Towards Open and Ethical University Governance

NTEU discussion paper

August 2017

1. Overview

This discussion paper has been prepared to support the implementation of the 2016 National Council1 motion, Accountability of University Councils, which asked for “a report on the varying practices of universities and the impact upon the quality of university governance and their obligations under the university Acts, as well as to the broader community.”

The discussion paper outlines the experiences of NTEU staff members on university council/governing bodies, the current extent of external and private sector representation on these bodies, and the character of legislative reform undertaken in Australia since 1988.

The discussion paper demonstrates that systematic ‘reform’, over recent decades, has sought to reduce elected staff and student representation on university governing bodies. These measures are fundamental not only to the concentration of governance decision-making in the university executive but to the removal of openness, transparency and accountability in university decision-making and operations.

As part of an array of measures necessary to reverse this trend, the NTEU has developed a draft NTEU Code of Open and Ethical University Governance. Its purpose is to articulate a clear set of principles that protect the distinctive character of Australian universities as public institutions.

2. Staff experiences of University Councils/Governing Bodies

In September 2016, the NTEU settled a Federal Court case at the University of New England, where Professor Margaret Sims was accused in February 2015 of having a standing conflict of interest by holding both union and council positions.2 Professor Sims was already the staff- elected representative on council when elected the NTEU Branch President. Significantly, she was re-elected as staff representative on council while the dispute was in progress. While the joint statement released on 30 September 2016 settled that there was no apparent conflict of interest in holding both positions, the case highlighted the extent of secrecy and lack of transparency currently on university councils.

Concerns were reinforced by responses collected through an evaluation survey circulated on 21 September 2016 for an NTEU workshop for university council members who were also NTEU members.3 The survey attracted 22 responses (61% of attendees). Responses from the survey highlighted the following key concerns about governance arrangements at the relevant institution:

 that lack of transparency and accountability in governance protocols was common;

1 NTEU National Council, https://www.nteu.org.au/myunion/about_us/national_council 2 Andrew MacDonald (2017) “Union claims win in conflict of interest case at University of New England”, http://www.nteu.org.au/article/Union-claims-win-in-conflict-of-interest-case-at-University-of-New-England-19070 3 Jeannie Rea (2016) “Union members on university councils,” Advocate, Vol.23, No.3, 22. 1

 that ‘conflict of interest’ assumptions limit legitimate questions made by elected staff seeking to address issues of poor governance;  that most council leaders exert pressure on individual members to conform to council decisions;  that staff often feel isolated and there is benefit in building networks amongst union aligned council members;  that there is a role for legal and procedural skills in holding management to account during council meetings; and  that university council meetings present a unique opportunity to present the best interests of the university from a staff perspective, although in numerous instances this opportunity is only just being recognised by NTEU members.

Lack of transparency in Council procedures

Specific responses to the evaluation survey reinforced the prevalence of secrecy and lack of transparency in university council meetings and processes:

 75% said either the council agenda, papers or minutes were not entirely available to staff members. In a few instances, the agenda itself was not available. In other instances, minutes were redacted or presented as summaries, and sometimes took long periods before they became public.  37% said Council meetings were not open to observers. When observers were allowed, this was generally at the discretion of the Chancellor and they would be excluded for confidential matters. In some instances, only invited presentations or staff at specific levels were able to observe meeting proceedings.  61% stated they could not report on council business to staff. There was significant variation across responses in relation to what could not be reported on. In most instances, commercial-in-confidence or highly sensitive matters could not be reported. In some instances, restricted subject matter extended well beyond commercial-in- confidence matters.  38% said they were encouraged to communicate with other council members outside of council meetings. The majority of comments reflected that NTEU members were neither encouraged nor discouraged, however, a handful outlined they were discouraged from engaging with other council members, either by the assignment of a mentor or through the direct intervention of the Chancellor.  94% received an induction, although 76% said they did not receive training on meeting procedure. Some reported being intimidated by the Vice Chancellor or discouraged from meeting with other Councillors at induction. Some described their induction experience as limited to reading council papers and not about meeting procedure or analysing financial documents.  58% said they were encouraged to nominate for committees of council. Comments reinforced that there was a wide variety of responses in terms of committee participation, with staff participation common in some instances, and discouraged in others.

Following this survey, the NTEU consulted further with workshop participants and NTEU staff. These discussions highlighted that:

 At some universities the council agenda was divided into a ‘confidential’ and ‘non- confidential’ list of items. Important matters were concealed from broader scrutiny by simply being added to the confidential items;

2

 Union members were commonly discriminated against by not being allowed to join council committees or sub-committees where important assessments and decisions were made;  Minutes were not recorded for Committee and sub-committee meetings at some institutions and therefore were not properly accountable to the governing body, let alone the public;  Council members often do not have a publicly-listed email address and therefore are not accountable to any stakeholder, irrespective of whether they are staff, students, the local community or the wider public. This includes Minister-appointed (external) governing body members who often have no formal means of contact or correspondence with the wider public.

Feedback to the evaluation survey and other correspondence does not reflect governance practices at all Australian universities. But the existence of these practices in numerous places across the sector demonstrate the regulatory burden in relation to university governance is fragile and that non-transparent practices and committee cultures have demonstrably been able to flourish.

3. Changing role of University Councils/Governing Bodies

Governing body structures and practices are routinely influenced by binding legal instruments including their enabling legislation, Commonwealth funding legislation, State/Territory general legislation, corporations’ law, and other local factors that influence operations. For instance, universities are subject to legislation that empowers state and Federal audit bodies to make financial assessments of public institutions, as well as state legislation that regulates against improper conduct and corruption at universities. This includes the Crime and Corruption Commission in Qld (which found the UQ vice-chancellor culpable of corruption in 2013), 4 and the WA Crime and Corruption Commission (which found the Murdoch University chancellor responsible for improper conduct in 2016).5

Nonetheless, university governance has been subject to structural and economic changes larger than the traditional dichotomy between “internal estates and state level regulation”.6 A key role for university councils/governing bodies is to make decisions on increasingly complex internal and external dimensions of institutional governance. The 2013 Review of Higher Education Regulation report, which depicts modern university governing bodies as covering interlocking ‘regulatory forces’, extending from legislation to market incentives, and from local to global pressures. These include the student demand-driven system (DDS) for CSPs (Commonwealth-Supported Places), competitive grants, performance-based research funding, state-based, national and international quality assurance, along with market pressures such as the competition for international students and emerging online learning markets.7 The role of individual university councillors sit amidst forces which have effectively inserted “non-academic interests into the heart of education, adding layers of external

4 Crime and Corruption Commission (Qld) (2013) An examination of suspected official misconduct at the University of Queensland, http://www.ccc.qld.gov.au/research-and-publications/publications/misconduct/uq/an-examination-of- suspected-official-misconduct-at-the-university-of-queensland 5 WA Crime and Corruption Commission (2016) Report on a Matter of Governance at Murdoch University, https://www.ccc.wa.gov.au/sites/default/files/Report%20on%20a%20matter%20of%20governance%20at%20Murdoch %20University.pdf 6 Simon Marginson (2004) “Going Global: Governance Implications of Cross-Border Traffic in Higher Education.” William G. Tierney (ed.) Competing Conceptions of Academic Governance: Negotiating the Perfect Storm. John Hopkins University, Baltimore, p. 1. 7 Kwong Lee Dow and Valerie Braithwaite (2013) Review of Higher Education Regulation. Commonwealth of Australia, Canberra, p. 21. 3 complexity to institutions, and intensifying the stakes involved in devising new ways of handling them”.8

This view has represented a backdrop to reform of university governance in the last 25 years, which has predominantly been limited to strengthening corporate governance against more participatory forms of governance. For many policy makers and university managements this has led to an emphasis upon ‘efficiency’ in either council size or decision making, greater performance reporting, and the pursuit of market principles as a means for institutions to build institutional competitive advantage.9 The shift away from academic governance and the role of academic voices in corporate governance is international and not confined to the English- speaking tradition, as is evident in the views of Larseen, Maassen and Stensaker.10

Previous inquiries have demonstrated widespread concerns about the application of corporate governance practices to higher education. There are concerns that this threatens the fundamental mission of universities to promote scholarship, research, free inquiry and academic excellence. This is often set against the position that university governance reform reflects the need for universities to be more commercially focused.11 The debate, however, has avoided careful analysis of governance practices and in particular the idea that institutional decision-making represents “an active process of considering the best ways of arranging governance to promote the integrity of the institution and its members”.12

As there is no public evidence that demonstrates reducing council size enhances institutional performance, it is difficult to see the purpose of the legislative agenda, other than securing the interest of a small number of senior university administrators. There is in fact significant evidence that reduction in council size has either no effect, or has a negative effect.13

Considering the substantive National Innovation and Science Agenda (NISA) announcements that are changing university funding to encourage industry collaboration,14 there is a special need to ensure governance reforms protect if not enhance the ability of university governing bodies to maintain academic and research integrity, and protect academic freedom.

