credentials that signal these characteristics. The root cause of signalling is imperfect information.
Students are engaged in an ‘arms race’. Higher qualifications differentiate students from their peers. The process is one of “credential inflation”. This does not generally lead to higher skills, but redistributes employment in favour of those with the highest credentials.

Caplan does not believe the skill requirements for most jobs have risen significantly in recent years; many workers have more education than they need and some are “overqualified” and under-employed: “The amount of education you need to get a job has risen more than the amount of education you need to do a job.”

Caplan accepts that neither “pure” human capital theory or “pure” signalling fully explains investment in higher education. His best estimate is that signalling accounts for 80% and human capital 20%. The main role of higher education is to certify the quality of labour, and individuals mostly benefit due to signalling.

The ‘sheepskin’ effect, so-called because diploma certificates were once printed on sheepskins, supports the argument for signalling. For a three-year degree it is not the cumulative build-up of knowledge and skills, which leads to a ‘graduate premium’, but completing the final year. What is important is crossing the academic finishing line and gaining the credential. The sheepskin effect applies to all levels of education. If a student drops-out, they are placed with the pool with lower credentials: “If you quit, the signalling model says the market will lump you with the loser and withhold the sheepskin’s reward.”

Completion rates (the ‘completion probability’) in the US are lower than in the UK. Many students would be better-off by not starting a degree. Examining the likelihood of a student dropping out of a course, Caplan selects four representative student categories: ‘Poor’, ‘Fair’, ‘Good’ and ‘Excellent’. Each reflects a level of cognitive ability and typical outcomes. For example, an ‘Excellent’ student is around the 82nd percentile of ability as shown by US General Social Survey (1972-2012) and fits the profile typical of a master’s degree holder. ‘Poor’ students are around the 24th percentile and typically high school drop outs. Academic success is never certain and strongly influenced by academic ability. Largely due to different completion rates, first degrees for Excellent and Good students are a “solid deal”, but the return on investment for Fair (2.3%) and Poor (1%) students is low.

All categories of students who complete a degree programme receive an education premium. However, Caplan argues the premium is not only due to higher education. Correcting for cognitive (30%) and non-cognitive (15%) ability bias reduces the premium enjoyed by graduates over high school graduates to 40%. Further, the actual premium received is influenced by the subject studied. Graduates gain the highest return where subjects map directly to vocational domains. Talking about “the” return on education is misleading; it also depends on what you study. Caplan suggests the intangible benefits of higher education for individuals are typically a small or there is reverse causation.

For public investment and policy, “given the power of signalling, the social case for education is dramatically weaker than the private case.” Societies over-invest in education. Students unlikely to benefit from higher education should be encouraged to enter vocational training.

Individuals should undertake a first degree if they meet the test of being a ‘Good’ or ‘Excellent’ student. Otherwise they are more likely to benefit from vocational education. Caplan suggests research indicates that ability reflects ‘nature’ rather than ‘nurture’ and that forcing some students down an academic pathway is not in their best interests. He argues his “numbers are the most comprehensive” (compared to other similar studies), although accepting some of his assumptions represent a “best guess”. By making his calculations available, Caplan invites others to check his numbers, and model alternative assumptions if they believe these are justified. While many will reject Caplan’s views or prescriptions, his analysis raises important questions. Given the Review of Post-18 Education and Funding in England, Caplan’s analysis is likely to be scrutinised closely.

David Williams is the editor of our governance pages

Take a look at our programme of events to support staff in governance.