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The traditional view of a university has its roots in medieval Europe. In that era, universities served to prepare the future elite religious, political and philosophical leaders of society and held strongly to traditions of independent and collegial governance and management. These values persisted, and indeed reflected reality, through to the post World War II period in Australia. However, the price of such independence was poor resourcing and until the late 1950s participation in university education was low, attrition was high and little research was undertaken.
The progressive move to mass participation in higher education has replaced the world of an elite autonomous group which could select the best school leavers and structure and deliver a degree which would assure its recipient of secure employment and status. Higher education has now taken on aspects of a competitive market, where student needs must be understood and catered for and academic managers must be able to balance the need to be responsive with increased accountability and demands for quality.
These changes are by no means unique to Australia. In the United States, the United Kingdom and Europe, universities have faced rapid growth in student population, repeated demands for improvements in efficiency and quality as well as in relevance to industry, society and students and have faced the added pressure of reductions in public funding. In Australia, the Commonwealth has encouraged institutions to diversify sources of funding and devolved greater financial responsibilities to institutional managers. Universities now must balance the traditional benefits of collaboration and collegiality with an environment of increasing competition for domestic and overseas students, staff, research funds, industry support and status.
The nature of external influences on higher education is evolving. Demographic factors will level off demand for undergraduate places for the next few years, before growth in the relevant age cohorts will see it grow again early in the new century. Government priorities are shifting to expansion of the vocational education and training sector, while other pressures are emerging in importance. The 1995 Karpin Report noted that there was general agreement that three forces were transforming the international business environment: increasing globalisation, widespread technological innovations, and pressure to customise products and services. These forces are also shaping higher education.
In addition, the higher education sector is struggling to come to terms with its contemporary role. There is considerable resistance to its characterisation either as part of the public sector or as a business enterprise. Universities are different from many businesses in terms of their diversity of purposes and the unquantifiable nature of many of their objectives. Yet the higher education sector also shares characteristics of an increasingly competitive environment, both internationally and domestically.
Many universities have developed commercial arms to capitalise on the development of intellectual property and to manage the relationship of the university with industry and the international market. Strategic marketing and competitive advertising are now commonplace as institutions vie for the best students. More generally, competition in public sector enterprises has been highlighted by Australian governments' adoption of a National Competition Policy, arising from the 1993 Hilmer Report. The consequences for higher education of the national reforms to competition policy have not yet been felt, however, they may be significant.
This competitive environment has led, in tandem with moves by government, to ever-increasing attention to quality assurance mechanisms and the re-positioning of the student as a customer or client. The contemporary student population is more diverse, with increasing numbers of women, overseas students, mature age students, part-time students, those from non-English speaking backgrounds and those already in employment. Students are also contributing increasingly to the cost of their education. Their needs will become increasingly complex and exert strong influences on the content and delivery of higher education. Universities are being assessed, and in some cases ranked, according to their ability to provide attractive educational products and services.
The Karpin Report was illustrative of moves to provide greater 'consumer information' on university offerings. Noting that there was a proliferation of MBA programs in Australian universities and that there was relatively uninformed and uncritical knowledge of these programs by prospective students, the Report recommended strengthening of professional accreditation and public collection of information about the supply of such courses. It also recommended greater oversight of the support and direction of management education by universities.
To date, the use of financial incentives by the Commonwealth to influence institutional directions has focused on inputs, with close scrutiny of student enrolments and some discussion of strategic plans and course profiles. Funding for research and some equity initiatives is shifting towards an allocation on the basis of outputs and outcomes and this trend is likely to be broadened in the future. Institutional and government attention will be directed increasingly to non-financial performance information, monitoring progression and attrition throughout university courses and the subsequent employment prospects of graduates.
Focus on the employment prospects of graduates has led to institutions being more concerned with feedback from employers. Increasingly, the distinctions between vocational and professional education, and between preparatory and continuing education, are being blurred and so the relationship between higher education and the vocational training sector will develop in significance. These changes raise fundamental questions about the nature of higher education and the structure of undergraduate and postgraduate programs.
The future development of university teaching will focus closely on flexibility, both in delivery and in the structure of curricula. Developments in information technology will have profound effects on the ability of higher education institutions to develop and deliver education flexibly in the future. To date, these innovations have developed sporadically and the great majority of university teaching relies on established curricula delivered through lectures and tutorials on campus. However, the use of computers to deliver educational material and to mediate communication over networks is rapidly increasing and the prospects are that in a few years the capacity will exist to transmit broadband communications throughout most of Australia. Government incentives are already being provided to establish a multimedia industry capable of utilising this technology for educational and entertainment purposes. The information networks that will be opened up are international in nature and will extend the boundaries both of competition and of opportunity for higher education institutions.
The international dimension in higher education to date has developed largely as a result of the ability of Australian universities to admit full fee-paying overseas students and in the traditionally international nature of research. Formerly recognised for its contribution to the development of the skills necessary for a productive domestic national economy, higher education is now moving to centre stage in its relevance to export generation. It appears that some of the traditional markets for overseas students may have now matured. It is also likely that an increasing number of countries in the Asian region will be looking to develop higher education within their own borders, possibly in conjunction with Australian universities. Developments in the capability of teaching technology and shifts to standard and modular curricula are also likely to lead to prospects of international competition for Australian domestic students.
Even without the use of technology, flexibility in curriculum development and delivery is occurring through open learning, rescheduling of teaching hours and modularisation of offerings.
Over time, these changes will lead to a re-conceptualisation of the nature of academic teaching. As Land (1994) has observed:
'The current situation tends to be one in which the majority of staff time is spent in the delivery or implementation of the curriculum. Using university lecturers mainly for the transmission of information is an expensive way for a university to use its most valuable resource ... the academic staff of 2004 will find themselves more profitably engaged in market research and needs analysis, the design of curricula and educational materials and the evaluation of student experiences'
Changes are also occurring in the nature of university research. Following the 1989 amalgamations, universities that incorporated institutions from the former CAE sector have been seeking to expand their research profiles while maintaining their teaching quality. Demand has been outstripping the supply of research funding from government and industry and there has been increasing strain on infrastructure. As research funding becomes increasingly competitive, the common expectation that all academics should be involved in research becomes harder to sustain. Increasing numbers of full-time research institutes are being established both within universities and outside.