This discussion paper approaches current structures of institutional decision-making with a view to ensure the integrity of these institutions as statutory bodies that produce a mix of public and private outcomes. This task increasingly requires robust measures of transparency and accountability. Staff and students have a critical role in defending the university mission, ensuring probity around internal matters and monitoring whether governance bodies remain fit-for-purpose. The expertise and perspective brought by elected staff and students to university governance is fundamental to ensuring universities operate for the public good and in the public interest.15

8 Mary Burgan (2004) “Why Governance? Why Now?” William G. Tierney (ed.) Competing Conceptions of Academic Governance: Negotiating the Perfect Storm. John Hopkins University, Baltimore, p. vii. 9 Jeanette Baird (2015) “International, hierarchical and market influences on Australian University Governance”, Michael Shattock (ed) International Trends in University Governance: Autonomy, Self-government, and the distribution of authority, Routledge, London: 145-64. 10 See IM Larssen, P Maassen & B Stensaker (2009) “Four basic dilemmas in university governance”, Journal HE Management and Policy, 21/3. 11 General Purpose Standing Committee No. 2 (2009) Governance of NSW universities, NSW Parliament. 12 Craig McInnis (2006) Renewing the Place of Academic Expertise and Authority in the Reform of University Governance.” William G. Tierney (ed.) Governance and the Public Good. State University of New York Press, New York, 119. 13 Chitra De Silva Lokuwaduge and Anona Armstrong (2015) “The Impact of governance on the performance of the higher education sector in Australia,” Educational Management Administration and Leadership, Vol. 43, No. 5: 811-827. 14 National Innovation and Science Agenda (NISA), http://www.innovation.gov.au/ 15 Jeannie Rea (2016) Presentation to the 11th Annual University Governance & Regulations Forum, http://www.slideshare.net/informaoz/jeannie-reanteu 4

4. Council Composition and Representation

The size and composition of university councils varies across Australia, ranging from 10 to 22 members. The University Chancellors Council (UCC) report Legislative Changes Affecting the Governance of Australian Universities highlights that between 1990 and 2015, the average size of university councils has fallen from 26.5 to 16.6 persons.16

The maximum size limit is consistent with the Voluntary Code of Best Practice for the Governance of Australian Universities, which was endorsed by both Universities Australia and the University Chancellors Council (UCC) in 2010, and later by the Ministerial Council for Tertiary Education and Employment in 2011.17

The size and composition of governing bodies has also recently been shaped by state legislation, including recent amendments through the:

 Universities Governing Bodies Act 2011 (NSW)18  University of Tasmania Amendment Act 2012 (TAS)19  Education Legislation Amendment (Governance) Act 2012 (VIC)20  Education Legislation Amendment (TAFE and University Governance Reform) Act 2016 (VIC)21  Universities Legislation Amendment Act 2016 (WA)22

Proportion of staff and student representation is linked to Council size

The Dawkins reforms amalgamated universities, colleges and institutes of advanced education into the Unified National System. It also established a major shift in university governance to more corporatist positions, encouraging vice-chancellors to operate as CEOs and universities to operate in a more ‘business-like’ manner. Some of this scholarship claims that the falling size of councils has led to proportionately less staff, student and alumni representation.23

Appendix 1 provides a summary of the composition of Australian university councils as of July 2016, ranking institutions by the greatest proportion of staff, student and alumni representatives. It demonstrates there is a clear link between greater staff, student and alumni representation and large university governing bodies (note. While most staff, student and alumni representatives are elected, some universities exercise discretion to appoint rather than elect alumni, particularly in NSW). Institutions with more than 40 per cent of staff, student or alumni representatives had on average 20 members. Institutions with below 22 per cent staff, student or alumni representatives had on average 14.1 members. The institutions with

16 University Chancellors Council (UCC) (2016) Legislative Changes Affecting the Governance of Australian Universities, http://www.ucc.edu.au/wp-content/uploads/2016/09/Legislative-changes-affecting-University-Governance- 20161220.pdf 17 Universities Australia (2010) Voluntary Code of Best Practice for the Governance of Australian Universities, https://www.universitiesaustralia.edu.au/efficiency-and-governance/legislation-and-governance/University- Governance 18 http://www.austlii.edu.au/au/legis/nsw/consol_act/ugba2011329/ 19 http://www.austlii.edu.au/au/legis/tas/num_act/uotaa201244o2012388/index.html#s2 20 http://www.austlii.edu.au/au/legis/vic/num_act/elaa201273o2012436/ 21 http://www.austlii.edu.au/au/legis/vic/num_act/elaaugra201569o2015701/ 22 http://www.austlii.edu.au/au/legis/wa/num_act/ulaa201632o2016417/ 23 John Dawkins (1988) Higher Education: a policy statement, Commonwealth, Canberra, pp.101-4. See also Paul Rodan (2000) “Tensions unresolved: some current issues in university governance.“ Australian Universities Review. Vol.42, No.2: 72-77; Jeanette Baird (2006) “Beyond professionalisation: enhancing the governance culture for Australian university governing boards,” Tertiary Education and Management, Vol. 12, No. 4: 297–30; Julie Rowlands (2017) Academic Governance in the Contemporary University: Perspectives from Anglophone Nations, Springer Publishing, Singapore, 37. 5 the smallest number of council members were private universities, such as Bond University and the University of Notre Dame, which had no elected staff, student or alumni representatives on their university councils.

It is crucial to emphasise the absence of credible evidence that can demonstrate smaller university councils contribute to institutional effectiveness. The majority of studies about Australian universities focus on reforms around other performance measures including “soft” attributes of good governance, such as the culture within governing bodies.24 In addition, a recent study by Lokuwaduge and Armstrong asserts that, "Results showed that the size of the board did not relate to financial, research or teaching performance in any way".25 In fact, Lokuwadge claimed in his doctoral thesis, “The strong positive correlation between the council size and the progression rate implied that bigger councils tend to monitor and influence teaching performance, due to the diversified skills of council members”.26

Private sector interests on Council

Utilising a definition of ‘private sector’ that includes bankers, financial, corporate executives (including non-executive directors), Appendix 2 provides a summary of the composition of Australian university governing bodies as of June 2016, arranged on the basis of institutions with the greatest proportion of private sector representatives.27

The extent of private interests represented on university governing boards ranges widely, between 11.1 to 60 per cent. Universities with 50% or more private sector representation were Swinburne University (61.5%), Deakin University (60%), the University of Notre Dame (54.5%), Federation University (53.3%), Edith Cowan University (52.6%), Charles Sturt University (50%), Western Sydney University (50%) and Bond University (50%). Governing boards with the smallest proportion of private sector interests were the Australian Catholic University (11.1%), Charles Darwin University (13.3%), University of Canberra (13.3%), Australian National University (13.3%) and James Cook University (13.6%).

