The ABC of university governance: an evaluation

Aug 21, 2023
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What is the ABC of university governance? Public universities are uniquely orientated as research and innovation and teaching and learning institutions and, unmistakably, are fundamentally concerned with academic governance. Therefore, the ABC of university governance comprises three key dimensions: Academic (A) governance; Business (B) governance, and Corporate (C) governance. These dimensions, respectively, focus on scholarship, performance and conformance.

The raison d’etre for the advent, ongoing existence and success of public universities is to engage in and to stimulate scholarship. Therefore, academic governance relates to governing scholarship. This notion can be broadly understood as pertaining to academic study or achievement and learning at a high level to enable people on Planet Earth to organise and chart their lives based on common understandings and endeavours to close the gap on ever-lasting knowledge voids. Irrespective of how scholarship is perceived or defined, it should never be underestimated or downplayed in public universities.

Attempting to apply narrow-scope commercial approaches to governance in public universities constitutes poor institutional governance and runs the risk of creating institutions which may be unable to effectively achieve their broad social objectives. Public universities are uniquely orientated as research and innovation and teaching and learning institutions and are, first and foremost, vitally concerned with academic governance under the ABC of university governance.

Two major influential factors, however, have contributed to a key concern about university governance. Firstly, by the end of 2019 prior to COVID-19, Australian public universities, in general, reached a state of high, if not excessive, reliance on the income from fee-paying onshore overseas students. Secondly, the country’s public universities have generally developed a passion, if not an obsession, for Global University Rankings (GUR) particularly during the past 10-15 years.

The compulsive, intensive and risk enhancing performance measurement approaches, developed by agencies for universities, which are entertained and endorsed by University Councils and Senior Executives, involves endless competition among public universities and the often-aggressive pursuit of moving upwards, never downwards, though any number of different competitive GUR schemas.

Both influential factors have led to greater appetites for risk enhancement in connection with university business governance. Elucidation of the adverse impacts upon risk and concerns for risk management follows.

A financial performance ratio which was given little, if any, serious attention before COVID-19 emerged was in the form of the ratio of “total income from fee-paying onshore overseas students as a proportion of total income from continuing operations” for each financial year. Recent research conducted in Australia by the writer and others under COVID-19 pandemic conditions depict an increased appetite for financial risk taking by Australian public universities, without adequate or effective disclosure of the increased risks being taken on to a diversity of stakeholders.

One study involved an analysis of the published annual reports of all eight public universities in the State of Victoria Public universities and impacts of COVID-19 in Australia: risk disclosures and organisational change | Emerald Insight] to identify the disclosure of COVID-19 risk impacts. These universities were found to rely heavily on the income streams of fee-paying onshore overseas students. The study illuminated the Victorian sector’s aggressive growth strategy and showed the financial risk disclosures about income from this source were sparse, with any risk associated with COVID-19 being disclosed on a minimal basis.

In a broader, Australia-wide study of public universities the often-heavy risks absorbed by public universities relating to this income stream were portrayed, confirming that the sector confronted significant financial and social risks because of its progressively developed over-reliance on income from fee-paying onshore overseas students.

On writing, it is generally understood that the numbers of fee-paying onshore overseas students are increasing again, but not to the same levels of pre-COVID enrolments, especially pertaining to students from China. On the other hand, it seems that most Australian public universities are broadly adopting the “business as usual” approach, under the so-called “business-model” deployed.

This curiously portends that our public universities, generally, may not have heeded the lessons of COVID-19, as a global crisis, among other forms of crisis that would cause the same or similar disruptions to operations, which are unable to be discounted as incapable of reaping the same or even worse impacts.

Moving to address the second trend across the same time is the emergence of the transformative power of GURs, stimulating an organisational, self-interested corporate culture and dysfunctional behaviours, not witnessed previously, across Australian higher education at least. The warning signs are not hidden.

This changed orientation of Australian public universities has been identified as the “micro-measurement”, metrics-driven approach to university management. This contrasts sharply with the “macro-contributions” approach to university management. Under the macro-contributions approach, our public universities have traditionally adopted and emphasised formal aspirations, in the form of crafted mission and vision statements, to expressly act in the public interest and to serve and advance society, communities, people and nature.

The Quacquarelli Symonds (QS) ranking scheme seems to be broadly regarded as important across the sector in Australia and is in popular use. QS uses, for instance, an “International student ratio” as a criterion in its ranking regime as well as an “International faculty ratio”. Both these metrics contribute five (5) per cent of the overall total. In other words, a strategy of perpetual growth of international students and associated income streams, as experienced in the lead-up to COVID-19, is indeed openly rewarded for ranking purposes by QS. At the same time, strategies aimed at progressively increasing income from fee-paying onshore overseas students elevate financial risk and impact adversely on effective business governance.

The sector’s aggressive growth strategy can jeopardise financial viability and the quality of research and teaching. Moreover, the capability of GUR to result in the attribution of little more than superficial attention to the vital overarching missions and visions if public universities is not the epitome of “conformance” under corporate governance.

The accountability of New Public Management (NPM) is questioned, especially as the privileging of “organisational good” diverts institutional interest and attention away from “public good”. The public purposes of universities are being glossed over and even hidden by an over-abundance of micro measurement and related pursuits along with the often-connected grandstanding with copious marketing initiatives deployed at considerable expense for each institution’s competitive advantage. Indeed, an appetite for aggressive financial risk taking – fanned by GUR – is unsuitable for longstanding public good institutions with social purposes.

Of utmost importance, however, is for our public universities to actively work co-operatively and collaboratively together, in the public interest, especially by prioritising the most pressing and challenging issues facing humans and non-humans alike in Australia and beyond. An organisational self-interest, corporate culture and associated dysfunctional behaviours is far from this pertinent sector-wide vision.

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