What happened at the PMSA Governance Forums?
Recently we had the “Governance Forums” hosted by the PMSA, with PMSA Councillors, School Councillors, School Principals and the PMSA Corporate Office in attendance.
A forum is defined as “a meeting or medium where ideas and views on a particular issue can be exchanged”.
However, instead it was a show.Stage managed, crafted, highly scripted, minimum audience participation, though not for want of trying many times.
Each of the Forums had 10 questions only up for discussion.For each of those ten questions, only two clarifying questions were allowed. So, ten questions crafted previously by the PMSA based supposedly on participant submissions, 20 clarifying queries not previously presented but you were not allowed to deviate from the topic of the question you were clarifying.
Several of the ten questions were the same across the three Forums – six of the questions at the Somerville House forum were the same as those at the BBC forum.
The Forums were stated as an opportunity to discuss the current governance structure of the PMSA and provide clarity on governance change options available, and “provide the opportunity for the community to ask questions” . As we know there has been much discussion and conjecture as to the effectiveness of the Forums due to the need to:
Pre-register attendance (people should be able to attend without identifying themselves);
Pre-register queries (which stymies free flowing and “direct dialogue” as promised by the PMSA Chairman on ABC radio on 27 October and 3 November 2017);
Hold the Forums without audio or film recording of the session, limiting participation by boarding families and others who for various reasons cannot attend in person or be available at the exact time the Forums were held.
Even though the PMSA stated on their website that they were “taking notes” the PMSA has confirmed that there will be no minutes from the Forums. The only output will be the 10 questions posted on their website with their answers.
It is unclear whether any of the clarifying questions or questions from those participating online will be included on the website Q&A. It is even more unclear whether those clarifying questions which were not answered in the forums because they were taken “on notice” will be answered in a transparent way or answered at all on their website Q and A.
Yet again we are not surprised that there is a lack of transparency, both in relation to the process of addressing stakeholder concerns and about information which should be shared with stakeholders, without question.
Yet again we are not surprised that the PMSA does not deliver on promises and falls well below expectations, failing at times to even meet the low bar of minimum requirements.
So, going back to our blog just before the Forums, did we get it right? Our two main areas of concern were:
Will there be selection of “PMSA friendly” questions at the forum rather than the more genuine and critical stakeholder queries; and
Can and will the PMSA Councillors take responsibility for every query and answer, or will we hear a deflection of responsibility as has been heard by stakeholders when they have had individual interaction with the PMSA such as:
The Churches have deemed the school council charters as unavailable.
The AICD is the only entity who can answer questions about the design of the review.
A resounding yes – I think we got it right. That doesn’t give me any joy and cause for celebration.
That just amplifies my concerns.
The Forums kicked off on a positive note. The chairman of the PMSA mentioning that we all want to move forward, collaborate and work together. There was even an acknowledgement of past mistakes although these were not specific, which caused concern at the Somerville House forum. It was even stated “where possible we will answer questions” and “there are no pre-conceived ideas”.
Even that wasn’t delivered at the various Forums.
The PMSA friendly questions were not what you would call hard hitting. Each Councillor at the front took a turn to answer a question, and they did so from prepared notes. Often the questions were not actually answered prompting a “is that a yes or a no” from the audience. Not exactly interactive.
Maybe the clarifying questions was where all the action was to be had – but then again – no. Most clarifying questions received a response such as “thank you for your question, we will take that on notice”.
So, what were some of the themes of the Forums, and what were the takeaways for stakeholders.
Theme 1 – Don’t blame us!
As expected the stand out feature of the evening was that everyone not in the room was to blame for the current criticisms, and not the PMSA itself.
The AICD was blamed by the PMSA for the restrictive nature of the review, the anticipated limited reporting back to stakeholders, the mistake with the email for the submissions, the terms of reference of the governance review and the timeframes.
It took one brave soul at the BBC Forum to highlight that although the AICD may have made extensive recommendations to the PMSA, at the end of the day, as the PMSA is the governing body of the schools, it is the decision-making body, and not the AICD. That they needed to own their own decisions rather than blame their consultants.
The Principals of the various schools were blamed for not keeping the PMSA abreast of the P&F incorporation issues and even for being the main reason for the so called “communication blockage” at various schools. Given that the BBC Principal has been in the job four months, and the Interim Principal at Somerville House has been in her role for just over six months, it did seem churlish to blame them for long standing communication issues and a flawed communication structure.
A recipient of a lot of the blame was the constituent churches. Which ties into our next theme;
Theme 2 – It is all too hard!