The predominance of private sector interests on university governing bodies is driven by the shift towards external appointments, either appointed by government or by the governing body itself. It is assumed that greater numbers of external members contributes to greater professional expertise and independence of the board, which improves effectiveness in governance and in turn contributes to performance.

This is not evident in existing research. As already cited, the recent study by Lokuwaduge and Armstrong also claimed that boards dominated by internal members could have a better influence on teaching and research performance.28 Undertaking a regression analysis on a select list of teaching and research performance variables, they claimed that independent

24 Meredith Edwards and Robyn Clough (2005) Corporate Governance and Performance: An Exploration of the Connection in a Public Sector Context, University of Canberra, Issues Series Paper, No.1, January 2005. 25 Chitra De Silva Lokuwaduge and Anona Armstrong (2015) “The Impact of governance on the performance of the higher education sector in Australia,” 821. 26 Chitra de Silva (2011) Governance and Performance: An Empirical Study of Australian Universities, PhD, Victoria University: 181. 27 The methodology for the analysis of private sector representation depended upon scrutiny of each university website and an analysis of company director registers. This analysis, compared to the UCC report, produced inconsistencies in the overall size of university councils for thirteen (13) institutions. On this basis, the data about private sector representation should be considered provisional, but nonetheless strongly indicative for the conclusions made in this report about over representation of private sector interests. 28 Chitra De Silva Lokuwaduge and Anona Armstrong (2015) “The Impact of governance on the performance of the higher education sector in Australia”: 821. 6 committees “do not possess the professional expertise in learning and teaching activities and that extreme monitoring adversely affects the teaching performance”.

Private sector in the Chancellorship

Utilising the same definition of ‘private sector’, Appendix 3 provides a summary of university chancellors whose professional backgrounds were from the private sector or who continued to have substantial non-executive roles with private companies as chancellors. They represented two thirds of all chancellors in 2016 (66%) and this is increasing. This figure of 66% also excludes chancellors who chaired or ran government corporations and statutory bodies.

Ex-officio members, such as the vice-chancellor and chancellor, with the support of those within the executive group (meaning pro-vice chancellors, deputy vice-chancellors and other senior administrators), have a disproportionate capacity to shape the nomination of governing members and the political temperament of their governing bodies. Even on the basis of government appointments, the framework is skewered towards reproducing the power of senior administrators such as the VC. Consider that since the Hoare report (1995) government appointments predominantly originate from a short list nominated by the governing body itself (Recommendation 57).

5. Reform to University Councils/Governing Bodies

The persistent intervention of Commonwealth and state governments through policy and legislative reform has had the most direct influence upon the composition and function of university governing bodies.

Appendix 4 summarises the major policy and legislative shifts in Australia from 1988 to 2017. These include:

 the Dawkins white paper (1988);29  Report of the Committee of Inquiry: Higher Education Management Review (Hoare Report) (1995);30  Balancing town and gown: report of South Australian Review of University Governance (1996);  Victorian Ministerial Committee of Advice on University Governance (Storey report) (1997);  the West Review (1998); 31  the Victorian Review of University Governance (Hamilton Report) (2002);32  the National Governance Protocols (NGP) (2004);33  the Higher Education Support Amendment (Removal of the Higher Education Workplace Relations Requirements and National Governance Protocols Requirements and Other Matters) Act 2008;34

29 John Dawkins (1988) Higher education: a policy statement, Department of Employment, Education and Training (DEET), http://www.voced.edu.au/content/ngv%3A9695 30 Higher Education management Review Committee (1995( Report of the Committee of Inquiry, http://www.voced.edu.au/content/ngv%3A8870 31 Roderick West (1998) Learning for life: review of higher education financing and policy: final report, Department of Employment, Education, Training and Youth Affairs (DEETYA), http://www.voced.edu.au/content/ngv%3A30787 32 Stuart Hamilton (2002) Review of University Governance Department of Education & Training, http://www.education.vic.gov.au/Documents/about/research/revunigovern.pdf 33 Brendan Nelson (2004) Our universities: backing Australia’s future, Department of Education, Science and Training (DEST), http://www.voced.edu.au/content/ngv%3A38781 34 https://www.legislation.gov.au/Details/C2008A00089 7

 the Governance of NSW Universities report (2009);35  the Voluntary Code of Best Practice for the Governance of Australian Universities (2010);36  Universities Governing Bodies Act 2011 (NSW);37  Education Legislation Amendment (Governance) Act 2012 (VIC);38  Education Legislation Amendment (TAFE and University Governance Reform) Act 2016 (VIC);39  University of Tasmania Amendment Act 2012 (TAS);40  Universities Legislation Amendment Act 2016 (WA);41  Statutes Amendment (Universities) Bill 2016 (SA);42  University Legislation Amendment Bill 2017 (QLD).43

State-based legislative reforms focused on cutting elected representation

Each of the legislative interventions since 2011, aside from the 2016 Victorian Act, have reduced elected representation on governing bodies. A summary of legislative prescriptions on the size and composition of governing bodies is provided below (Table 1):

Table 1: Prescribed legislative changes to governing body sizes 2011-2017

Official Appointed Academic Professional Students Alumni Total Universities Governing 3 2, up to 6 1 or more 1 or more 1 or more 1 or more 11 to 21 Bodies Act 2011 (NSW) Education Legislation Amendment 3 8 or more 0 0 0 0 11 to 21 (Governance) Act 2011 (VIC) University of Tasmania X 2, up to 6 1 1 1 X 10 to 14 Amendment Act 2012 Education Legislation Amendment (TAFE and X X 1 or more 1 or more X 13 to 21 University Governance) Act 2016 (VIC) Universities Legislation Amendment Act 2016 2 8 1 1 2 2 14 (WA) Statutes Amendment (Universities) Bill 2016 X 8 1 1 2 X 15 to 16 (SA) University Legislation Amendment Bill 2017 2 to 3 6 to 12 1 1 1 X 11 to 18 (QLD)

Sources. Various legislation and draft Bills

Compared to the preceding policy debate, the legislative agenda has concentrated on a very narrow set of themes. Appendix 5 provides a typology on the range of governance issues

35 General Purpose Standing Committee No. 2, Report on the governance of NSW universities, https://www.parliament.nsw.gov.au/committees/inquiries/Pages/inquiry-details.aspx?pk=1814 36 Universities Australia (2010) Voluntary Code of Best Practice for the Governance of Australian Universities, https://www.universitiesaustralia.edu.au/efficiency-and-governance/legislation-and-governance/University- Governance 37 http://www.austlii.edu.au/au/legis/nsw/consol_act/ugba2011329/ 38 http://www.austlii.edu.au/au/legis/vic/num_act/elaa201273o2012436/ 39 http://www.austlii.edu.au/au/legis/vic/num_act/elaaugra201569o2015701/ 40 http://www.austlii.edu.au/au/legis/tas/num_act/uotaa201244o2012388/index.html#s2 41 http://www.austlii.edu.au/au/legis/wa/num_act/ulaa201632o2016417/ 42 http://www.austlii.edu.au/au/legis/sa/bill/sab2016386/ 43 http://www.parliament.qld.gov.au/docs/find.aspx?id=5517T745 8 shaped by legislation and policy in Australia since 1988 until now. Legislative amendments since 2011 have included changes to the:

 size and composition of the governing body; and by implication,  staff and student engagement.

Some legislation has also variously dealt with:

 discretionary powers of the governing body;  selection criteria for external members;  external independent members compared to internal members;  appointment process for external members;  selection criteria for external members;  process for government nominations;  remuneration for university councillors;  provisions for the dismissal of a councillor or Chancellor.

However, in each instance this has not extended to amendments or improvements around any ‘soft’ attributes of good governance, including the definition of the substantive responsibilities of council members (except in one instance the responsibility of governing bodies to monitor the performance of the vice chancellor). Another exception is the recent Qld legislation which significantly derogates the responsibilities of university councils, while reducing staff and student representation at JCU and potentially every other Qld university (Appendix 5A).