Strong incentives now exist for links to be established between the private sector and university research. Academics are encouraged to be more entrepreneurial in their involvement in commercially relevant research although, as Grigg has observed, such activities '... will probably run into some particular barriers as do other forms of applied research which conflict with academic norms, use of academic time and department resources, issues relating to the interdisciplinary nature of what is required, and tensions potentially about ownership rights'. Incentives for more applied research also arise from government contracts and national research funding bodies. Higher education institutions seek to respond to these incentives while preserving the traditional role of university research as the independent pursuit of basic knowledge.
The general theme of preserving institutional and individual academic autonomy is a recurring one in higher education. At an institutional level, autonomy has always been situated within the context of the interaction of the university with the outside world, both in terms of governments and the professions. This context has been altered as Australian universities have come to service mass higher education and interact far more with a variety of external communities. In this changing environment there is a need to consider what institutional autonomy should mean. The Committee takes the view that it is best defined by institutions themselves deciding their missions and goals and pursuing them to meet the various needs of their communities. Institutions through the involvement of their governing bodies in the strategic planning process should take greater responsibility for their own destiny. At an individual level, autonomy has long been cherished as academic freedom to pursue independent critical inquiry and to undertake, for example, longer term basic research. The notion of lifelong tenure as a necessary condition for the protection of academic freedom is increasingly being questioned as decisions about employment are made in terms of institutional need, the availability of resources and the performance of staff.
Universities are extremely complex and subtle organisations, with multiple missions relating to the development of knowledge and its transmission. Their goals are set within long time frames and are inherently difficult to measure. They incorporate disparate professional disciplines, to which academics may feel stronger allegiance than to their employing university. Within this already complex organisational structure, rapid changes are being experienced in the nature of the academic enterprise. The pace of these changes will continue for the foreseeable future.
Traditionally, academics have considered management tasks to be a necessary evil, but subordinate to those of research and teaching. The academic leaders of the future will no longer be able to rely on research eminence alone. They will have to be able to cope with a turbulent and changing environment. Management of staffing and financial resources to achieve both flexibility and excellence will be necessary, as will the ability to set strategic directions, devolve and delegate authority and inspire staff to work towards common goals.
Changes in methods of management in universities have occurred both in response to government pressures and also as an inevitable result of the increasing size and range of academic enterprises. For example, strong central involvement in universities has been necessary to enable effective participation in the profile process and in the development of quality assurance procedures.
The emergence of 'managerial' structures and the use of strategic plans, performance indicators, quality management and budget controls have been portrayed as a transplant from the private sector that is in fundamental conflict with the traditional collegial styles of university management. In fact, many of the managerial styles embraced by various areas in the private sector, such as the devolution of decision making to local work areas, are more collegial in nature than many of the practices in universities. As Smith (1990) has pointed out, the concept of an entirely self-governing academic body has always been at odds with the existence of a governing body with overall responsibility. Similarly, there cannot be an entirely managerial form of governance when the academic community is required to have responsibility for recommendations to the governing body on the structure and style of the academic process.
Universities are now obliged to confront the fact that the way they have operated and
organised themselves in the past may not enable them to adapt to a rapidly changing
future. The challenge for the system is to preserve the unique nature of universities -
the development of new knowledge and the provision of education through intellectual
frameworks and critical assessment - while operating as large, complex organisations in a
more diverse, competitive and uncertain environment.
Accountability in contemporary society has a much broader focus than it once had. Today, it is more strongly based on outcomes. Furthermore, the traditional Westminster principle of upward accountability is now accompanied by lateral and downward components, involving stakeholders and external review bodies in the critical processes of evaluating performance, not only of the agency or institution but also of the agency's or institution's executives and managers.
Accountability is now widely recognised as a major management tool, fundamental to good governance in public and private institutions and in society in general. Strengthened accountability is intended to hold managers to account for their stewardship, not to prevent them from governing. It requires managers to exercise due care in decision making and due process in exerting their authority and clarifies authority and responsibility by establishing a chain of accountability: staff to management, management to the chief executive officer and the chief executive officer to the board. The board, including the chief executive officer, is accountable, as a body and as individuals, to the full array of stakeholders.
In this report accountability is a key theme which permeates much of the discussion on governance, strategic management, workplace reform and financial and asset management. Recommendations relating to accountability are contained in these later chapters. In this chapter, a brief overview is presented of the changing accountability framework for universities and the views on accountability put to the Review Committee in submissions and during consultations.
Stringent and transparent accountability of all of Australia's publicly funded institutions, and their directors and executive officers, has been increasingly emphasised during the last twenty years. As the Australian public and governments increasingly seek outcomes that contribute to national goals for expenditure of the public purse, a high level of accountability is seen as the essential counter-balance to the authority to administer public funds.
Forces on universities to enhance their accountability have come from external and internal sources.
Externally, institutional accountability has been shaped in the light of :
During consultations and in most submissions, the importance of external accountability was highlighted. On the degree of external accountability required, there was general agreement on the need for a balance between legitimate taxpayer interests and sufficient autonomy to maintain academic integrity and independence. Some universities accepted increased accountability requirements over the last decade, considering that incentives to optimise funding have replaced control mechanisms. However, some also commented on excessive provider control and accountability requirements, suggesting that central regulation of higher education is antithetical to quality.
A number of university managers commented that external accountability requirements were beneficial for management, not least because they encouraged responsiveness to student and employer needs and raised awareness of equity and access issues. However, some managers also noted the need for congruence in internal and external accountability requirements to provide a focus for management, claiming that external and internal requirements are often at variance and that current requirements have little connection with measures of institutional effectiveness.
