The Australian Government will implement a new set of University Governance Principles to strengthen accountability, transparency and public trust in Australian universities.
The Principles respond to serious concerns about the standards of university governance. They will be written into Commonwealth regulation through the Threshold Standards.
Universities will be required to report annually on compliance with the Principles on an 'if not, why not' basis to the Tertiary Education Quality and Standards Agency (TEQSA).
The Principles were drafted by the Expert Council on University Governance, which included Chair Melinda Cilento, Sharan Burrow AC and Bruce Cowley.
The Australian Government, in collaboration with the Commonwealth Remuneration Tribunal, states and territories, and stakeholders including the Universities Chancellors Council, will establish a remuneration framework for Vice-Chancellor remuneration.
University governing bodies will also be required to publish:
- outcomes of meetings and decisions taken,
- consultancy spending, its purpose, value and justification,
- Vice-Chancellors' external roles,
- annual remuneration reports in line with requirements for public companies, and
- composition of governing bodies.
Skills matrices of universities will be reviewed to ensure they include members with higher education sector expertise and student and staff voices.
Australian universities receive over $22 billion in public funding each year and play a central role in Australia's civic, economic and social life through education and research.
With this public investment and their public role, universities should exhibit high standards of governance but too many are falling short.
These Principles establish a clear governance framework for universities, similar to the ASX Corporate Governance Principles for listed companies.
The Principles set strong expectations across eight key themes:
- Accountability: Governance structures and accountabilities are well-defined, effective and transparent.
- Diversity of perspectives: Composition of the governing body enables purpose and performance.
- Independence: Academic standards and freedom are respected and protected.
- Transparency: Purpose, strategy and performance are clear and openly communicated.
- Trustworthy: The university operates lawfully, ethically, responsibly, and consistent with its public purpose.
- Inclusive and responsive: Expectations of the university's community and stakeholders are understood, respected and responded to.
- Sustainable: Risks are understood and managed effectively.
- Responsible: Workforce and remuneration are structured fairly and responsibly.
TEQSA will be able to take compliance action against universities that repeatedly fail to meet the Principles.
Quotes attributable to Minister for Education Jason Clare:
"If you don't think there are challenges in university governance, you've been living under a rock.
"These are important reforms that help make sure our universities meet the standards their students, staff and whole communities expect."
Quotes attributable to Expert Council on University Governance Chair Melinda Cilento:
"I strongly support the Principles and the 'if not, why not' approach to their implementation as the best way to sustainably uplift governance given the diversity of the sector and the rapidly evolving environment in which universities operate.
"I hope that universities and their leadership genuinely, proactively and transparently adopt the Principles, communicate their priorities and outline how they are proposing to respond to the issues raised through our work.
"Greater transparency and reporting, coupled with open and positive stakeholder engagement should accelerate support for and confidence in the Principles and contribute positively to university governance.
"I think this is important not just for the effectiveness of the Principles but more broadly in terms of improving trust in the sector and its leadership.
"I would encourage all stakeholders to use the Principles as the basis to address and advance governance issues important to them."
