Due diligence is a peculiar business process that a MAT uses to assess a school but the information obtained makes or breaks the final decision making.
Historically, a MAT is expected to come to a school, present their credentials, make promises on ‘life after joining the MAT’ and then stand back so school governors can make a decision on whether to join. Whilst a school can review the publicly available information, there is no requirement for the MAT to open themselves up to any detailed scrutiny. Any promises can be easily broken once the school has joined the MAT. It is an educational beauty pageant with a single contestant although a school can invite other MATs to make a pitch.
Yet, following this beauty parade, the MAT then puts the school through a process that is more akin to a science experiment. The school is put under the microscope as a full and detailed due diligence process is undertaken by the MAT on the school. However, how many MATs share due diligence findings with the school and then have a frank discussion about what will happen once the school has joined the MAT based upon that qualitative and quantitative data?
Due diligence is an important element of risk management but is a process that appears unbalanced for what it is, with the MAT and the school making their final decision based upon their own information although both parties have to agree for the integration to conclude. However, this integration process has built a momentum of its own over many months and at this final stage is very difficult to stop. How many school governors, or MATs trustees, would have the courage to suggest that the integration process is stopped at this stage, as it is too easy to go with the flow and take the easy option, especially when the legal contract just needs to be signed?
However, even when due diligence identifies serious issues, integration has been concluded based upon the premise that ‘it will be alright on the night’ despite storm clouds being clearly visible. Presumably, on the basis that there is no guarantee the issue will actually arise, but if it does, it can be sorted out at that time, and probably by somebody else who gets landed with resolving this.
Whilst due diligence is undertaken to minimise risk, it is the MAT that is fully exposed to any unforeseen issues that may subsequently arise once the Commercial Transfer Agreement (CTA) is signed. Once signed, there is no recourse by the MAT to any other party even if a major issue subsequently arises from the school joining the MAT. That is why Frank Field Education Trust will undertake extensive due diligence on any school wishing to join so that we ensure the risks identified are consistent with our risk appetite. When it goes pear shaped after a serious issue is later identified from the school integration into the MAT, it is solely down to the MAT to resolve. This is why detailed due diligence is undertaken by the MAT, and why more is better.
A school’s Headteacher role is to manage the school so has little time to undertake due diligence, and that assumes the Headteacher has the right skills and experience to undertake this, which in itself is very doubtful. As a result, it is likely that the school would use external specialist resources to support the due diligence process. However, using external specialist resources does not transfer the responsibility and the decision making process.
So can the due diligence divide between the MAT and school be drawn together? Due diligence could be a joint process but that relies upon significant levels of trust between both parties and the willingness of the MAT to share their due diligence findings – warts and all.
