Drawing lessons from the University of Dundee: What should other HEIs be doing to assure themselves and avoid similar outcomes?

The financial collapse of the University of Dundee should prompt other university governing bodies and senior leadership teams to reflect on the lessons learned to ensure their ongoing success and resilience. 

Introduction

Professor Pamela Gillies' report to the Scottish Funding Council identified multiple contributory factors that impacted Dundee's ability to ensure appropriate financial oversight and effective decision-making, ultimately resulting in the university's financial collapse. While the report acknowledges broader issues within the Scottish higher education landscape, it notably highlights that "the University of Dundee is the only one of nineteen universities and specialist institutions to have suffered a financial collapse." 

At Strive Higher, the events at Dundee and the subsequent review catalysed team-wide discussions about how we - and others within the sector - can respond to the lessons learned, ask the right questions, and develop appropriate support and resources to strengthen HEIs going forward. 

Four key areas for institutional focus 

When examining the interconnected issues at play, Professor Gillies' report identifies lessons for the wider sector that can be broadly categorised into four key areas: 

1. Financial oversight and transparency 

The challenge 

Changes in the higher education landscape over the past 20 years have prompted varying responses from across the sector, with some HEIs navigating these changes more successfully than others. The shift from a funder-regulator model to a more liberalised approach in an increasingly volatile marketplace has fundamentally changed how universities must plan and manage their resources. 

Those that have adapted and thrived have invested in their capacity to: 

• Determine appropriate ratios for their specific context (e.g., debt-to-infrastructure investment and teaching-to-research ratios) 

• Plan effectively for a changing and volatile external environment (e.g., declining student numbers) 

• Continuously monitor and reassess overall financial sustainability 

• Make difficult decisions at the right time 

Leadership capabilities  

Leadership teams must ensure sufficient financial capability across the entire executive - not just the CFO, for example. Senior leaders should be equipped with the necessary financial acumen to both manage their respective areas and offer informed consent and robust challenge as part of key decision-making processes and investment decisions. 

Key questions for institutions 

• Are we upskilling our professional services and academic staff in financial training to match their evolved responsibilities? 

• Are we providing responsible financial stewardship of resources that aligns with our stated values and our students' interests? 

• Are we effectively balancing academic vision with financial sustainability? 

• Do we understand the trade-offs & impact of focusing on different strategic priorities? 

• Are we making difficult prioritisation decisions when necessary? 

Strengthening financial oversight & transparency 

• Ongoing investment in financial literacy: Provide training for those in leadership positions, commensurate with their respective levels of responsibility 

• Foster a culture of critical questioning and challenge: Encourage robust debate and scrutiny, particularly as part of decision making & prioritisation  

• Regular, accessible, and transparent updates: Share information on financial sustainability and associated risk factors (e.g., student recruitment risks) 

• Maintain clear separation: Keep capital management separate from wider university finances 

• Define roles and responsibilities explicitly: Clarify expectations for financial management, reporting, decision-making, and escalation procedures 

2. Leadership accountability and culture 

Strategic vision and prioritisation 

HE providers should develop and maintain a clear vision and strategy that the entire organisation can understand and contribute to delivering. This vision serves as a unifier and framework for planning, prioritising, ensuring alignment, and organising resources. 

A critical issue - evident at Dundee - is the inability to prioritise ruthlessly to ensure ongoing financial sustainability. Institutions must develop a shared understanding and acceptance that not all academic activities need to be equally financially promising, as there is inherent strategic value in maintaining breadth and diversity across a university's disciplinary offerings. 

Difficult decisions and culture 

Universities must develop tolerance levels for difficult decisions that leadership teams may need to make. When a previously strong market for a particular discipline begins to decline, this may require reducing that discipline's scale or rethinking the approach to management. These decisions are not antithetical to being a university - this represents the critical link between strategic decision-making and overall culture. 

The role of leadership behaviour 

Leadership behaviours are critical in this space. Leaders not only play a central role in developing healthy culture but also help create environments where others can thrive by demonstrably living institutional values. As Professor Gillies’ report states, while culture was not the primary cause of Dundee's financial collapse, it was identified as a contributory factor. 