This reform agenda—which sets autonomy against accountability—should be of concern to anyone seeking to protect open or ethical governance in higher education. This is of particular concern, considering that the policy debate at the state level and through Auditor-General reports, have returned time-and-time again to questions about controlled entities, the management of institutional risk and potential conflicts of interest.

It is also of concern because the reduction in staff and student numbers has not been supplemented by legislative arrangements that deepen public transparency. We would suggest that seeking to achieve good corporate governance in universities is a false analogy, because university governing body members are not accountable to shareholders, they rarely are contactable by the general public. Furthermore, legislative amendments do not require governing bodies to demonstrate basis how they perform in relation to academic or research integrity, or any other attributes unique to universities as public institutions.

6. Rights and risks

Based upon extensive feedback from NTEU members on university councils, the intervention by state and Commonwealth governments into university governance since the late 1980s has in no way curtailed troubling levels of secrecy and lack of public disclosure in the cultures and procedures of many university governing bodies. Serious breaches against the university through improper and corrupt conduct at the executive level continues to occur, for instance, with the resignation of the UQ Vice-Chancellor in 2013, and the Murdoch University Chancellor in 2016.44

44 Crime and Corruption Commission (Qld) (2013) An examination of suspected official misconduct at the University of Queensland, http://www.ccc.qld.gov.au/research-and-publications/publications/misconduct/uq/an-examination-of- suspected-official-misconduct-at-the-university-of-queensland WA Crime and Corruption Commission (2016) Report on a Matter of Governance at Murdoch University, 9

Considering these factors, it is incumbent upon the NTEU to ask:

 What are the underpinning aims of state intervention, other than embedding more managerialist structures of university governance and concentrating executive power? Have they been effective and when has this been measured?  Do these reforms protect the capacity of university governing bodies to undertake their diverse and complex roles in a transparent and accountable manner?  Does the focus on increasing external members at the expense of internal stakeholder representation undermine institutional capability on other important matters, such as research and teaching performance, academic quality assurance, or in relation to key reputational issues such as research integrity and academic freedom?  Does having greater proportion of external representatives positively shape the capacity of university governing bodies to manage institutional risk? How are private sector representatives equipped to ensure good governance of statutory corporations or universities as uniquely autonomous institutions? When has this been evaluated?  Is this reform approach fit-for-purpose, considering the challenges that face Australian higher education at present and in the future?

Longstanding international principles hold that higher education staff have a right and a professional responsibility to engage with the governance of their institution. The 1997 UNESCO Recommendation Concerning the Status of Higher Education Teaching Personnel states:

Higher education teaching personnel should have the right and opportunity, without discrimination of any kind, according to their abilities, to take part in the governing bodies and to criticise the functioning of higher education institutions, including their own, while respecting the right of other sections of the academic community to participate, and they should also have the right to elect a majority of representatives to academic bodies within the higher education institutions.45

In finding a different approach to the reform agenda around university governance, we can reinforce that external pressures ensure universities are growing, not narrowing in complexity. The increasing mixture of private and public leaves university managers in what Sharrock calls the “mixed economy of higher learning”.46

While regulatory forces that shape governance are diversifying, the core function and purpose of universities remains. This is the creation of educational goods and outcomes (focused around teaching, research and outreach) for public purposes and goals. Good performance in this respect fundamentally requires governance expertise in the lived experiences of learning, research, community service, and a commitment to the unique missions defined by universities as public and civic institutions. These are not only evident in strategic plans and in enabling legislation but in open, transparent and inclusive decision-making cultures.

Even in pure performance terms, some scholars consider that the reduction in council sizes and the preoccupation with managerial modes of governance may in fact limit capacity around quality of teaching and research. For instance, Julie Rowlands asserts that managerial modes of governance (which vest power in governing bodies and executive groups), limit the

https://www.ccc.wa.gov.au/sites/default/files/Report%20on%20a%20matter%20of%20governance%20at%20Murdoch %20University.pdf 45 1997 UNESCO Recommendation Concerning the Status of Higher Education Teaching Personnel, http://portal.unesco.org/en/ev.php-URL_ID=13144&URL_DO=DO_TOPIC&URL_SECTION=201.html 46 Geoff Sharrock (2012) “Four management agendas for Australian universities,” Journal of HE Policy and Management, Vol. 34, No. 3: 323-337. 10 emergence of more distributed, decentralised academic governance models, such as ‘entrepreneurial’ and ‘network’ governance.47

The management of risk on these fronts depends upon conceptualising both the unique status and expertise embodied in elected staff and student representatives who add to the university’s responsibility to undertake open and ethical governance, through greater transparency and accountability. Staff participation in governance is critical to the ability of universities to work in the public interest and for the public good.

7. Towards a Code of Open and Ethical University Governance

Edward and Clough (2005) have long proposed that “making the roles, responsibilities and expectations explicit to each other and to stakeholders” is perhaps the most important step towards good governance.48 The NTEU considers this statement important advice.

In many jurisdictions other than Australia, development of a code of best practice has represented a useful means to ensure potential council members meet responsibilities through proper induction or continued skilling and development. Consider the Association of Governing Boards of Universities and Colleges Board Responsibility for Institutional Governance (2010) and the Committee of University Chairs The Higher Education Code of Governance (2014) (see Appendix 6).49

In contrast, the UCC’s Voluntary Code of Best Practice for the Governance of Australian Universities (2010) is a limited document, which does not outline core values in relation to the distinctiveness of universities as specific kinds of public institutions.50

The NTEU has previously explored best practice in governance through a statement of principles. In 2007, the NTEU Education Committee developed a draft NTEU statement of principles on university governance (Appendix 7). Most of these principles were adopted by National Council, and the 2015 National Council Statement attached to this document (Appendix 7A) highlights the overlap with the 2007 Draft Statement. There is significant variance between the draft and final statements, including on the following matters:

 Recognising intuitional autonomy and academic freedom as fundamental to university governance;  Communication by representatives with university stakeholders and constituents;  How the size and composition of university governing bodies should be determined;  The prima facie relationship of NTEU members with externally appointed members;  Risk management as a function of university governing bodies;  Endorsement of democratic governance processes for academic and student staff;  Recognising the role of academic board;  Responsibility to act in the interests of the university as a whole.

Take the matter of recognition of institutional autonomy and academic freedom, which is neither part of the NTEU National Council Statement, nor the Universities Australia Voluntary

47 Julie Rowlands (2017) Academic Governance in the Contemporary University Perspectives from Anglophone nations, Springer Publishing. 48 Meredith Edwards and Robyn Clough (2005) Corporate Governance and Performance: An Exploration of the Connection in a Public Sector Context, University of Canberra, Issues Series Paper, No.1, January 2005. 49 Association of Governing Boards of Universities and Colleges (2010) Statement on Board Responsibility for Institutional Governance, https://www.agb.org/sites/default/files/agb-statements/statement_2010_institutional_governance.pdf; Committee of University Chairs (2014) The Higher Education Code of Governance, http://www.universitychairs.ac.uk/wp- content/uploads/2015/02/Code-Final.pdf 50 Universities Australia (2010) Voluntary Code of Best Practice for the Governance of Australian Universities, 11

Code. In the UK, legislation laid the responsibility for protection of freedom of speech within the university upon its governing body back in 1986.51

The NTEU proposes the development of a Code of Open and Ethical Governance to provide an opportunity for the NTEU to shape new governance norms and to define for all council members (not just those who are NTEU members) the appropriate attributes of good governance in higher education. The focus of this proposed code draws in part upon the concept of “ethical governance”, noting the NSW Auditor General’s 2016 report that, “A university’s reputation is one of its most valuable assets for attracting quality teachers, students and research funding. Therefore, acting ethically should not only focus on compliance with laws and regulations. It should also focus on acting with honesty, integrity and in a way that is consistent with the reasonable expectations of the broader community”.52

The NTEU’s position is that ethical conduct in relation to university governance should embrace the specific and distinctive attributes of universities as institutions created for public purposes. Ethical conduct should be committed to open, transparent and inclusive governance cultures in which elected staff and students play a critical role. These constitute international norms, espoused in many comparable higher education systems, and there is no good reason why Australia should be left behind.

