Shetland College is to appoint two new senior staff to pep up the way it is managed, following a critical report from HMIE.
The review, published last Friday, praised Shetland's approach to learning and teaching, saying staff and students had mutually supportive relationships.
But the inspectors said communication between management and staff left much to be desired, a criticism George Smith, the college's interim director, was only to happy to admit.
The Scottish Funding Council is seeking assurances that the college will act on its shortcomings "without delay". Of the seven cross-college elements scrutinised, only two (resources and quality assurance) were found to be good; the others, including leadership, were rated only as fair.
Mr Smith was drafted in from Shetland Islands Council's redundant community development department, which he managed until his new appointment in March. His predecessor as college director, John McClatchey, resigned after just one year in post due to poor health.
The inspection took place last December, following up the previous HMIE visit in March just after Mr Smith had taken over.
Mr Smith described it as "a very fair report", which highlighted the quality of teaching and learning, and noted the academic achievement of many students.
He added: "Clearly, however, there is work to be done in improving our management processes. We have to develop better communication channels between the board of management, management and the staff to ensure that everyone is fully aware of college priorities and plans and is able to contribute effectively to achieving them.
"We must do better in evaluating the learning and teaching and ensure that we are continuously checking the quality of what we do and striving for improvement."
Drew Ratter, the chairman of the college board, said the college intended to create new senior posts to tackle the areas needing improvement. They will include a depute director whose remit will be quality improvement.
Innovative courses are also on the agenda and the staff will shortly be having an away day to review the strategic and operational plans for the college.
The inspectors also looked at five subject areas in the college to gauge the effectiveness of the way students were taught and their progress; of 10 possible scores, two were very good and the rest good.