December 2005/48 (web only)
Guidance for governors and senior managers
Related companies: guidance for higher education institutions
Produced for the UK funding bodies by RSM Robson Rhodes
Higher education institutions set up related companies for a variety of reasons to help them manage their activities efficiently and flexibly. This guide outlines the issues and risks associated with assurance, compliance and accountability that are faced by institutions when using related companies. The guidance is not prescriptive, but a tool for institutions to use as they think fit.
- 1 Executive summary
- 2 Introduction
- 3 Risk assessment guidance
- 4 Activities and entities for related company activity
- 5 Checklists
Glossary of terms
Appendices (separate file)
- Appendix I - Duties of the Nominated Officer
- Appendix II - Nominated Officer's report
- Appendix III - Duties of companies' officers
- Appendix IV - Contents of key documents
- Appendix V - Specimen memorandum of understanding
- Appendix VI - Outline business plan
- Appendix VII - Protection and exploitation of technology and intellectual property rights
1. Institutions set up related companies for a variety of reasons: for example to carry out commercial activities, to provide a focus for commercial enterprise in a culture different from that of the institution itself, or to protect the institution's charitable status and/or provide advantageous tax or estate planning. Increasingly, related companies are also being used to commercially exploit intellectual property.
2. Related companies provide institutions with opportunities to manage their business efficiently and with a degree of flexibility and varying involvement. However, the use of related companies also exposes institutions to a number of risks.
3. This guidance has been produced by RSM Robson Rhodes for HEFCE, on behalf of the UK higher education funding bodies, to outline the assurance, compliance and accountability issues and risks faced by institutions in the use of related companies.
4. In line with the principles of better regulation, the guidance is not prescriptive. It is a tool for each institution to choose to use and adapt, as it feels appropriate, in accordance with its own objectives, priorities and assessment of risk.