According to the PMSA Strategic Advisor, the consultant Mr David Mallam, dealing with both Churches is all too hard. It takes too much time, and all the stakeholders, including the PMSA, just need to accept the supposed realities of dealing with the Uniting Church in Australia (Queensland Synod) and the Presbyterian Church in Queensland.
I don’t think there were many stakeholders in any of the Forums that bought this story. And what a story it is. For a start, it is disrespectful of the experienced and educated members of both churches who quite capably and competently manage other schools in Queensland.
Secondly, governance reform is not difficult. It can be time consuming and it requires attention to detail, but the PMSA is not attempting to colonise Mars and they are not performing neurosurgery.
As those with organisational change management experience know, organisational success requires:
Vision;
Skills;
Incentives;
Resources; and
An action plan.
If we lack vision, we get confusion.
If we lack skills, we get anxiety.
If we lack incentives, we get only gradual change.
If we lack resources, we get frustration.
If we lack an action plan we get false starts.
if you were restricted to picking just one thing the PMSA lacks, it would be incentives. There is clearly no will to implement this organisational and constitutional change.
As a result, what we will get if the PMSA continues along this path is gradual change at best and flawed unsustainable change as a likely outcome.
I would add, and this is supported below when we look at the constitutional working group, that the PMSA also lacks an appropriate action plan so we will also get a lot of false starts.
Further, those at the forums were told about the “trickle down” effect by Mr Mallam. How everything is inter-related and changing something, for example in the School Council Charter documents, may have an unintended consequence in some other unspecified policy or procedure.
Exactly. Which is why you start any governance review where there is a need for a systemic overhaul, with the very foundations of the organisation. A review of the appropriateness of the legal structure, the appropriateness of the constitution and other foundation documents, and then you work upwards. In that way all flow on impacts are captured and dealt with appropriately and at the appropriate time, and nothing is left as an unintended consequence.
At all the forums there was discussion of a constitutional working group which has been working separately to this AICD process, which leads me to the next theme;
Theme 3 – The mysterious constitutional working group
I must have missed the memo in all the communiques we have received over the last six months from the PMSA, but there is a constitutional working group for the PMSA which has been meeting for the last 3 years. What I and many others found interesting about this is that it is not clear:
who is on this group apart from Mr Mallam disclosing he is a member, as well as various but undisclosed church and head office staff and PMSA Councillors;
what the various qualifications are of the participants;
what expertise other consultants and firms are providing.There was some vague reference to AICD, but it is unclear whether they have been involved since 2015;
what the terms of reference for this review are;
what timeframes they are adhering to;
what outcomes are expected; and
how this intersects with the current AICD review as it is not mentioned in the PMSA Community Engagement Plan.
In three years, it is not clear what, if anything, has been achieved. As stakeholders we have not observed any outcomes, given that this constitutional working group has only been disclosed recently but has been in operation since 2015.
This is what you get when you have organisational change process that lacks an action plan - False starts. This is what you get when you have organisational change process that lacks vision - Confusion. And if you lack incentives or will, then you will only get gradual change, perhaps change so gradual it is imperceptible.
This is what you get when you don’t have any external accountability. No KPIs or outcomes, because no one is monitoring and the PMSA is not required to report on outcomes to anyone. It could lead to expenses being incurred for little or no outcome, something which should be avoided at all costs, especially in the current climate.
And where is the stakeholder voice in this constitutional working group. Where are the experienced educators? In three years, none of these important views appear to have been considered.
Is this review intended to run for another three years, six, ten? What is it intended to achieve? Without those objectives being clearly stated, the concern is that it is expected to achieve nothing much at all, which may be just as the PMSA wants.
Theme 4 – The four schools are better off together
This is an interesting theme and one which was the subject of many clarifying questions around the financial statements of each school, and the value proposition for the existence of the PMSA corporate office.
It was also the subject of the most clarifying questions taken on notice. Because we haven’t been provided with the answers to the questions on notice, we just don’t know why each of the four schools are better off by being together.
At the Forums the stakeholders consistently requested separate school financials. The purpose of these requests was to be given assurance that the funds contributed to one school, either by way of parent fees and parent fundraising efforts, past parent fees and fundraising efforts, past student fundraising efforts and bequests and donations are being spent for the benefit of that School.
Providing each School’s separate audited statements would also have the consequence of identifying the corporate costs of the PMSA, and whether the cost savings supposedly achieved by having a consolidated level of governance outweighs the costs of this seemingly unnecessary layer of governance.
