The principal can delegate many activities, but few responsibilities. One area which cannot be delegated is the relationship with the governing body. Little is done, however, to prepare college managers for the new breed of governors, most of whom are from the harsh world of business and commerce. Many principals tell me that their only preparation was “sitting next to Nellie” - watching their previous bosses at work.

Under the articles of government, the principal, not the chair, is the chief executive of the college. In industry the chief executive and chair roles are often combined. However, after (and partly as a result of) the Cadbury Report which investigated governance of public companies, only around 18 per cent of the top 500 companies have continued to do so.

Giving the principal the title of chief executive underlines the fact that that he or she has responsibility for the executive management and academic leadership of the college. The broad industry parallel is the managing director who runs the company but answers to a board of directors, generally overseeing the company’s performance. To underline this distinctive role, I will use the term “chief executive” rather than “principal”.

The chief executive and chair need mutual trust and respect. If their relationship is poor, the effective management and governance of the college and its long-term success is jeopardised. And if the relationship is very poor and incapable of resolution, then one person has to go. The chief executive, therefore, must devote particular attention to developing a close relationship with the chair and all chairs of governing body committees.

The governing body and the chief executive must clarify the grey area between governance and management. The committee of public accounts in its 1994 report Proper Conduct of Public Business said that “chairman and members should ensure that chief executives and senior managers are clear what their individual responsibilities are”.

The governing body is responsible, for example, for the overall mission and educational character of the institution. The chief executive puts proposals on these to the governors. Their responsibilities are complementary.

A simple but powerful exercise, preferably at a residential conference, is for the chief executive and senior managers and the governors to write down what they want and expect from each other in the forthcoming year. Comparing results enables both sides honestly and openly to clarify their working relationship and identify possible misunderstandings.

The governing body will agree policies and strategies and monitoring arrangements. It must have objective and effective means of knowing whether the college is being properly managed and is in good financial health.

The chief executive, as well as the clerk, has an important role in maintaining an information flow to governors. Governors need to know about the business of the college - but not too much. They will require clearly-focused board papers setting out the implications of decisions and how the college is performing against its business plan. The Cadbury Report was clearly right in pointing out that discussion at the board is no better than papers that are presented.

The governing body will also monitor the chief executive’s performance. Monitoring must be more than an informal discussion between chair and chief executive.

Clear performance indicators are required for a detailed and rigorous appraisal of the chief executive. The chief executive needs to be proactive in agreeing with the performance criteria and how best they can be measured. This subject deserves more research.

Arguably the most important task of a governing body is the appointment of the chief executive, the senior employee of the governing body. Colleagues on the milkround of interviews tell me that every governing body handles this differently. An inappropriate or mistaken appointment will be costly and possibly disastrous. Professional advice, possibly from recruitment consultants, will help ensure the right decision is taken.

The position of chief executive is intensely political. On every governing body, there will be alliances forming and reforming. The chief executive has to see who are the key decision-makers, maintain a good relationship with them and keep a close eye on those who may be losing interest. A sixth sense is useful to identify potential problems.

While the FE sector might not yet have the well-publicised boardroom battles we hear about in industry, there are occasions when the chief executive has to tread carefully to make sure the governing body retains its unanimity. Hence the need for political skills of a high order.

Members of the senior management team, including the clerk, should be encouraged to develop a close working relationship with the governing body. They should certainly attend meetings and, where appropriate, make presentations.

In National Health Service Trusts and public companies, senior managers serve as executive directors on the board. In only 7 per cent of FE sector colleges, however, is at least one senior manager co-opted on to the governing body. To exclude senior managers almost entirely from governing body business, deprives future chief executives of the opportunity to learn about how a governing body operates. The “secret garden” of governing body activities will make life extremely difficult when appointed to the top job.

The quality of individual governors is crucial to the success of the college. Chief executives will want to steer the governing body towards having open procedures to ensure new members are appointed on merit - as emphasised by the second Lord Nolan report on standards in public life. Several colleges are now advertising for members. Most colleges now have a search or nominating committee to identify potential members of high quality.

The chief executive is an employee of the governing body, its professional adviser, the college’s accounting officer and (governors may need on occasions reminding) a full voting member of the board. Time must be invested in developing mutual trust and respect. Openness and honesty are essential, with perhaps a bit of luck thrown in.

If the chief executive gets these right, then a crate rather than a bottle of champagne is called for.

John Graystone is chief executive of the Association of Colleges in the Eastern Region.