Internally, institutions have needed to develop more transparent and accountable systems of resource allocation and stronger mechanisms for accountability as management responsibilities are delegated within the university. Professional accountability has long been accepted in research through publication and peer review. Attention is now turning increasingly to accountability for teaching and service.
Comments provided through the submission and the consultation process indicated a culture of evaluation and review within universities, and yet a weak chain of accountability between the executive and university governing bodies. The ultimate responsibility of the governing body for accountability is discussed in the chapter on Governance.
A number of comments related to transparency in financial reporting and, in particular, some opaqueness surrounding the operation of private entities within public institutions. These matters are discussed under Financial and Asset Management.
The very nature of the university enterprise, involving as it does theoretical education, professional training, the discovery and dissemination of new knowledge, critical reflection on society and contributing to the community and to the national economy, presents special challenges in accounting for outcomes. In particular, such a wide-ranging charter implies a similarly wide ranging group of stakeholders, all of whom should figure in the accountability framework of a university. Another challenge relates to the measurement of performance, not least because quantitative measures are not always possible or appropriate. Furthermore, the complexity of the university mission can include conflicting and imprecise objectives. Performance measurement is discussed in more detail under Strategic Management. Also discussed under Strategic Management is the importance of integrating strategic planning and reporting in providing a suitable framework for accountability.
Universities in Australia are established as self-governing institutions under State Government legislation, or Commonwealth Government in the case of the Australian National University and the University of Canberra (which will soon pass to the ACT Government).
As noted earlier in this report, under the Constitution, education is a State Government responsibility. However, the Commonwealth has responsibility for financial assistance to students and now is responsible for the vast bulk of public sector funding of the higher education sector. Since 1993, and following the establishment of the Unified National System, direct payment of Commonwealth grants to higher education institutions has replaced the former States Grants funding arrangements.
The 1988 White Paper set out the Commonwealth's understanding of the respective roles and responsibilities of the Commonwealth and the States in higher education. These responsibilities may be summarised as follows:
This division of responsibilities was endorsed by the 1991 Commonwealth/State Agreement and remains in place today.
In submissions to the Review Committee and during consultations, a number of universities pointed to the potential for difficulties arising from the separation of responsibility for funding with responsibility for legislation. However, there was a widespread view that arrangements can work effectively as long as Commonwealth/State consultative mechanisms are in place to promote a co-ordinated approach by government.
As noted earlier in this report, Commonwealth/State Joint Planning Committees were established to facilitate consultation between the two levels of government on planning issues. The White Paper stated that:
'State and Commonwealth co-operation in developing a plan for higher education in each State will assist in setting clear directions for institutions and enhance their capacity to respond to community needs.'
To date, work on State-based strategic plans has been limited. In addition, most States no longer have a dedicated organisation to facilitate consultative arrangements with universities.
In the recent past, Joint Planning Committees have tended to focus largely on student load and for some States have not canvassed broader strategic issues. During consultations, representatives of the Western Australian Government sought a stronger consultative role as a joint partner with the Commonwealth.
In conducting the Review, the Review Committee was mindful of the roles and responsibilities of State governments. In examining university governance, strategic management and reporting, the Review Committee identified a number of issues relevant to these roles and responsibilities, particularly in relation to governance, where it recommends some legislation changes. These matters are taken up in the chapters that follow.
The issue of governance has become prominent because of poor business practice and performance in the corporate sector and commercialisation of public sector enterprises. The issues relating to the appropriate structure, membership, roles and responsibilities of governing bodies have not been entirely resolved in either the corporate sector or in public sector enterprises. The Review Committee recognises the important differences between higher education institutions and other public and private sector enterprises. It understands that a single solution will not be directly translatable to universities, nor will a single model be appropriate for all universities.
The Review Committee believes that governance is of primary importance in the proper and effective functioning of universities. Higher education institutions need to be able to operate as autonomous bodies, providing high quality teaching and research services consistent with the needs of students, employers, industry, the local community and government. In addition, publicly funded higher education institutions must be able to satisfy the community at large that they are operating effectively. Proper governance structures and appropriate governing body membership should assist institutions to operate effectively and meet their distinctive accountability requirements while maintaining autonomy and protecting and enhancing academic freedom of staff.
The Committee considered a number of aspects of governance including: the role of the governing body (called the Council or Senate); the role of the Chancellor and Vice-Chancellor; the size and composition of the governing body; the relationship between the governing body, the academic board or senate and the Vice-Chancellor. The Committee also examined the ability of governing bodies to make statutes and the role of the University Visitor.
The issue of governance and the role of governing bodies in universities is also being considered by the South Australian Government and by higher education systems in other countries:
Higher education institutions are passing through major change occasioned by social policy opening tertiary education to the full spectrum of society. It appears, however, that governance at many institutions has not yet developed to a point where it is truly contemporary. Effective governance is a matter which needs to be reconsidered in the light of the current and developing environment for higher education. Universities can probably no longer rely on their traditional governance forms if they are to operate fully effectively.
The Review Committee believes that the governing body has three primary roles in the university: external accountability; strategic planning oversight; and performance monitoring.
While universities are independent and autonomous bodies, as public institutions they have explicit contracts with society and are accountable for the funds which are provided to them and for the activities which they undertake. Institutions are also accountable to stakeholders including the Commonwealth and State/Territory governments, staff, students and the local community. As the peak governing body for universities, the Council or Senate should have ultimate responsibility for external accountability. Accountability seeks to ensure that funds are spent for the purpose for which they are allocated. It also seeks to ensure value for money by focusing on effectiveness (attainment of intended results) and efficiency (highest level of outputs or required quality and quantity of outputs for minimum inputs).
The governing body should have strategic planning oversight for the university. It should set the broad strategic framework within which the Vice-Chancellor and senior university administrators can operate. It is important that the governing body does not get caught up in a 'local response syndrome' but should confine itself to strategic and policy issues. Similarly, the governing body is not equipped to determine matters of academic policy or of academic standards. These aspects come under the responsibility of the peak academic authority.