Key questions for institutions 

• Do our leaders consistently speak up and offer challenge, even when operating outside their core areas of expertise? 

• Do our people have the skills, confidence, and psychological safety to offer challenge to leaders at all levels? 

• Do our leaders consistently model leadership behaviours that align with our stated values? 

• Do we value and ensure diverse representation of skills and experiences throughout our leadership structure? 

Building a culture of leadership accountability 

• Foster a culture of curious challenge: Ensure leadership receptiveness to challenge and encourage curiosity at all levels 

• Leaders must demonstrably live institutional values: Lead by example in all interactions 

• Provide opportunities for constructive challenge: Respond positively and openly to feedback at all levels 

• Proactively foster diverse talent pools: Ensure a mix of experiences, skills, and capabilities throughout leadership structures 

3. Risk management 

The Dundee experience 

The lack of active risk management, challenge, and oversight of the risk register undoubtedly contributed to the complex web of issues at Dundee. 

Developing effective risk management 

Organisations must develop an effective, integrated approach to risk management that includes a comprehensive framework clarifying risk identification, assessment, management, and monitoring processes. This should be integrated with strategic planning, budgeting, and operational decision-making rather than treating risk management as a separate activity. This integration ensures risk management embeds throughout and doesn't become an afterthought. 

Cultural foundation 

A strong culture that encourages active challenge and creates sufficient psychological safety for people at all levels to speak up will ensure risks are flagged early before evolving into active issues. 

Key questions for institutions 

• Do we actively cultivate a mature risk management culture that encourages open dialogue and empowers people at all levels to raise concerns without fear of retribution? 

• Do our leaders’ model appropriate behaviours, allocate sufficient resources to risk management activities, and consistently reinforce the importance of risk awareness throughout the institution? 

Developing mature & sustainable risk management 

• Establish clear accountability: Implement executive-level sponsorship with associated governance mechanisms and escalation routes 

• Define organisational risk appetite: Align with strategic ambition and ensure consistency at faculty and departmental levels 

• Consider training and upskilling needs: Clarify formal responsibility for risk management and ensure all individuals are clear on their responsibilities in this regard 

• Create dedicated risk management roles and governance: Provide appropriate authority and resources to ensure effective risk management is prioritised  

4. Governance structure and independence 

Failures at Dundee 

Professor Pamela Gillies identified multiple governance failures that contributed to Dundee's downfall, including: 

• Lack of independent oversight 

• Absence of formal documentation and communication around governance mechanisms 

• Failure to provide agendas, unbiased minutes, and transparent decision-making communication in a timely manner 

The need for effective governance 

Effective governance and oversight is critical and requires a multi-layered approach that balances the need for academic freedom, recognition of differing disciplinary needs across an HEI with accountability and strategic oversight. 

Key questions for institutions 

• Do we maintain accurate records and ensure transparent decision-making? 

• Do we have the right mix of skills, expertise, and experience on our Executive team to ensure a balance of ideas, challenge and approach? 

• Does our governing council maintain appropriate independence from university management? 

Implementing effective governance & oversight 

• Independent oversight is essential: No decision-making body should have responsibility for determining the success of their own performance. Independent, dispassionate, and objective oversight must be in place  

• Decision-making: It is insufficient for key officers to make decisions based solely on overall agreement - every decision needs to be evidenced and properly communicated through established channels

• Getting the basics in place: Establishing a robust approach to embedding key administrative processes into governance structure is necessary – ensuring early sight of agendas, transparency around sharing minutes, key decisions & evidence  

Conclusion 

The lessons from Dundee provide a clear roadmap for HE providers seeking to strengthen their resilience and sustainability. By focusing on these four key areas - financial oversight and transparency, leadership accountability and culture, risk management, and governance structure and independence, universities can build robust frameworks that support both academic excellence and financial sustainability. 

The challenge is not just to implement these recommendations but to embed them within institutional culture and day-to-day activity. Only through this integrated approach can HEIs ensure they are well-positioned to navigate the complex and evolving higher education landscape while avoiding the pitfalls that led to Dundee's collapse. 

If you’re interested in having a conversation with us about any of the themes outlined in this article, get in touch to discuss how we can support you.