The PMSA Councillors were, by the Somerville House Forum on Thursday night, united in their stand that separate school by school financial reports would not be published, even though these documents exist, and they are audited for presentation to the Non-State Schools Accreditation Board.
At the various forums stakeholders appealed to the PMSA Councillors to reconsider this stance, reasonably arguing:
The marketing advantages of giving this information to prospective stakeholders like that done at other well-respected schools;
Providing increased donor assurance and confidence; and
It is an easy way to counter one of the submissions in the Position of an Informed Person report and hence address concerns held by stakeholders.
At each forum, The PMSA consistently took the stance that the four schools are better off as a consolidated group for both financial reporting and operational matters. But very little detail is given to support this, and nothing is provided which can be benchmarked or compared to similar businesses.
These vague statements seem to contrast with the success of many private schools in South East Queensland which do publish separate financial information per school, even when they belong to larger religious groups. This concept of “leveraging” off the other schools, central to the argument that the PMSA schools are better off “together” is obviously not key to the success of Brisbane Girls Grammar School, Brisbane Grammar School, St Margaret’s, All Hallows, Anglican Church Grammar School, Cannon Hill Anglican School and St Aidan’s, to name but a few.
One of the reasons given by the PMSA as to why the schools are “better off consolidated” concerns me more than any other and one which I think it is a huge risk and a definite negative, notwithstanding the positive spin put by the PMSA.
The PMSA states that they use the combined assets of all four school to obtain supposedly cheaper finance. This was confirmed at the Forums. There are loans belonging to one business unit (a School) which is supported by mortgages over assets belonging to all four Schools.
This is scary stuff because the cross subsidisation of collateral over loans may or may not result in lower interest rates, because we can’t see that in the financials to benchmark it.
However, the cross subsidisation of collateral most definitely results in:
The risk of default on loans being spread over all four Schools;
Each asset of each School being subject to divestment risk;
Each asset, whether gifted, received via benefaction, donated, fundraised or funded by fees; and
at each school by the stakeholders being subject to divestment risk.
There is no containment of risk and no mitigating factors employed to minimise this risk.
For example, one School could embark on an ambitious capital improvement or construction program. They could overestimate future fees, suffer a loss of enrolments, overestimate future donations and fundraising, and have, consequently, an underutilised capital resource financed by significant debt.
Maybe that school experiences in the near future the “peaks and troughs” that we were told at the Forums are a natural part of the cycle of operating schools supposedly in the current environment.
What happens?
If that School, the School which has made the decision to borrow is unable to service that debt, it is not only that School’s assets that are subject to divestment by the mortgagor. Every other School is subject to the same risk. And it maybe another School has a more desirable or easily divested asset that the mortgagor will claim.
This is very concerning for each of the four Schools. Each Principal can’t influence decisions made by their colleague Principals and the other School Councils. As we have seen each Principal cannot influence decisions at the PMSA Council level.
So, this is the benefit of consolidation of all four schools? Is this really a benefit of “leverage”? What it seems to be is increased risk for each School. Risk that each School and School Council can’t contain, can’t mitigate, can’t plan for or control.
What does this mean for stakeholders who have spent hard earned money on fees, who have spent the hours fundraising, who have donated funds, time and energy for the legacy of their families’ connection with these much-loved schools? Some families are third, fourth or fifth generation stakeholders. Not to all four Schools. Mostly to just the one School. How would they feel if this commitment, these assets they worked hard to obtain - was dependent on the decisions made by another School, another culture, another motto?
The third element to this myth – what is the value proposition of the PMSA? How do they add value to each School’s community, to each stakeholder? Does the cost savings of being able to purchase insurance and the like “in bulk” outweigh the costs of the corporate office staff, the corporate office tenancy costs, the corporate office consultants, communication and legal spend?
Are we getting first rate, fourth rate, tenth rate return on the schools’ assets? Performance and rate of return is a matter of degrees. A School (read “business unit”) earning a 20% return on assets employed is obviously performing better than a business unit earning a 5% return. Without school by school information, this is not obvious. It is not benchmarked, and it is not a monitored.
Is the PMSA delivering the best value for every dollar invested by past parents, current parents, past student associations and past and present donors? We don’t know. Are they matching the return on assets of similar competitor schools? We don’t know. Are they utilising the most appropriate methodology for measuring school by school performance? We don’t know.
It is a concern.
We need the PMSA to develop and publish their own performance criteria and scorecard. We need the PMSA to report on that scorecard each and every financial year, school by school, so we can measure performance. What are their KPIs? What is the KPI for each School considering the unique aspects of each School? Is what they use, EBITDA, the most appropriate methodology, and even if it is, what was the EBITDA for your School for the previous three financial years? We don’t know.