The governing body should also be responsible for the overall review and performance monitoring of the operations of the university, relying on the advice of the academic board or senate for monitoring academic standards and performance. This should be seen as an integral part of the strategic planning and accountability responsibilities of the governing body. The governing body should monitor the performance of the institution against key objectives and this should form the basis of reports for accountability purposes to external and internal stakeholders.
In addition to these primary responsibilities, the governing body should:
The Committee found that operational effectiveness of governance arrangements varied significantly between universities, with only a limited number of governing bodies operating effectively. The ability of governing bodies to fulfil their roles and responsibilities depends on the charter of the body, the talents of the individuals who are members of it and the quality of information made available to members.
There is no doubt that governing bodies at several institutions have become more effective over recent years through structural and procedural changes and changes in membership. These bodies have responded positively to external pressures, particularly competition and quality.
Thirty-four of the 36 higher education institutions in the UNS are established under State or Territory legislation and two, the Australian National University and the University of Canberra are established under Commonwealth legislation. The enabling legislation for all universities includes provisions for the size, structure, membership and function of governing bodies. A description of the composition of university governing bodies at UNS institutions is at Table 1. (A detailed description of the structures for each institution is at Appendix 5.) Governing bodies consist of members appointed or elected from a diverse range of groups. Most universities have two or three State Parliamentarians on their governing bodies, as well as up to 11 appointments by the Governor-in-Council or by the relevant State/Territory Minister. In some cases the skills or attributes for external appointees are prescribed in the enabling legislation.
The Review Committee identified a number of positive aspects of the current arrangements. In particular:
TABLE 1
| Membership of University Councils | ||||||||||||
Chancellor (a) |
Academic (b) |
Gov't appointed (c) |
Parliament-arian |
Staff and Student |
Other appointed (d) |
Co-opted (e) |
Total | |||||
| University of Melbourne | 1 | 5 | 5 | 3 | 12 | 12 | 2 | 40 | ||||
| Monash University | 1 | 1 | 9 | 3 | 15 | 4 | 6 | 39 | ||||
| University of Queensland | 1 | 2 | 9 | 2 | 7 | 13 | 2 | 36 | ||||
| James Cook Uni of NQ | 1 | 2 | 11 | 0 | 10 | 8 | 3 | 35 | ||||
| La Trobe University | 1 | 2 | 6 | 3 | 8 | 15 | 0 | 35 | ||||
| University of Adelaide | 1 | 1 | 0 | 5 | 15 | 13 | 0 | 35 | ||||
| Flinders University | 3 | 3 | 3 | 5 | 14 | 4 | 3 | 34 | ||||
| Royal Mlb Inst of Tech | 1 | 1 | 9 | 3 | 9 | 2 | 9 | 34 | ||||
| Swinburne Uni of Tech | 1 | 1 | 7 | 3 | 9 | 0 | 9 | 30 | ||||
| Australian Catholic Uni | 2 | 1 | 0 | 0 | 10 | 16 | 0 | 29 | ||||
| Uni of Western Australia | 1 | 1 | 6 | 0 | 7 | 7 | 4 | 26 | ||||
| Uni of Western Sydney | 1 | 1 | 12 | 2 | 5 | 5 | 0 | 26 | ||||
| Deakin University | 1 | 2 | 4 | 3 | 9 | 6 | 0 | 25 | ||||
| Griffith University | 1 | 1 | 6 | 0 | 9 | 6 | 2 | 25 | ||||
| Murdoch University | 1 | 1 | 8 | 0 | 8 | 4 | 3 | 25 | ||||
| University of South Aust. | 1 | 2 | 6 | 2 | 9 | 2 | 2 | 24 | ||||
| University of Tasmania | 1 | 2 | 4 | 2 | 9 | 6 | 0 | 24 | ||||
| Victoria Uni of Tech | 1 | 2 | 6 | 3 | 7 | 1 | 4 | 24 | ||||
| University of Ballarat | 1 | 2 | 6 | 3 | 6 | 1 | 5 | 23 | ||||
| Australian National Uni | 2 | 3 | 6 | 2 | 6 | 2 | 1 | 22 | ||||
| Canberra University | 1 | 1 | 9 | 0 | 6 | 3 | 2 | 22 | ||||
| Central Qld University | 1 | 2 | 8 | 0 | 6 | 3 | 2 | 22 | ||||
| Qld University of Tech | 1 | 1 | 8 | 0 | 7 | 3 | 2 | 22 | ||||
| University of Sydney | 1 | 2 | 4 | 2 | 7 | 5 | 1 | 22 | ||||
| Edith Cowan University | 1 | 1 | 7 | 0 | 5 | 4 | 3 | 21 | ||||
| Northern Territory Uni | 1 | 2 | 11 | 0 | 5 | 2 | 0 | 21 | ||||
| Uni of New South Wales | 1 | 2 | 4 | 2 | 7 | 4 | 1 | 21 | ||||
| Uni of Tech, Sydney | 1 | 2 | 6 | 2 | 5 | 4 | 1 | 21 | ||||
| Uni of Southern Qld | 1 | 1 | 8 | 0 | 6 | 3 | 2 | 21 | ||||
| Charles Sturt University | 1 | 5 | 8 | 2 | 4 | 0 | 0 | 20 | ||||
| Curtin Uni of Tech | 1 | 1 | 6 | 0 | 5 | 4 | 3 | 20 | ||||
| Macquarie University | 1 | 2 | 4 | 2 | 5 | 4 | 1 | 19 | ||||
| Uni of New England | 1 | 2 | 6 | 2 | 5 | 2 | 1 | 19 | ||||
| Southern Cross University | 1 | 2 | 8 | 2 | 4 | 0 | 1 | 18 | ||||
| University of Newcastle | 1 | 2 | 4 | 2 | 4 | 4 | 1 | 18 | ||||
| University of Wollongong | 1 | 2 | 4 | 2 | 4 | 4 | 1 | 18 | ||||
| Full details can be found in Attachment 4. | ||||||||||||
| Footnotes | ||||||||||||
| (a) Includes Pro-Chancellor at some institutions. | ||||||||||||
| (b) Includes Vice-Chancellor, Deputy Vice-Chancellor, Chair of Academic Board etc. | ||||||||||||
| (c) Appointed by Governor or Minister. | ||||||||||||
| (d) Appointed by Minister or governing body or elected by convocation or graduates and ex officio. | ||||||||||||
| (e) Maximum number of co-opted members. | ||||||||||||
Of primary concern to the Review Committee is the perceived lack of focus on corporate and strategic issues by governing bodies. At some institutions governing bodies appear simply to confirm decisions by the administration and adopt a passive and reactive role. Thus, there is a risk that the wider issues will not be considered. The role that governing bodies play in the development of the strategic plan is limited in some institutions to a quick perusal, perfunctory discussion and approval. It also appears that many governing bodies spend significant time in meetings discussing issues often with a minor operational focus (like parking on campus).