A draft of this code for the consideration of NTEU members is as follows:

This is the NTEU Code of Open and Ethical University Governance. The purpose of this code is to assist governing body members to appropriately consider and manage their formal responsibilities as members of university governing bodies.

This document is underpinned by the following views about public Australian higher education institutions:

 Australian universities are institutions established through legislation in the public interest and for public purposes. As such, they are accountable to multiple stakeholders, including Commonwealth, State and Territory governments, the communities in which they are located and serve, and the constitutive bodies of students, staff and graduates;  Institutional autonomy and academic freedom are essential to the work of Australian universities and are a key requirement for self-accrediting institutions. The core function of universities is to deliver teaching and research that engages with advanced knowledge and inquiry and promotes academic freedom and freedom of intellectual inquiry;  Universities have a right to institutional autonomy and independence from government on governance issues. These are the defining values of universities worldwide;  For academic freedom and institutional autonomy to be protected, openness and transparency in university governance is necessary;  University staff and students have a right and a professional responsibility to participate in university governing bodies and to criticise the functioning of higher education institutions including their own, as set out in the Recommendation Concerning the

51 Michael Shattock (2002) “Re-Balancing Modern Concepts of University Governance,” Higher Education Quarterly, Vol. 56, No. 3: 235–2442 at 38. 52 NSW Auditor General’s report 2016, https://www.audit.nsw.gov.au/publications/latest-reports/volume-two-2016- focusing-on-universities 12

Status of Higher Education Teaching Personnel, adopted by the 1997 General Conference of UNESCO.

The primary responsibility for governance of the university rests in the university governing body. The fundamental responsibility for all members of a university governing body is to contribute to ethical governance at their institution. The proper attributes of ethical governance as shared across all public and private sector institutions are: leadership, integrity, transparency, and accountability.

The following are fundamental responsibilities shared by all members of the university governing body:

1. To act in the best interests of the university as a whole; 2. To understand the mission of the university, consistent with legislative and regulatory obligations, and to assist in defining the university’s strategic direction; 3. To contribute to the monitoring and review of the governing body, including the performance of the vice chancellor, and ensure that governance structures and processes are fit for purpose; 4. To contribute to establishing and monitoring systems that enhance accountability and the management of risk, including for controlled entities and third party arrangements, and to ensure these systems are followed; 5. To ensure that structures and processes are in place to maintain academic standards. All governing bodies should acknowledge and respect the culture of open decision- making on academic board, and respect the role and views of university staff in relation to matters of curriculum, pedagogy, and professional development; 6. To protect academic freedom and institutional autonomy, including freedom of conscience and the freedom to criticise across the institution by academic and general staff, and by students; 7. To ensure transparency through open and timely communication with campus constituencies and the general public, to the extent that this is reasonable and does not risk a breach of confidence; 8. To act ethically. This means to act in good faith, honestly and for a proper purpose; to exercise due care and diligence; to not discriminate against other governing board members; and to avoid, and if not, to disclose all apparent conflicts of interest; 9. To be engaged with the expectations and values of the broader community; and 10. To promote equality and diversity throughout the institution.

13

APPENDIX 1: ELECTED, EXTERNAL AND EX-OFFICIO REPRESENTATION ON UNIVERSITY COUNCILS

Institution % Staff, % External % Ex Total student, officio Members alumni University of Western Australia 57.1 33.3 13.6 21 University of Sydney 54.5 31.8 22.2 22 Macquarie University 50.0 27.8 14.3 18 University of Adelaide 47.6 38.1 11.1 21 Murdoch University 44.4 44.4 21.4 18 Charles Sturt University 42.9 35.7 13.6 14 James Cook University 40.9 45.5 13.6 22 Queensland University of Technology 40.9 45.5 13.6 22 University of Queensland 40.9 45.5 13.3 22 Australian National University 40.0 46.7 20.0 15 Southern Cross University 40.0 40.0 17.6 15 University of Wollongong 35.3 47.1 17.6 17 University of the Sunshine Coast 35.3 47.1 15.0 17 Flinders University 35.0 50.0 20.0 20 University of New South Wales 33.3 46.7 11.1 15 Curtin University 33.3 55.6 10.5 18 Edith Cowan University 31.6 57.9 17.0 19 Average 16.5 University of New England 31.3 50.0 18.8 16 University of Melbourne 31.3 50.0 27.8 16 Australian Catholic University 27.8 44.4 16.7 18 University of Technology Sydney 27.8 55.6 16.7 18 Western Sydney University 27.8 55.6 11.1 18 Griffith University 27.8 61.1 20.0 18 University of Canberra 26.7 53.3 20.0 15 Charles Darwin University 26.7 73.3 18.8 15 University of Newcastle 25.0 56.3 31.3 16 University of South Australia 25.0 43.8 21.4 16 University of Southern Queensland 21.4 57.1 21.4 14 University of Tasmania 21.4 57.1 20.0 14 CQUniversity 20.0 60.0 23.1 15 Swinburne University of Technology 15.4 61.5 21.4 13 La Trobe University 14.3 64.3 20.0 14 Deakin University 13.3 66.7 20.0 15 Federation University 13.3 66.7 20.0 15 Victoria University 13.3 66.7 18.8 15 RMIT 12.5 31.3 17.6 16 Monash University 11.8 70.6 0.0 17 Bond University 0.0 100.0 9.1 10 University of Notre Dame 0.0 90.9 9.5 11

Source. Universities Chancellors Council 2016

14

APPENDIX 2: UNIVERSITY COUNCILS: PROPORTION OF PRIVATE SECTOR INTERESTS, 2016

Total Private % Institution Members sector Private Swinburne University of Technology 13 8 61.5 Deakin University 15 9 60.0 University of Notre Dame 11 6 54.5 Federation University 15 8 53.3 Edith Cowan University 19 10 52.6 Charles Sturt University 14 7 50.0 Western Sydney University 18 9 50.0 Bond University 10 5 50.0 Queensland University of Technology 22 10 45.5 Griffith University 18 8 44.4 Curtin University 18 8 44.4 University of New England 16 7 43.8 University of Newcastle 16 7 43.8 University of Melbourne 16 7 43.8 La Trobe University 14 6 42.9 Southern Cross University 15 6 40.0 University of New South Wales 15 6 40.0 Macquarie University 18 7 38.9 University of South Australia 16 6 37.5 RMIT 16 6 37.5 University of Queensland 22 8 36.4 University of Southern Queensland 14 5 35.7 Average 35.6 University of Wollongong 17 6 35.3 Monash University 17 6 35.3 Flinders University 20 7 35.0 CQUniversity 15 5 33.3 Victoria University 15 5 33.3 University of Western Australia 21 7 33.3 Murdoch University 18 5 27.8 University of Sydney 22 6 27.3 University of Adelaide 21 5 23.8 University of the Sunshine Coast 17 4 23.5 University of Tasmania 14 3 21.4 University of Technology Sydney 18 3 16.7 James Cook University 22 3 13.6 Australian National University 15 2 13.3 University of Canberra 15 2 13.3 Charles Darwin University 15 2 13.3 Australian Catholic University 18 2 11.1

