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MEETING THE CHALLENGES: THE GOVERNANCE AND
MANAGEMENT OF UNIVERSITIES SUMMARY
Many of these issues are the preserve of universities themselves
and/or State/Territory governments. The Commonwealth is not
suggesting, in discussing these issues, a more intrusive role in
matters rightly the responsibility of universities and/or
State/Territory governments. There are, however, areas where a more
cooperative approach to tackling issues may be beneficial.
The Commonwealth’s interest derives from the critically
important role universities play in the economic, social and
cultural development of the nation and from the perspective of the
efficient and effective use of, and accountability for, the
significant level of Commonwealth funds provided to the sector.
Legal and accountability frameworks
- The legislative and accountability frameworks for Australian
universities are unusual because State/Territory governments
generally have responsibility for the enabling legislation for
each university but the Commonwealth has responsibility for the
public funding of those institutions.
- The legislative framework in a State/Territory regulates the
powers of universities to undertake commercial activities.
- Changes have been made to some university enabling Acts
concerning their capacity to engage in commercial activities.
However, significant differences remain between the States and
Territories, including in relation to universities’
accountability for commercial activities.
- One important consequence of the variation in State and
Territory accountability and regulatory frameworks is that not
all universities can respond to, and capitalise on, commercial
opportunities with equal ease and in timelines appropriate to
the commercial world.
- Total Commonwealth funding, including student contributions,
made up 63.2 per cent of university operating revenue in 2000.
It is entirely appropriate that universities be regulated and
monitored to ensure public accountability for their
publicly-funded educational mission.
- Universities are required under the Higher Education
Funding Act 1988 (HEFA) to give the Minister annually a
financial statement in respect of the previous calendar year,
together with a report on the statement by a qualified auditor.
- The Commonwealth’s financial requirements are a particular
point of contention with universities, primarily because of
conflicts with State/Territory requirements.
- The Commonwealth accepts that there is a need to keep
regulatory burdens and accountability requirements to a minimum,
consistent with ensuring accountability appropriate to the
current policy environment.
- Some universities have already expressed concern about the
potential additional workload created by the newly established
Australian Universities Quality Agency.
- Several submissions to the Review propose the establishment of
an intermediary body to either play a role in the regulatory
environment or to perform part of the accountability framework.
In considering such an initiative care would need to be taken
not to increase the amount of red tape faced by universities.
- The extent to which the Commonwealth Government can reduce its
reporting requirements is to some extent influenced by the
confidence it has in the governance of universities.
A number of possible options have been raised in relation to the
issues covered in this chapter. While not an exhaustive list, these
questions have been included for consideration and discussion:
- Should the Commonwealth discuss with relevant State/Territory
governments the benefits of giving universities greater freedom
in commercial activities?
- Should there be a coordinated government approach to greater
harmonisation of legislation and accountability frameworks,
possibly through the Ministerial Council for Employment,
Education, Training and Youth Affairs (MCEETYA)?
- Should the Commonwealth explore with State/Territory
governments options to enable the Commonwealth to satisfy some
of its accountability requirements through the States and
Territories?
- Should the Commonwealth rationalise the information it
requires of universities by focussing on the outputs/outcomes of
its expenditure?
- Should the Commonwealth establish an intermediary agency and,
if so, what functions should it have? Should it administer
programmes, provide advice to governments, be a statistical
agency and/or play a role in public accountability across all
jurisdictions?
University governing bodies
- Good governance is critical to the effectiveness of
universities and to the contribution they can make to Australia’s
economic and social development. The Commonwealth Government and
the community therefore have a strong interest in ensuring that
universities are well governed.
- Many State/Territory governments, in co-operation with
universities, have made changes to the operations of university
governing boards, however there remains substantial scope for
improvement.
- There does appear to be merit in both Commonwealth and
State/Territory governments continuing to work with university
governing bodies to ensure all parties have a clear
understanding and common set of expectations about the
contemporary roles of governing bodies and what is required for
governing bodies to carry out these roles effectively.
- Government encouragement for university governing bodies to
review their own performance and practices may be a simple and
unobtrusive means of clarifying the role of governing bodies.
- A key issue for university governance is whether governing
body members act as trustees or delegates. In general terms,
trustees are regarded as obliged to always act in the overall
interests of the university, whereas delegates may regard
themselves as primarily representatives of the groups who have
elected them.