The enabling acts for institutions contain various descriptions of the role of the governing body. In general, they include provisions to the effect that the governing body has responsibility for the entire management of the university and that it should act in all matters in the way it thinks will best promote the interests of the university. The enabling legislation does not describe the roles or responsibilities of the members of the governing body, other than for the Chancellor and Vice-Chancellor, which, in cases where they are provided, are described only in very general terms.
In some cases, particular members of governing bodies do not appear to have a proper understanding of their roles and responsibilities. This may be particularly true in the case of staff and students who are elected to the governing body. Many do not appear to have a strategic (whole-of-organisation) focus on issues discussed by the governing body. In some cases members with a vested interest are able to use governing body meetings as a court of appeal after having lost a decision in another forum.
It is important that members of the governing body are elected or appointed on the basis of their ability to contribute. The Review Committee was informed in consultations and in submissions that attendance at governing body meetings from some appointed members is very low. Analysis of attendance at meetings at eleven universities shows that, overall, members attended around only 80 per cent of possible meetings. Attendance at meetings at one institution was as low as 63 per cent overall, while at one meeting, only 42 per cent of members were in attendance. Attendance by governing body members who are also parliamentarians was particularly poor - parliamentarians attended only 70 per cent of possible meetings at institutions in capital cities, and attended only half of the possible meetings in regional institutions. Attendance at meetings by external appointments was generally lower than for senior administrators or members elected or appointed by staff or students.
With the exception of the Australian Catholic University and the University of Adelaide, all governing bodies have several external members appointed by the State or Territory Education Minister or the Governor (the Governor-General in the case of Australian National University and University of Canberra) (see Table 1). The principles and practices for appointment vary between institutions, with some appointments being made after consultation with the university or on the nomination of the Minister. The Committee was informed that in some cases there are problems and delays with the appointment procedures for external appointments made by the Governor or Minister. During the consultations some Chancellors and Vice-Chancellors complained that political appointments had replaced individuals recommended by the institution. In some cases there are lengthy delays before appointments are made.
Most governing bodies have a number of members appointed or elected from the convocation (or the alumni in a few cases). A number of concerns were raised about the role of convocation members on governing bodies during consultations and in submissions. The Council of the University of Adelaide has 24 of its 35 members elected by the convocation (8 academic staff, 2 ancillary staff, 1 postgraduate student and 13 others not in the employ of the University). The University of Melbourne has 10 members elected from the alumni as part of a governing body of 39. The Review Committee is concerned about the attendance of convocation members and the inclusion of current staff on the electoral role for the convocation. The Review Committee considers that the convocation has a legitimate stakeholder role in the university and so, where it is appropriate to the needs of a particular university, the convocation should elect or appoint members to the governing body. There is a strong argument for not including staff on the electoral role of the convocation because academic and general staff already elect or appoint staff directly to the governing body.
During the consultations the Review Committee was informed that meetings of governing bodies at institutions are sometimes dominated by members from within the university. This occurs as a result of the structure and the attendance patterns of members. Where meetings are dominated by internal members, there is potential for the external members to be marginalised and they are therefore less likely to participate. It is also likely that the focus of meetings where internal members outnumber external members will focus on day-to-day management issues rather than on strategic issues.
It appears that some governing bodies do not contain an appropriate mix of skills and knowledge for them to be able to operate effectively. The Review Committee found that in other cases this appeared to be due to the appointment processes, and in some cases it appeared to be due to inadequate training for the governing body. It was also noted during consultation that some regional institutions had difficulty getting appropriate people to serve on committees requiring specialist skills (particularly in finance and legal matters) because of the relatively small population and the limited number of professionals in surrounding communities.
The governing bodies of universities range in size between 18 and 40 members (see Table 1). Bodies of this size are relatively large in comparison with the governing bodies of organisations in the private sector and elsewhere in the public sector. The size of the governing body has the potential to make meetings unmanageable. The Review Committee believes that it would be difficult for all members to participate in groups of much over, say 20, particularly if a more strategic and pro-active role were to be adopted.
The New South Wales Government undertook a review of governance at higher education institutions following the White Paper and rationalised the size of most bodies to between 18 (at University of Wollongong, University of Newcastle and Southern Cross University) and 26 (University of Western Sydney). The Review Committee notes, however, that amongst institutions in other States there are still nine institutions with governing bodies with 30 or more members.
The role of the Chancellor, as described in the enabling legislation for many universities, is limited to presiding over meetings of governing bodies as Chair. There is no doubt that the effectiveness of the governing body depends to a large degree on the effectiveness of the Chancellor.
The enabling legislation for many universities describes the Vice-Chancellor as the principal executive officer and confers or imposes functions on them. Vice-Chancellors are running large, complex organisations and are often faced with management and administrative tasks that would test the best managers in the private sector. All current Vice-Chancellors are academics who have become managers, with varying degrees of success. The Review Committee considered whether the Vice-Chancellor necessarily needed to be an academic, but came to no firm conclusion on this issue. In some institutions the Governor-in-Council needs to approve appointments of Vice-Chancellors and Deputy Vice-Chancellors. The Review Committee believes that this requirement is not appropriate for an independent and autonomous institution.
