"With alarm" is the short answer. It all sounds like symptoms of panic.
This is an important meeting so keep cool. You haven't agreed to anything yet.
You don't say how your agenda is drawn up. A small group of head, chair and clerk often do it, and it would be helpful to find out how your chair feels about these items. If your school has had a bad year, it is more important than ever that the governing body should play an active part in all the issues. Indeed, if you had been classed as having serious weaknesses or worse, you might well have found that Ofsted would have recommended your direct participation in staff appointments and your attachment to areas of the curriculum. They might also have suggested looking again at your behaviour policy.
The Government have - unwisely in my view - made it possible for almost all functions to be delegated to the head, but the decision is for the governing body. Nobody can force it upon you. The law also still allows governors to share in staff appointments. Do not accept delegation of any process which seems to you to have a bearing on the healthy recovery of the school.
I have mixed feelings about involving governors too deeply in class observation with a monitoring purpose because it comes close to the borderline between governance and management.
The question of setting by ability is complex. I referred to an element of panic in your agenda and this may very well be an overreaction to poor exam results. This is more a professional than a governance issue, but it should be well ventilated among both staff and governors before decisions are made.
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