Source. Various university websites

15

APPENDIX 3: UNIVERSITY CHANCELLORS BY OCCUPATION, 2016

Institution Name Former occupation Current occupation

Australian John NSW Premier Chair, Australian Government Catholic Fahey Reconstruction Inspectorate University Australian Gareth Minister for Foreign Affairs Honorary Fellow Oxford; Co-Chairs National Evans International Advisory Board, University Global Centre for the Responsibility to Protect Bond University Annabelle Federal Court judge; Chair, Arbitrator of the Court of Arbitration Bennett National Health and Medical for Sport; Member, Board of Research Council Directors Garvan Institute Charles Darwin Neil Executive Chairman, Chairman of Ardent Leisure Group University Balnaves Southern Star Group Charles Sturt Michele Chair. the Wheat Industry Chair, Meat and Livestock University Allan Advisory Taskforce; CEO Australia (MLA); Apple and Pear Patties Foods Limited; Australia Limited; Grains and executive roles with Amcor Legumes Nutrition Council Limited, Tasmanian (formerly Go Grains Health and Bioinformatics Centre of Nutrition). Excellence, Bonlac Foods Limited, Kraft Foods and ICI Dulux CQUniversity John General Manager of Unclear Abbott Operations, NRG Gladstone Power Station Curtin Colin General Manager Greater Chairman of Western Power; University of Beckett Gorgon Area, Chevron Chairman of Perth Airport Pty Ltd; Technology Australia director, Beach Energy; director, Scitech Deakin John Chairman, Australia Post Chairman of the Port of Melbourne; University Stanhope Director of AGL Energy Limited Edith Cowan Hendy Member of Parliament for Unclear University Cowan Merredin Federation Paul Director beyondblue, Unclear University Hemming President of RACGP Australia Flinders Stephen Chairman Santos, Chairman Chairman, Adelaide Capital University Gerlach Elders Ltd Partners Pty Ltd; Gerlach Asset Development Pty Ltd; Ebony Energy Ltd; Director of Beston Global Foods Ltd; Beston Pacific Asset Management Pty Ltd Griffith Henry CEO, Queensland Principal, Strategic and Financial University Smerdon Investment Corporation Consulting Services; Director, National Trust of Australia (Qld); Chair, AustSafe Super Ltd; Chair, Currumbin Wildlife Sanctuary Committee James Cook Bill Ambassador to the Unclear University Tweddell Philippines La Trobe Adrienne E Chair, CSIRO; Lieutenant Unclear University Clarke Governor, Victoria; Chief Scientist and Director of Hexima Limited Macquarie Michael Minister for State Chairman, Centenary Institute of University Egan Development, Minister for Cancer Medicine and Cell Biology; Energy Chairman, Newcastle Coal Infrastructure Group Pty Ltd

16

Monash Simon Chair, Macquarie Group Chairman, In2Science and Go8 University McKeon Industry and Innovation Board; Consultant, Macquarie Group Murdoch David Managing Director, Atlas Unclear University Flanagan Iron Limited Queensland Tim Fairfax Director, Rural Press Ltd President of the Queensland Art University of Gallery Foundation; Director of Technology Cambooya Pty Ltd; Rawbelle Management Pty Ltd; Principal of TV Fairfax Pastoral; Strathbogie Pastoral Company; JH Fairfax & Son RMIT Ziggy Chair of ANSTO, Opera Chair and CEO, NBN Co, Suncorp University Switkowski Australia Group; non-executive director, Healthscope, Tabcorp and Oil Search; former CEO Telstra, Optus and Kodak (Australasia) Southern Cross Nick Burton Chair, Australian Agricultural Chairman of Delta Agribusiness, a University Taylor Company Limited; Managing Director of M.H. Premium Farms, Director, Price Waterhouse and Principal of Hillgrove Pastoral Coopers Company Swinburne Graham Managing Director, Goldman Non-executive director Djerriwarrh University of Goldsmith Sachs Australia Investments Limited; SEEK Technology Limited; Zhaopin Limited. University of Rear Governor of South Australia Commissioner, Nuclear Fuel Cycle Adelaide Admiral Royal Commission; Director of a Kevin number of public and private Scarce companies University of Tom Calma Human Rights Co-Chair, Reconciliation Australia Canberra Commissioner University of Elizabeth National President of CPA Chair, Medibank; Chair of Dexus Melbourne Alexander Australia and Australian Wholesale Property Ltd; Director, Institute of Company Dexus Property Group Directors; Chair, CSL Limited University of James Manages 'Abington' estate, Forster New England Harris of Abington Pty Ltd University of David Chair, ASX Ltd; Sydney Chairman, Coca-Cola Amatil and New South Gonski Theatre Company, the ANZ Banking Group Wales Australia Council for the Arts, National Institute of Dramatic Arts; Director, Singapore Airlines, the Westfield Group, Infrastructure NSW University of Paul Jeans General Manager and CEO, Chair, Newcastle Port Corporation Newcastle Ferrous Minerals Business; Managing director, BHP Engineering; Director, Fosters Brewing Group, Energy Australia, Ausgrid and Newcastle Port Corporation. University of Peter Involved in the oil and gas Chair, Prendiville Enterprises Notre Dame Prendiville industry and has sat on several public company boards University of Peter Secretary, Department of Unclear Queensland Varghese Foreign Affairs and Trade University of Jim CEO, BAE Systems Saudi Chairman, Australian Nuclear South Australia McDowell Arabia Science and Technology Organisation non-Executive

17

director of a number of private and listed companies. University of John Founding Chairman, Dornbusch Southern Dornbusch Partners Pty Ltd; Chairman of Queensland Freight Terminals Pty Ltd University of Belinda Chair, QBE Insurance Chair, Thales Australia Limited, a Sydney Hutchinson Group; director of Telstra, non-executive director of AGL Coles Myer, Energy Energy Australia, TAB, University of Michael Premier of Tasmania Unclear Tasmania Walter Field University of Catherine President, Business Council Unclear Technology Livingstone of Australia Sydney University of John Dean, North Coast Deanery, Unclear the Sunshine Dobson Archdiocese of Brisbane Coast University of Michael Chair, National Australia Chair, Wesfarmers Limited, Western Chaney Bank Limited Woodside Petroleum Limited Australia University of Peter Secretary, Department of Director, AMP Ltd Western Shergold PMC; external director, Sydney Corrs Chambers Westgarth University of Jillian Chair, Clean Energy Finance Unclear Wollongong Broadbent Corporation; Director, Reserve Bank of Australia, Coca-Cola Amatil Limited, ASX Limited, Special Broadcasting Service (SBS), Woodside Petroleum Ltd and Qantas Airways Ltd, Victoria George Director, Pappas Carter Unclear University Pappas Evans and Koop (PCEK) Chairman, Energy Matters Pty Ltd; Total private 26 Total 39

% Private 66%

Private sector

Source. UCC website

18

APPENDIX 4: SUMMARY OF PUBLIC POLICIES AND LEGISLATION 1988-2017

The Dawkins white paper (1988) signalled important shifts in the Commonwealth’s direction on university governance (aside from initiating the most significant changes to Australian higher education funding and management in generations), by articulating an approach based on “strong managerial modes of operation” reflected in the “development and implementation of strategic planning, performance monitoring and review, according to the agreed educational profile for each institution”. The White Paper made broad brushstroke assertions in a number of narrow areas, namely the need to redefine the role of the VC as CEO; redefining the VC relationship with the governing body; advocating reductions in the size of the governing body to 10-15; and stating that the responsibility of the governing body was to act as ‘trustees’ of the institution.

Report of the Committee of Inquiry: Higher Education Management Review (Hoare Report) (1995) was the first comprehensive review of HE management, since the 1986 Commonwealth Tertiary Education Commission’s (CTEC) Review of Efficiency and Effectiveness (Dawkins not withstanding). It was undertaken by the Higher Education Management Review Committee, commissioned by the Labor government and chaired by David Hoare. A change of government stopped implementation of the review’s recommendations. The West Review (1998) later restated all recommendations made in the Hoare report.

The Hoare Report was followed by the state government reports Balancing town and gown: report of South Australian Review of University Governance (1996) and the Victorian Ministerial Committee of Advice on University Governance (Storey report) (1997).

The Victorian Review of University Governance (Hamilton Report) (2002) focused on quite different issues compared to the Dawkins and Hoare Reports. It was established to consider how the public interest might be better protected, considering a range of matters that included the increasing levels of private funding, the operation of controlled entities, and the desire to ensure that public resources were not diverted to other activities.