The Review Committee found indications that some relationships between Vice-Chancellors and governing bodies are not entirely satisfactory. There appear to be cases where Vice-Chancellors do not raise important issues at governing body meetings because, for example, of concerns members would not keep issues confidential. On the other hand, there is an obvious problem at some institutions where governing bodies become overly involved with day-to-day management issues that are more appropriately dealt with by the executive.
The enabling legislation for most universities requires approval or assent by the relevant Governor-in-Council for changes to by-laws and statutes approved by the university governing body. In addition, the enabling legislation for other institutions requires that after assent or approval by the Governor, statutes, rules and by-laws need to be laid before Houses of Parliament for between 14 and 28 sitting days. During that period the relevant Parliament may resolve to revoke the statute in whole or in part. As the external members of the governing bodies are appointed by government, this additional requirement for assent or approval is not appropriate and can introduce delays.
Most universities in Victoria, Western Australia, South Australia and Tasmania have
preserved the traditional concept of the University Visitor and have appointed the
Governor as Visitor of their respective universities. At most institutions in New South
Wales the position of Visitor was modified or abandoned in 1994. There is evidence of
jurisdictional ambiguities and uncertainties about the role of Visitor. The Review
Committee was informed that practical concerns have been voiced by Visitors. The
traditional functions of the Visitor in appeal, intervention and ceremony have been eroded
at many institutions but replacement systems do not appear to be entirely effective. The
Review Committee was presented with arguments for building up the role of the Visitor and
also with arguments that the Visitor should be disbanded and that an alternative
'ombuds'-type role should be developed.
The 1988 White Paper noted the importance of governing bodies in higher education institutions in providing an essential element of public accountability. It argued that broadly representative governing bodies '... operate most effectively where their roles and responsibilities are clearly defined in relation to those of senior management, and where managers are held clearly accountable for their actions'. The Review Committee believes that this framework is still appropriate for Australian universities.
The Review Committee does not believe that it can prescribe one single model for governing bodies of Australian universities. Institutions have distinct missions and have developed distinct organisational structures. They are best placed to determine an appropriate structure and composition for their governing bodies. However, the Review Committee recognises that changes to the structure of governing bodies will require changes to the enabling legislation by State, Territory and Commonwealth governments. The Committee is recommending that the legislative issues should be taken up in appropriate Commonwealth/State fora. Institutions should also be discussing these issues with their respective governments as their needs may not be congruent with the needs of other institutions in their State/Territory.
The Review Committee proposes that members of governing bodies take increased responsibility for the accountability, management and administration of the institution. These enhanced responsibilities are likely to lead to increased public scrutiny of the probity of members of governing bodies. There are four elements of probity that need to be clarified for governing body members: disclosure of interests; fiduciary responsibility; liability; and indemnity.
It is important that the relevant legislation for governing bodies include a requirement that members disclose the nature of any direct or indirect interest (pecuniary or other) in matters being considered or about to be considered at a meeting of the governing body. The enabling legislation for some universities already requires members of governing bodies to declare interest in matters being considered by the body. The member should not be present during discussions and/or take part in the making of the decision relating to the matter, unless the governing body determines otherwise.
The principle that members of governing bodies should have fiduciary responsibility for the institution is consistent with public sector and private sector reforms where directors and board members are liable to pay compensation or damages under certain circumstances. The Review Committee believes that clarifying fiduciary responsibility will motivate members to become more closely involved in the work of the governing body and will increase the effectiveness of the governing body.
The Commonwealth Authorities and Companies Bill, 1994, provides for directors of Commonwealth authorities to disclose interests and to have fiduciary responsibility for the authority. These aspects of the Bill could provide a model that could be adapted for higher education institutions and included in enabling legislation (see Appendix 6). Enabling legislation should include provisions relating to:
Existing enabling legislation at some institutions already includes provisions relating to liability of governing body members and other university officers. For example, the Macquarie University Act, 1989 includes the following section:
'No matter or thing done by:
(a) the University, the Council or a member of the Council, or
(b) any person acting under the direction of the University or the Council,
if the matter or thing was done in good faith for the purpose of executing this or any other Act, subjects a member of the Council or a person so acting personally to any action, liability, claim or demand.' (Schedule 1, Section 5)
The Review Committee believes that any provisions limiting the liability of governing body members should be amended to ensure that, in addition to acting 'in good faith', governing body members and executive officers should 'exercise the same degree of care and diligence that a reasonable person in a like position' would exercise.
Members of governing bodies are responsible to the university and should act in the interests of the university regardless of the way that they were appointed. This trustee role, as opposed to representation of specific groups was emphasised in the 1988 White Paper. The concept of a governing body consisting of members appointed or elected from various stakeholder groups (that is: staff, students, industry, government and community) is integral to the operation of governing bodies and central to the collegial tradition of universities.
The Review Committee believes that it is important to maintain membership on governing bodies which is drawn from stakeholder groups. However, to strengthen the focus of members on their roles and responsibilities may require a different structure and may mean that some current members of governing bodies will no longer have 'a seat at the table'. The Review Committee assessed other mechanisms that could be used to ensure that the views of stakeholders can be considered without direct representation. For example, some universities overseas have advisory groups consisting of staff, student and community representatives that consider issues and make recommendations to a board of directors, but are not involved in the final decision making. The Review Committee believes that having an effective mechanism for input by all stakeholders is an important responsibility of governing bodies. This could be through committees, advisory groups or consultative arrangements.
An appropriate balance between internal and external members is particularly important to the proper functioning of governing bodies. The majority of governing body members should be external to the university. This will bring a proper balance of external perspectives to bear on the strategic directions of the institution and will allow for checking against internal perspectives. It is particularly important that external members who are appointed to the governing body are motivated and able to participate fully to ensure that internal members are not in the majority when decisions are taken. The Review Committee also notes that some external members can have strong internal links and may act in a similar fashion to internal appointments in certain circumstances.