Another thing we don’t know brings us to theme number 5.
Theme 5 – Don’t acknowledge the mistakes
This is probably more a Somerville House issue but please hang in for this last issue because it will ultimately impact on each of the four Schools.
Beyond PMSA has recently gone through a trip down memory lane to refresh memories as to the genesis of this current reputational (and hence “governance”) crisis.
We don’t know the minute details. Some of those really are private and confidential and I expect will be the subject of legal dispute. There are however a few process and procedural questions which could be answered by the PMSA Council.
The PMSA Council at the Somerville House Forum took the approach that they couldn’t say a thing about the standing down of the former Somerville House Principal.
As much as the PMSA claims it has taken “responsibility for mistakes”, I really can’t see where and when they have. Has there been an apology, either to the former Principal, the Somerville House P&F executives for threatening to take legal action against them, or to the community? If there has, I’ve missed it.
Vaguely referring to “mistakes have been made” doesn’t pass the “pub test” in this instance and doesn’t amount to an apology. It is clear the PMSA council wants us all to forget what happened, before there is any need to admit to “mistakes” and apologise.
Funnily enough admitting to mistakes won’t lessen or increase the legal liability that the PMSA may be facing from several parties. Given that such costs will be borne by the PMSA it will then impact all four Schools, due to the need of each School to contribute into the PMSA corporate office coffers. The PMSA corporate office is a cost centre, the schools are revenue centres. It is simple – increased costs at a corporate level mean decreased funds available to resources at each School level.
The Stakeholders responses
So, what was the general feeling upon exiting the Forums?
Yes, there are PMSA supporters who were there who most likely went home feeling confidence in the Councillors and the satisfaction of a job well done.
That is fantastic, I only wish I had felt the same way.
There were others who spoke quietly as they exited about concerns, about wool being over eyes, about b******t meters being triggered. I heard some people had to go looking for their eyeballs because they felt they had “rolled” out of their head due to the number of times they felt the PMSA didn’t answer or address stakeholder concerns.
Given most of clarifying questions asked were critical in nature, I am banking on most attendees at the forums being concerned. I’m more than merely concerned.
This is a once in a generation opportunity to bring world class governance to these wonderful Schools.
These Schools are wonderful because they are staffed by world class teachers and educators, who want the best and strive to deliver the best. There are no bare minimums, no low expectations, no satisfaction at merely meeting minimum compliance. I’m sure when parents go to open days, listen to the Principals speak and have the entrance interviews with the various Heads of Schools, they don’t hear words like that at all.
I know I heard talk from the Principals and Heads of Schools of exceeding expectations, striving for excellence, encouraging effort and best practice.
So why are we happy to accept such low bare minimum standards from the governing body?
I don’t know about you, but I don’t accept excuses and blame on others from my newly minted teenager when she does something poorly, and I do not accept it from a group of men and women who put themselves forward as being the most capable and competent to do the job.
Stakeholders were told at the forums to “trust” that the PMSA has this all under control. We were told to trust that the PMSA Councillors are adequately monitoring the performance of the Schools and their own performance. We were told to trust that the PMSA has the asset backing to support the substantial and seemingly ever-increasing borrowings that they are incurring.
Trust can only exist alongside accountability. Trust is demonstrated and earned, not handed over freely, particularly not when trust has been shaken by the PMSA’s inability to appropriately deal with and manage a crisis at one of its Schools.
The PMSA alone is responsible for the continuing reputational crisis, their response, the Governance Review and the involvement of the Churches. Whilst the AICD and the Churches are involved, they are not the decision-making body for the Schools. The Churches have clearly said for many years that the PMSA is the sole decision-making body for the Schools.
So, if you felt, as I did, that the Forums were a weak response to how the stakeholders are feeling, that there were too many queries taken “on notice” that we may never get a response to, it is again the sole responsibility of the PMSA to take ownership for that.
The PMSA has the full authority to fix these issues if they want to.
Beyond PMSA, as representatives of 4,500 stakeholders in these four wonderful Schools, are saying to the PMSA Councillors, be the masters of your own destiny. Step up, you have full authority to fix these issues, if you want to. Step down if you don’t.
If the PMSA wants proper structural and constitutional reform, they can commit to it and pursue that outcome with the Churches. They should stop putting roadblocks in place, stop excusing poor performance and behaviours and stop blaming others including the Churches, the AICD and the Principals.
If not us, then who? If not now, then when?
John E Lewis