The National Governance Protocols (NGP) (2004) were a response to concerns about university governance raised in the 2002 review Higher Education at the Crossroads. They were implemented under Backing Australia's Future (BAF) (2003) and became effective on 2 June 2004. The Commonwealth Government of Australia tied annual grant funding increases to universities’ adherence to the NGPs, taking control of State and Territory powers in relation to universities and centralising university enabling Acts under their control, including governance arrangements and founding objects. All State and Territory governments agreed to make legislative changes to allow universities within their jurisdictions to comply with the Protocols. All 43 eligible higher education providers complied with the NGPs and the Higher Education Workplace Relations Requirements in 2006 and received an additional 7.5 per cent over the base funding cluster rate in 2007.

In late 2005, the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) commissioned a review of the impact of the Protocols and the scope for their enhancement. The Joint Committee on Higher Education (JCHE) undertook the review which was placed on hold when the 2007 election was called.

The HEWRRS and the NGPs were rendered ineffective through a Legislative Instrument registered on 23 February 2008 and tabled 11 March 2008. The subsequent Higher Education Support Amendment (Removal of the Higher Education Workplace Relations Requirements and National Governance Protocols Requirements and Other Matters) Act 2008 removed the requirement for higher education providers to meet the NGPs as a condition of Commonwealth Grant Scheme funding. It was passed on 20 September 2008.

The Governance of NSW Universities report (2009) was a NSW Legislative Council committee report focused on the size and composition of governing bodies, the power to dismiss a Chancellor, induction and professional development, performance evaluation and the clarity of governance roles.

The Voluntary Code of Best Practice for the Governance of Australian Universities (2010) was created when the Joint Committee on Higher Education asked Universities Australia to develop the code to replace the existing National Government Protocols. The task was carried out by a working- party chaired by University of Western Sydney Chancellor John Phillips. The code was approved by

19

Universities Australia and the University Chancellors Council, and subsequently by the Ministerial Council for Tertiary Education and Employment in July 2011.

Universities Governing Bodies Act 2011 (NSW) was an act introduced to enforce flexibility in the size and composition of university governing bodies.

In 2012, the Victorian government introduced the Education Legislation Amendment (Governance) Act 2012 (VIC). This legislation removed elected staff and student positions on University Councils in Victoria and allowed for universities to request further changes to reduce its size and composition. This was amended by the Andrews Labor government with the Education Legislation Amendment (TAFE and University Governance Reform) Act 2016 (VIC), which reintroduced elected staff and student representation.

Also in 2012, the Tasmanian government introduced amendments to the University of Tasmania Act that changed the size and composition of that University Council through the University of Tasmania Amendment Act 2012 (TAS).

The Universities Legislation Amendment Act 2016 (WA) introduced amendments that reduced the size and changed the composition of university councils at Curtin University, Edith Cowan, University of Western Australia, and the University of Notre Dame, particularly reducing the proportion of elected representatives. It also introduced changes in other governance areas such as the nominations committees for council, and remuneration for university councillors.

The Statutes Amendment (Universities) Bill 2016 (SA) contains amendments that reduce the size of the University Council’s at Flinders University and University of Adelaide.

The University Legislation Amendment Bill 2017 (QLD) significantly reshapes governance through a range of measures other than just the reduction of staff and student representation. It proposes to end the power of university governing bodies to make statutes, allows the governing body to further sub- delegate powers and functions, empowers the council to change its own the size without a change to legislation. The Bill also reduces staff and student representation at James Cook University, with a view to reductions at other institutions. A proposed model (which is not part of the legislation but is consistent with it) outlines that all university councils will have: 2 to 3 official positions, 3 to 6 governor in council appointed positions,3 to 6 council appointed positions, and at least 3 elected positions or a minimum 25% of total number of members. 25% is much lower than the average across the state and represents an attempt to significant reduce staff and student representation.

Throughout this period, various state Auditors General have also produced reports, such as the NSW Auditor-General’s Report to Parliament: Vol. 2 Focusing on Universities (2016) which recommends universities implement processes to manage risk that include ethical frameworks and risk management specifically targeting controlled entities.

20

APPENDIX 5: UNIVERSITY GOVERNANCE ISSUES DEBATED IN AUSTRALIAN PUBLIC POLICY

s

)

AS)

(QLD

7

2012 (T 2012 (WA) 2016

2016 (VIC) 2016

2011 (NSW) 2011

Hoare Report 1995 (CWTH) 1995 Report Hoare

Dawkins review 1988 (CWTH) 1988 review Dawkins 1996 gown and town Balancing (SA) (VIC) 1997 report Storey (VIC) 2002 Review Hamilton Protocol Governance National (CWTH) 2004 NSW of Governance (NSW) 2009 report Universities Practice Best of code Voluntary (CWTH) 2010 Bodies Governing Universities Act Legislation Education Act (Governance) Amendment (VIC) 2012 Tasmania of University Act Amendment Legislation Education and (TAFE Amendment Governance University Act Reform) Legislation Universities Act Amendment Legislation University 201 Bill Amendment

Changes to enacting legislation on governance responsibilities. X X X Vice Chancellor's relationship to governing body X X X Discretionary powers of governing body X X X X Managing conflicts of interest. X X X X Size and composition of the governing body. X X X X X X X X X X X External independent members compared to internal members. X X X X X X

Appointment process for external members. X X X X X Selection criteria for external members. X X X X X Proper induction and/or continuing skilling and development. X X X X X Whether academic board has a role in governance and X X X curriculum. Process for government nominations X X X Formal role for Ombudsman for grievance procedures. X X X Provisions for the dismissal of councillor or Chancellor. X X X Performance evaluation of council. X Staff and student engagement. X X X X X X X Remuneration for councillors. X X Risk management. X X X

21

APPENDIX 5A: SPECIFIC COUNCILLOR RESPONSIBILITIES AND ROLES DEFINED IN PUBLIC POLICY DEBATE

)

(QLD

2012 (TAS) 2012 (WA) 2016

NSW NSW

2011 (NSW) 2011 (VIC) 2016

endment (TAFE and and (TAFE endment

Hoare Report 1995 (CWTH) 1995 Report Hoare

Dawkins review 1988 (CWTH) 1988 review Dawkins 1996 gown and town Balancing (SA) (VIC) 1997 report Storey (VIC) 2002 Review Hamilton Protocols Governance National (CWTH) 2004 of Governance (NSW) 2009 report Universities Practice Best of code Voluntary (CWTH) 2010 Bodies Governing Universities Act Legislation Education Act (Governance) Amendment (VIC) 2012 Tasmania of University Act Amendment Legislation Education Am Reform) Governance University Legislation Universities Act Act Amendment Legislation University 2017 Bill Amendment Defines councillor responsibilities: X X X X X X X Responsibilities defined through enabling legislation X X Responsibility to act in best interest of institution. X X X X Responsibility to identify the mission and strategic direction of the university. X X Responsibility to monitor the performance of the vice chancellor. X X X X X X Responsibility to monitor their own performance. X X Responsibility to establish and monitor systems of control and accountability, including X X X monitoring controlled entities. Reflect community expectations X X X Risk management X X Responsibility for the sound management of the institution X X Overseeing and monitoring the academic activities of the university X Approving significant commercial activities X Act solely in the interests of the institution taken as a whole having regard for its objects X X • Act in good faith, honestly and for a proper purpose X X • Exercise appropriate care and diligence X X • Not improperly use their position to gain an advantage for themselves or someone else X X • Disclose and avoid conflicts of interest X X

22

APPENDIX 6: ALTERNATIVE UNIVERSITY GOVERNANCE PRINCIPLES: CANADA & UK

Canadian Board Responsibility for Institutional Governance (2010)