Most external members should be appointed by the Government, after consultation with the University, with some coopted by the governing body. It may also be appropriate for some of the external members to be elected or appointed by the alumni (excluding current staff). Staff and students should elect or appoint members to the governing body.
The Committee came to the conclusion that many governing bodies would operate more effectively if parliamentarians were not a prescribed membership category. This will require the enabling legislation for most institutions to be amended. However, this should not preclude any parliamentarians with a strong interest in the institution from being appointed or coopted as one of the external members of the governing body. In cases where a State/Territory decides that it wants to retain parliamentarians, and there is to be more than one parliamentary member, opposition members should be considered as well as government members.
The governing body should contain members with an appropriate mix of skills and knowledge to ensure that it can operate effectively. The skills likely to be required include business, management, accounting, finance, law, information technology and education. In addition, the governing body may need to include members with specialist knowledge about the local region or in areas such as international trade or government liaison. A number of institutions, although they are mainly located in one State, enrol many students from other States and the governing body may consider it appropriate to include a member from another region.
Members appointed by the Minister or government should be appointed on the basis of their skills or knowledge and interest and ability to participate as an active member of the body. The governing body should also be in a position to coopt members to cover any other areas. All external members should be independent. The Review Committee felt that it was particularly important to appoint members with specialist finance skills in business or accounting to assist the governing body meet its accountability commitments.
Governing bodies of universities should have an appropriate gender mix and include, at any given time, a mixture of relatively recently appointed members and members who have served for some time. It is important that there are new members as they are likely to introduce new ideas and should reflect changing directions for the university. However, this needs to be balanced by members who have corporate memory. There should be the opportunity to reappoint external members who have made significant contribution during their term, but only for a limited number of terms. Terms of three to four years are probably usually appropriate for external members.
The appointment process for external members of governing bodies needs to be improved. In most cases these appointments are made by the relevant State or Territory Minister or Governor (the Governor-General in the case of the University of Canberra and the Australian National University). It is appropriate that most of these appointments are made by the relevant Minister/Governor. However, the university should participate in the selection process. This could involve a two part process:
Such a process should ensure that independent persons with the appropriate skills and attributes are appointed to the governing body. It is also important that these appointments are made in a timely fashion.
The processes and procedures involved in appointing or electing members to governing bodies are complex and time consuming in a number of cases. To ensure that the governing body can continue to function effectively while waiting for appointments to be made or elections to be held, the governing body should be able to fill vacancies on a temporary basis by appointment.
The Review Committee identified review and evaluation as an important role of the governing body as part of its accountability responsibilities to internal and external stakeholders. This will assist stakeholders to judge the performance of the governing body as a whole and of the members that they appointed or elected. The governing bodies and their constituent committees should review their role and performance and report on progress against strategic directions for the period under review. The Council at the University of New South Wales is one university that has already introduced a process of self-evaluation by a survey (see inset). Institutions should also publish the attendance of members at meetings of the governing body. This already occurs in a number of institutions in New South Wales.
The Review Committee believes that there is a pressing need to improve the effectiveness of governing bodies by a process of ongoing development. This will need to include improved induction and training processes for members of governing bodies at most universities and should cover the proper use of information and position. In particular, members need to understand the relationship between their representational and corporate goals. A number of institutions informed the Review Committee that they had induction and training courses in place for their members, but the Committee was not in a position to judge the relative merits of any particular program.
Council Performance Survey for the University of New South Wales, 1995
Members were asked to rate the performance of the Council in the following areas:
While recognising that the quality of the membership is more important than the size of the governing body, the Review Committee believes that most governing bodies are far too large to be able to operate effectively. The election or appointment of members from a number of stakeholder groups is essential for the collegial tradition of the governing body. If the balance between internal and external members is appropriate, there seems little point in having several elected members from the same stakeholder group. The governing body should be able to ensure that the ideas and views for a wide range of stakeholder groups are considered by the body by using, for example, advisory groups. These advisory groups could discuss issues under consideration by the governing body, but could not participate in the decision making.
The Review Committee concluded that all institutions should carefully examine the size of their current governing bodies with a view to rationalising them. The 1986 CTEC Review concluded that '(i)n most circumstances a body of 20 or so members can provide an adequate representation of groups associated with the institution and community interests.' The 1988 White Paper concluded that governing bodies should have between 10 and 15 members. The Review Committee agrees with the White Paper recommendation. Governing bodies with more than 20 are likely to be unmanageable, particularly given the increased strategic focus that the bodies should have.
The Chancellor needs to play an advisory role and assist the Vice-Chancellor, as well as playing a pastoral role for the university as a whole. The Review Committee believes that the Chancellor should act in a non-executive fashion. The Chancellor should be selected by members of the governing body rather than appointed by the government.
Governing bodies should be able to select Vice-Chancellors and Deputy Vice-Chancellors without requiring external approval. If the governing body is to have ultimate accountability responsibility for the institution and members have fiduciary responsibility, then the governing body should be able to appoint the key executive officers without requiring approval of external agencies.
The Review Committee believes that the governing body of each university should also be undertaking regular formal reviews of the performance of the Vice-Chancellor. This recommendation is consistent with the performance appraisal recommendations contained in the chapter on workplace reform. Performance needs to be measured against an agreed set of objectives that should be consistent with the strategic and operational plans of the institution. This process should develop a 'contract' between the Vice-Chancellor and the governing body by which the governing body can properly assess the performance of the Vice-Chancellor.
The Vice-Chancellor should provide the governing body with regular, formal reports on the operations of the university. These reports should primarily be focused on progress against the agreed set of objectives by which the Vice-Chancellor will be assessed. The reports should also include any significant developments occurring in the institution. This will assist the governing body to assess the performance of the Vice-Chancellor, and will also assist the governing body to fulfil its accountability role.