- Some submissions to the Review argue for the duties of the
members of governing bodies to be legally codified.
- A significant number of establishing Acts do not contain any
conflict of interest provisions for members of the governing
bodies of universities. It may be desirable to amend enabling
Acts to ensure that the need to avoid conflicts of interest has
a high profile.
- There are currently few formal mechanisms to ensure that the
duties of members of governing bodies are enforced.
- Remuneration might be seen as an essential complement to
increasing specification of the duties of members of governing
boards, with potential sanctions.
- The size of the university governing body has been identified
as an important factor in effective governance. Previous reviews
have argued for governing bodies of between 10 and 15 members.
The current average size of governing bodies is well above these
levels at 21 members.
- Only New South Wales and the Commonwealth continue to have
dedicated appointments of Members of Parliament to university
governing bodies.
- One of the most important considerations for those charged
with making appointments to university governing bodies is the
capabilities that those bodies require and the attributes needed
to be an effective member of such a body.
- Some submissions have proposed that university governing
bodies be reviewed with the aim of promoting skills based
appointments, rather than representational appointments.
Governing bodies could be given the flexibility to make
appointments to ensure that, as a whole, they have the balance
of capability, experience and business acumen that
Vice-Chancellors need to draw upon in managing a large
organisation.
A number of possible options have been raised in relation to the
issues covered in this chapter. While not an exhaustive list, these
questions have been included for consideration and discussion:
- Should university enabling Acts be amended to:
- clarify the role of the governing body?
- clarify the duties of members of governing bodies?
- reduce further the size of governing bodies?
- clarify conflict of interest provisions for members?
- remove provisions for Parliamentary, Ministerial and
Governor in council appointments?
- Should consideration be given to the remuneration of governing
board members?
- Should the Commonwealth work with State/Territory governments
and the university sector to develop a good practice manual for
university governance that might include:
- good practice models in respect of the size and structure
of the governing body?
- information on the duties and responsibilities of
governing body members?
- information on the skills and attributes for effective
governing body membership?
University management issues
- There is a strong interest in the efficiency and effectiveness
of universities not just because of the significant amount of
Commonwealth funding made available to universities, but also
because of the fundamental role universities play in shaping the
nation.
- Submissions to this Review indicate that there are divergent
views in relation to the current state of efficiency and
effectiveness of universities. The major areas for efficiency
improvement identified in submissions require greater
flexibility in workplace relations or more cooperation across
institutions, especially across the higher education and
vocational education and training (VET) sectors.
- Both the public and governments expect that higher education
institutions will make cost effective use of the resources
provided to them. It is not easy, however, to determine the
efficiency of university operations in any absolute sense,
relative to other institutions or even to measure changes in
efficiency over time.
- Notwithstanding the challenges, university efficiency and
effectiveness needs to be monitored.
- Some submissions suggest that a national focus on the
development of management capacity may be warranted.
- Universities argue that cost savings from outsourcing and
collaboration with other institutions need to be weighed against
matters of institutional control and quality. They support
continued efforts to increase efficiency and effectiveness but
tend not to support blanket prescriptions.
- Some submissions argue for the Commonwealth to consider the
provision of incentives for, or assistance with, major cost
saving/revenue raising initiatives.
A number of possible options have been raised in relation to the
issues covered in this chapter. While not an exhaustive list, these
questions have been included for consideration and discussion:
- What is the best approach for the Commonwealth to support
continuous management improvement within the higher education
sector?
- Should the Commonwealth be involved in developing and
supporting strategies to promote university management capacity?
- Should the Commonwealth look at options to facilitate greater
sharing and rationalisation of infrastructure between
universities?
Workplace relations
- Workplace relations are of major importance to the higher
education sector. Around 60 per cent of university operating
expenses, on average, are for salaries and salary related
expenses. In some cases, the percentage is much higher.
- Significant changes to the workplace relations arrangements
for academic and general staff occurred in the late 1980s and
there have since been three completed rounds of enterprise
bargaining.
- The Higher Education Contract of Employment (HECE) Award 1998
was made in May 1998 and brought universities’ use of fixed
term employment into a more regulated framework and, as a
result, numerous fixed term employees were converted to ongoing
appointments.
- The Government attempted, during the third round of
negotiations, to foster arrangements which reflected the needs
of individual institutions, to promote direct relations between
universities and their staff and to improve management and
administrative efficiency. In 1999, it announced the
establishment of the Workplace Reform Programme (WRP), which was
implemented from 1 January 2000.
