Magazine article New Zealand Management

Tertiary Sector Governance: Will a Private Sector Model Work?

Magazine article New Zealand Management

Tertiary Sector Governance: Will a Private Sector Model Work?

Article excerpt

Plans to beef up governance in tertiary education institutions have run into some flak. What are the issues and how do they differ from those in the private sector?

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If you want to find a really grunty argument about what constitutes good governance, take a look at the tertiary education sector.

Private enterprise objections to the spectre of more regulatory governance controls are expressed just as forcefully by our universities and for similar reasons. But there's also the argument that tertiary education institution (TEI) governance is fundamentally different to that of the private sector and should not, therefore, be subject to the same governance models.

Overlaying that is the pervasive presence of a sizeable shareholder/stakeholder called government and understanding what its level of influence might be; the diversity of the institutions themselves and concerns that compliance costs involved in tightening up their governance systems will detract from the institutions' primary teaching and research activities.

A review of TEI governance was commissioned last year as part of an overall exercise to beef up the governance framework for Crown Entities. It came up with 48 recommendations (see box summary) designed to enhance what it described as practices that were "not seriously flawed" but could do with some improvements.

Review author Meredith Edwards, director of the National Institute for Governance, University of Canberra, suggested that both those within the TEIs and the key stakeholders had difficulty understanding the overall purpose of governance structure and processes. "I believe that some TEI Councils in New Zealand have a tendency to pay too much attention to conformance and the ticking of boxes rather than to lifting institutional performance through following good practice and developing effective relationships," she wrote.

"In some cases, the links between governance cultures and institutional strategic positioning appear to be tenuous. In addition, there appears to be considerable room for improvement in aligning with Government's identified strategic priorities and engaging relevant stakeholders."

Concerns included the "unclear relationship of TEIs to Government, particular in terms of the tension between autonomy and accountability", the presence of "overpowering chief executives usually alongside under-performing chairs or councils", lack of balanced relations between CEOs, council and academic boards, and over-prescriptive regulation.

The review's recommended changes met with a mixed reception from the sector. At least one university described most of them as "unnecessary, unjustifiable, potentially costly and inappropriate".

One of the issues, and it's one that is shared with the private sector, involves identifying the extent to which governance practice should be enshrined in law.

Edwards says that while the recommendations include legislative changes, the emphasis is on what institutions can do themselves--including proposals to ensure better practice is shared across the sector.

But some commentators believe the review includes too much legislation--about one quarter of its recommendations involve law changes. In its submission to the review process, the University of Auckland Council says that, bar one proposed change, there is "no demonstrable need for further legislation as recommended in the Review--particularly as much of it replicates present legislative provisions" (in the Education Act).

And then there is the contentious point of whether the review takes sufficient account of the diversity of New Zealand's tertiary sector. While its executive summary eschews a "one-size-fits-all" approach and notes that "at its heart, good governance is about strong relationships and shared understanding", the University of Auckland Senate accuses it of rejecting homogeneity in theory but recommending it in practice. …

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