The Review Committee did not have sufficient time to examine peak academic bodies within institutions as closely as it examined governing bodies. While academic bodies were formerly dominated by the professoriate, it appears that most have been broadened to include a range of interested groups. The Review Committee believes that to function properly, universities need to have an independent and vigorous academic authority. This academic body should monitor academic policy and standards as well as protecting academic freedom of individual staff members. There should also be appropriate links between the academic body and the governing body. This could be achieved by including, ex officio, the presiding member of the academic body on the governing body. In institutions where the Vice-Chancellor is the presiding member of the academic body, another senior member of the academic body could be made a member of the governing body.
The Review Committee notes that much of the work of governing bodies is undertaken by committees in most universities. These committees may meet more frequently than the governing body, involve a wider range of members and can focus on specific aspects of the governing body's functions. However, care must be taken to ensure that the committee does not undermine the effective operation of the governing body in discharging its responsibilities. Many of these committees can include members who are not members of the governing body. This is appropriate and should assist the institution to ensure that the correct mix of skills and knowledge is available on these committees. In particular, financial skills may be needed and the committees should be seen as an important place where staff members can be involved. This committee work should be seen as an integral part of the responsibilities of members of the governing body and members should be encouraged to participate on them. Committees should also be seen as appropriate training opportunities for potential members of the governing body.
A number of institutions have recently reviewed or are currently undertaking reviews of the committees associated with their governing body and this should be an ongoing process. The Review Committee was concerned that some institutions appear to have a large number of standing committees with wide ranging terms of reference that are impeding the effective operation of the institution. This is particularly the case where individuals may debate the same issue two or three times at different stages of the process. The Review Committee also concluded that governing bodies may operate more effectively if task forces with sunset clauses were established to achieve certain outcomes rather than having a large number of ongoing committees.
The Review Committee believes that broader channels of communication should be developed between the governing body and stakeholders. Members may need to initiate more direct, unfiltered interactions with staff, students, alumni, businesses and the community. This will give members the opportunity to listen and assess independently the health of the institution and the quality of the relationships between the administrator and key stakeholder groups.
There are a number of operational matters which universities should consider to assist governing bodies to operate fully effectively, including:
The Review Committee considered the issue of remuneration for governing body members. There are some arguments in support of remuneration for members - if the governing body is to have a more strategic focus and have fiduciary responsibility for the university, remuneration may be appropriate. Payment would probably not be a major motivator for individuals whose primary interest is the advancement of the institution. Some concerns were also expressed by some universities about their ability to pay members. The Review Committee did not come to a final conclusion on the issue of remuneration.
The requirement for Governor approval of ordinances, statutes, by-laws and rules made by the governing body needs to be re-examined. The Review Committee believes that the governing bodies of institutions will be strengthened by the recommendations of this report. There should be no need for external approval of statutes, by-laws and rules by the State/Territory Government if the governing body is operating effectively. Statutes and rules that have been agreed by the governing body should continue to be published in consolidated form at least once in each calender year and be widely available. It is also probably still appropriate for statutes and by-laws to continue to be tabled in Houses of Parliament.
Consideration needs to be given to the role of the Visitor and grievance procedures within institutions. The Review Committee has not been able to examine the issue of the Visitor in sufficient detail to enable it to come to a recommendation about the continuance or replacement of the Visitor. It is recommended that some further work be undertaken to determine the appropriateness of current arrangements.
The need for legislative changes to the size, structure and responsibilities of the governing body are discussed earlier in this chapter. The Review Committee has developed a series of recommendations for appropriate Commonwealth/State fora that relate to the required legislative changes. States and Territories will probably need to amend the enabling legislation for individual universities and this should occur after discussion with the institution.
Recommendations
1. The governing body of higher education institutions should have ultimate responsibility for strategic direction and development of the university and external and internal accountability, including monitoring and review of institutional strategic performance. It should also ensure that:
a. accountability for implementation is appropriately delegated;
b. there is an appropriate academic body to monitor academic policy and standards and protect academic freedom;
c. there are adequate and effective separate fora available to determine stakeholders' opinions, particularly for those of staff and students; and
d. it reports on progress against strategic directions.
2. The role of the Vice-Chancellor should be to exercise stewardship of the institution on behalf of the governing body, and he or she should be formally accountable to the governing body for performance according to an agreed set of objectives, arrangements and criteria.
3. Governing bodies should, on a regular basis, review their own role and performance, and that of the Vice-Chancellor.
4. The Minister for Employment, Education and Training, through appropriate Commonwealth and State/Territory bodies, should recommend that States amend university enabling legislation, where appropriate, so that:
a. the primary responsibilities and roles of governing bodies and their members are explicit;
b. members elected or appointed to the governing body have fiduciary responsibility and must disclose interests in matters under consideration;
c. the size of the governing body is typically between 10 to 15 members;
d. the governing body is able to co-opt members;
e. external independent members outnumber internal members;
f. the governing body can fill vacancies by appointment on a temporary basis until elections can be held or external appointments are made; and
g. the governing body can make ordinances, statutes, by-laws and rules without requiring government approval.
5. Changing the focus and structure of the governing body will require greater attention to the nature of appointments and membership:
a. members of governing bodies should be chosen on the basis of their demonstrated ability and preparedness to contribute and the required mix of skills and attributes for the body, taking into account considerations such as gender equity;
b. potential external members should be identified through an independent professional process;
c. a proportion of members should be replaced regularly and appointments to the body should be made on a three or four year rolling basis with a usual maximum of, say, no more than two or three terms;
d. the governing body should ensure that its members and potential members can meet all their responsibilities effectively by having:
- clear guidelines on the roles and responsibilities of members;
- proper induction; and
- continuing skilling and development; and
e. in relation to government appointments:
- the institution should provide a short-list of names for discussion with the Minister/Governor, and
- the Minister/Governor should ensure appointments are timely.
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This page was last updated on 10 July 1996
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