- WRP has not been evaluated and its overall impact in
encouraging genuine reform in the sector is not clear.
- Many submissions to the Review support the view that despite
three rounds of enterprise bargaining negotiations, there is
still a need for greater flexibility than has been achieved to
date. However, some submissions argue that significant workplace
reforms can be achieved under current arrangements.
- In 2001, there were 83,800 academic and non-academic staff at
university. Some 26,000 are members of the major union.
- There are significant differences between and within
universities and some submissions argue that these should be
reflected in different agreements. The inability of universities
to tailor agreements to the unique operating environments of
each institution has undermined the achievement of improvements
in efficiency and productivity.
- Several submissions to the Review argue strongly against
pattern bargaining.
- The Commonwealth Government has no wish to determine how
universities undertake agreement-making. The primary purpose of
the Workplace Relations Act 1996 is to provide
organisations with a range of options, from collective to
individual agreements, from agreements made directly with staff
to those negotiated through unions.
- A number of submissions argue for legislative change to assist
universities in industrial bargaining.
- Critics of enterprise bargaining in the sector believe that
bargaining has not been wholly productive because it has been
prolonged and has brought with it antagonism and discord.
- Various universities are engaged in workforce planning, though
it is not known how widespread or effectively it is carried out.
It is, however, very important as there are some significant
workforce planning issues confronting universities. These
include the increasing need for senior university managers to
have strong management skills.
- The ageing profile of staff in the industry is an area that
requires careful consideration. There have not generally been
difficulties in retaining older academic staff given their
continuing interest in their academic fields and the lack of a
compulsory retirement age. The development needs of junior
academic staff are, however, particularly important for the
future academic workforce of universities.
- Workforce planning can also help ensure that staff workloads
remain reasonable. While an NTEU survey conducted in late 2000
indicated that 61% of academic staff and 74% of general staff
were satisfied with their job, there is also evidence of
psychological strain. Many report being time pressured, having
conflicts between work and home commitments and excessive
workloads. This was particularly so for academic staff who
sighted industrial relations pressures and the pressure to
attract external research funding as some of the key factors
driving workplace stress.
- It is clear from submissions that flexibility in universities’
employment profiles is one of the most important preconditions
for them to achieve greater flexibility and efficiency. This
issue is raised by more universities than any other workplace
issue.
- There are several dimensions to universities’ need for
greater flexibility in their staffing profiles. Many submissions
argue for greater flexibility in the ratios of ongoing,
fixed-term contract and casual employment types.
- Universities are concerned that the outcome of the case on
casual employment currently before the Australian Industrial
Relations Commission (AIRC) may significantly further reduce
their staffing flexibility.
- Many submissions argue for awards and enterprise agreements to
be less prescriptive about academic and general staff roles.
- Current industrial arrangements do not adequately reflect the
blurring of academic and general staff roles which has been
occurring. In some cases recognition of these employment types
could result in better conditions for employees and maintain
important elements of university flexibility.
- Universities also often employ young ‘aspiring’ academics
purely to teach. Maintaining opportunities for aspiring
academics to develop their teaching skills is important given
the ageing of the academic workforce.
- Other employment practices that could be considered include
the engagement of academic staff for the full time academic year
(that is, for around 9 months), a practice common in the United
States (US). US academics employed on this basis are able to
conduct research, teach for an additional summer semester, take
annual leave or undertake consultancy work for the remaining
months of the year.
- Most university enterprise agreements contain detailed
procedures that commit to union involvement in a range of
ongoing workplace management issues, including change processes
and outsourcing, which require consultation and communication
with unions prior to management decision-making. Redundancy
provisions still tend to be long and drawn out.
- Several submissions to this Review, argue for greater emphasis
on staff performance.
- Bargaining at the faculty level may provide institutions with
more flexibility to remunerate academics on the basis of
performance.
A number of possible options have been raised in relation to the
issues covered in this chapter. While not an exhaustive list, these
questions have been included for consideration and discussion:
- How can universities and the Commonwealth work together to
foster the achievement of significant workplace reform?
- How can universities improve their performance-based
management and reward high achievers? Is there anything the
Commonwealth can do to facilitate this?
- What options should be explored to enable universities to
reward high achieving staff?
- Should Certified Agreements and/or awards be used to create
'new' employment types within universities? If so, how can this
be facilitated?
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