He has become only the second principal in a sector of over 450 colleges to be knighted, following Sir George Sweeney at Knowsley college, Liverpool.
"On a personal level, it is really rather strange for someone like me to become a knight," he said.
"My childhood in Liverpool was very poor. My father died when I was 10 and my mother was illiterate and worked as a char. I never imagined that one day I would be knighted by the Queen, so I feel a mixture of pride and surprise."
He retires this summer after 20 years as principal of Runshaw, which this year achieved a 99.4 per cent pass rate at A-level and an 88 per cent achievement rate for its adult learners at all levels.
Runshaw was awarded seven grade ones in its last inspection, including a grade one for management. It subsequently became a beacon college.
"This honour reflects the performance of Runshaw college rather than me," Sir Bernard added.
"The only thing that I have done is to be its principal for the past 20 years, during which time it has become the UK's leading college.
"I am getting some of the credit for the incredibly high standards achieved by students and staff."
He was accompanied at the investiture by his wife Lady Jane O'Connell, his daughter Rachael and son Andrew. At the investiture, the Queen asked him about Runshaw. "I was able to tell her all about the place," he said.
He will join the Centre for Excellence in Leadership on a secondment in May this year before leaving Runshaw this summer to become a consultant, helping other colleges to improve standards.