With new national standards on the horizon, universities face a once-in-a-generation opportunity to modernise governance.
Australia’s universities occupy a unique institutional space. Created through their own founding legislation, they exist outside the Corporations Act or any other set of commonly applicable rules.
The Tertiary Education Quality Standards Agency (TEQSA) enforces the Provider Standards, which prescribe the characteristics of a university, but these are only scrutinised when a university seeks to apply for, or renew, its accreditation (usually once every 5-7 years). In the interim, they are subject to a mishmash of regulatory, legislative and general law requirements, only some specific to universities.
ECUG reforms to bring clarity and consistency
The recommendations of the Expert Council on University Governance (ECUG) will change this. For the first time, all universities will be subject to a common set of expectations of how they run themselves and how they manage their accountability to stakeholders. The recommendations will either supplement the existing provisions of university enabling legislation or extend them.
The proposals will bring much needed clarity and consistency to an area best described as ‘patchy’. The Council heard significant evidence that, while some universities work hard at improving their governance arrangements, others lag. Those in the former category will have little to be alarmed about from this report.
TESQA’s new reporting expectations
The Minister has confirmed his intention to implement the ECUG recommendations, and the ECUG Principles will be incorporated into the Provider Standards enforced by TEQSA. However, unlike other Standards, universities will be expected to report against them to TEQSA annually on an ‘if not, why not’ basis – and TEQSA will be given enhanced powers (and resources) to secure compliance.
It is unclear when this reporting requirement will commence, not least because changes may be required to university enabling acts, which will require the cooperation of State education ministers. State Ministers will also be involved in consultation on what a Skills Matrix for their universities should look like. However, given that the State Ministers have endorsed the report, it would be wise for Chancellors and Councils to start preparing for them now.
Five ‘no regrets moves’ universities can make now
As governance reform approaches, there are practical steps universities can take immediately to prepare.
1. Strengthen Council composition
If a Council does not already have at least one external member with leadership experience in the higher education sector, then start looking for them now – they are likely to be in very high demand as councils seek to meet the ECUG recommendations relating to Council composition; and there is a finite supply.
2. Listen beyond the table
A major theme of the ECUG report is that staff and student reps on Council cannot be expected to speak for all staff and all students. Councils must ensure there are other effective avenues for obtaining staff and student feedback – and not just feedback on major issues, such as a new strategic plan. It would be worthwhile undertaking a stocktake of current feedback (and complaints) mechanisms to identify where gaps exist and improvements can be made.
3. Elevate people and culture
If a Council does not already have a People and Culture Committee, it should think about creating one. Compliance with obligations to a university workforce (e.g., on remuneration), and monitoring of the university’s culture more generally, will be an important part of a Council’s obligations. Executive remuneration will also be under the spotlight.
4. Lead on transparency
Councils will be expected to communicate more openly with internal and external stakeholders about the composition of Council and its Committees, and about the decisions it makes. There is nothing to stop a university Council from being more transparent now, and it would be wise to start thinking about how transparency can be increased. Council papers could also be presented more concisely and comprehensibly – 700 to 900 pages of Council papers is not conducive to transparency and ease of understanding of the issues.
5. Greater transparency in consulting reporting
The Ministerial press release accompanying the release of the ECUG report stated that universities will be required to report details of annual consultancy expenditure. While this was not part of ECUG’s recommendations, it is a welcome move.
The generic label ‘consultants’ currently covers everything from IT contractors to international recruitment commissions, as well as consulting firms, even though some of these are essentially part of a university’s BAU operations. Greater transparency will bring much-needed evidence to ongoing debates around the value consultants (of all kinds) bring to the sector.
Conclusion
Ultimately these reforms are about trust and transparency. For some institutions, meeting the new standards will require significant cultural and compliance change, but those that act early will shape what good governance looks like for the sector’s future.
