The Further Education Funding Council launched its inquiry following a damning inspection and after more than 50 members of staff had made complaints. Its confidential report refers to a culture of intimidation at the college.
In March, principal Chris Chapman was suspended after Basildon received the third worst inspection report ever.
There had been 20 disciplinary hearings in the fortnight before the inspection.
The then chair of governors Tom Coventry had said the suspension was a precautionary measure to safeguard Mr Chapman and the college, and he continued to have their full support.
But this week the funding council said in a statement: "We are satisfied that the governing body has accepted the seriousness of the situation ... and they have agreed to a phased resignation of all governors."
That has already started. Eleven governors have gone, leaving a core of fiveincluding John Gould, the acting principal, and FEFC nominee, Professor Robin Smith of Anglia Polytechnic University.
The new chair of governors is John Robb, chief executive of Basildon District Council. Mike Collier, a FEFC regional director, will be an observer.
The investigation was the first job for the funding council's newly formed investigations unit.
Mr Gould said a special college committee is now looking at issues involving the principal.
He added: "We are looking for new governors and working very closely with the funding council regional director, and the inspectorate. We are working on an action plan for governance, and one for the rest of the college."
Mr Gould said a lot of work had gone on improving industrial relations.
A representative of lecturers' union NATFHE confirmed that the atmosphere had improved. "The funding council is going to invest a bit of money and vet new managers. As soon as that is all done and dusted we might see some changes."