1. The ultimate responsibility for governance of the institution (or system) rests in its governing board. Boards are accountable for the mission and heritage of their institutions and the transcendent values that guide and shape higher education; they are equally accountable to the public and to their institutions’ legitimate constituents. 2. The board should establish effective ways to govern while respecting the culture of decision making in the academy… Moreover, by virtue of their special mission and purpose in a pluralistic society, colleges and universities have a tradition of both academic freedom and constituent participation— commonly called “shared governance”—that is strikingly different from that of business and more akin to that of other peer review professions, such as law and medicine. The meaningful involvement of faculty and other campus constituencies in deliberations contributes to effective institutional governance. 3. The board should approve a budget and establish guidelines for resource allocation using a process that reflects strategic priorities. Budgets are usually developed by the administration, with input from and communication with interested constituents. The board should not, however, delegate the final determination of the overall resources available for strategic investment directed to achieving mission, sustaining core operations, and assuring attainment of priorities. 4. Boards should ensure open communication with campus constituencies. Faculty, staff, and students have a vital stake in the institution and should be given opportunities to be heard on various issues and participate in the governance process. 5. The governing board should manifest a commitment to accountability and transparency and should exemplify the behavior it expects of other participants in the governance process. From time to time, boards should examine their membership, structure, policies, and performance. Boards and their individual members should engage in periodic evaluations of their effectiveness and commitment to the institution or public system that they serve. In the spirit of transparency and accountability, the board should be prepared to set forth the reasons for its decisions. 6. Governing boards have the ultimate responsibility to appoint and assess the performance of the president. Indeed, the selection, assessment, and support of the president are the most important exercises of strategic responsibility by the board. 7. System governing boards should clarify the authority and responsibilities of the system head, campus heads, and any institutional quasi-governing or advisory boards. 8. Boards of both public and independent colleges and universities should play an important role in relating their institutions to the communities they serve. The preceding principles primarily address the internal governance of institutions or multi-campus systems. Governance should also be informed by and relate to external stakeholders.

UK’s The Higher Education Code of Governance (2014)

1. The governing body is unambiguously and collectively accountable for institutional activities, taking all final decisions on matters of fundamental concern within its remit. 2. The governing body protects institutional reputation by being assured that clear regulations, policies and procedures that adhere to legislative and regulatory requirements are in place, ethical in nature, and followed. 3. The governing body ensures institutional sustainability by working with the Executive to set the institutional mission and strategy. In addition, it needs to be assured that appropriate steps are being taken to deliver them and that there are effective systems of control and risk management. 4. The governing body receives assurance that academic governance is effective by working with the Senate/Academic Board or equivalent as specified in its governing instruments. 5. The governing body works with the Executive to be assured that effective control and due diligence take place in relation to institutionally significant external activities. 6. The governing body must promote equality and diversity throughout the institution, including in relation to its own operation. 7. The governing body must ensure that governance structures and processes are fit for purpose by referencing them against recognised standards of good practice.

23

APPENDIX 7: NTEU 2007 DRAFT STATEMENT OF PRINCIPLES ON UNIVERSITY GOVERNANCE

This document is based on previous work done by the Union in the area of university governance and has been compiled as a starting point for discussions by the Education Committee on developing an NTEU statement of principles on university governance. It was agreed at the last Education Committee meeting that this statement should be a political position statement and should seek to incorporate staff and student participation, university independence and institutional autonomy as well as academic freedom. The statement should be as broad as possible so that it can be used for different audiences and for lobbying purposes.

 Australia Universities are public institutions and as such are accountable not just to the Commonwealth Government, but to other stakeholders, including State and Territory Governments, the communities in which they are located and serve, the students they educate and the staff who work for them.  The core function of Australia’s public universities is to deliver teaching and learning that engages with advanced knowledge and inquiry and has a commitment to promoting and defending academic freedom.  Intuitional autonomy and academic freedom are essential to the work of Australian universities and are a core requirement of accreditation standards for self-accrediting institutions. Universities have a right to institutional autonomy and independence from Government on governance issues, course offerings, research content and intellectual endeavour are the defining values of universities worldwide.  University staff and students have a right and a professional responsibility to participate in university governing bodies and to criticise the functioning of higher education institutions, including their own, as set out in the Recommendation Concerning the Status of Higher Education Teaching Personnel, adopted by the 1997 General conference of UNESCO.  University staff and students have detailed knowledge and specialist expertise when it comes to matters of the university and its operations.  Members of university governing bodies have a right to communicate with all university stakeholders and the general public and acting as a conduit for the views of particular constituencies is a key function of members of governing bodies. Rather than representing a conflict of interest, university staff and students are elected to university governing bodies precisely because they are expected to understand the perspective of a particular constituency that is important to the university.  Members of governing bodies have an obligation to keep their constituency informed about the deliberations of the governing body and seek their views and advice.  Members of university governing bodies have a right to the full and timely provision of essential information about the operation of the institution on whose governing body they serve.  Each governing body should have in place a formal program of professional development for members. This should go beyond only ensuring that members are aware of the nature of their duties and responsibilities and include, at a minimum, training in areas such as how to access and interpret institutional data, particularly financial information, and a high quality and relevant induction for new members.  Adequate workload release provisions and child care should be made available for staff involved in governing bodies and other governance functions of the institution.  The size and composition of a university governing bodies’ membership should be determined by the university and legislated in a universities enabling Act.  Involvement of members of any State or Commonwealth parliament can be positive and should be left to the discretion of the institution concerned.  Risk management procedures should include the need for an evaluation and review of the performance of governing bodies.  Measures to oversee controlled entities should include the stipulation that resulting documentation be publicly available, in line with universities’ public service obligations.

- Unique to the draft statement

Source. NTEU Policy Manual (archived)

24

APPENDIX 7A: EXTRACT FROM THE 2015 NTEU POLICY STATEMENT ON UNIVERSITIES, REGULATION AND GOVERNANCE

The governance structures of universities must facilitate universities meeting their core responsibilities and maintain the essential values expected of them by their staff, students and the Australian community. NTEU insists that university governance structures are democratic and participatory, and constructed in accordance with the following principles:

 The governing body plays an important role in protecting and sustaining the core function of universities, to deliver teaching and research that engages with advanced knowledge and inquiry and promotes and protects freedom of inquiry.  Universities are public institutions and as such are accountable to multiple stakeholders, including Commonwealth, State and Territory governments, the communities in which they are located and serve, and their constitutive bodies of students, staff and graduates.  The size and composition of university governing bodies’ membership should reflect the institution’s mission and the diverse constituencies and stakeholders to which it is accountable.  University staff and students have a right and a professional responsibility to participate in university governing bodies, as set out in the Recommendation Concerning the Status of Higher Education Teaching Personnel, adopted by the 1997 General conference of UNESCO. This includes the right to be actively engaged in and critique the functioning, management and governance of higher education institutions, including their own.  University staff have detailed corporate knowledge and specialist expertise relating to the teaching and research activities and culture of their university and the effective management and oversight of its operations.  Staff and students who serve on governing bodies must have the confidence of the university community and this is best achieved by a fair and open election process. The selection of staff and student members either by management or the governing body itself will reduce the diversity of opinion available and substantially undermine the confidence of the community in governing body decisions.  Adequate workload release provisions and child care arrangements must be provided for staff involved in governing bodies and other governance functions of the institution.  The governing body must acknowledge and value the essential role of the academic board, and seek to build cooperation and understanding between the two bodies.  Members of university governing bodies have a responsibility to act in the interests of the university as a whole.  Members of university governing bodies have a right to the full and timely provision of essential information about the operation of the institution on whose governing body they serve. As part of this, measures to oversee controlled entities should include the stipulation that resulting documentation be publicly available, in line with universities’ public service obligations and a whole of institution commitment to quality assurance.  Members of university governing bodies should have access to a formal program of professional development. This should go beyond only ensuring that members are aware of the nature of their duties and responsibilities. Professional development includes, at a minimum, training in areas such as how to access and interpret institutional data (particularly financial information), and acknowledging, valuing and working constructively with diversity.

- Unique to this statement

Source. NTEU Policy Manual (archived)

25

APPENDIX 8: COMPARISON OF AUSTRALIAN UNIVERSITY GOVERNING BODIES

Governme Governing % Staff, nt Body Professio Undergradu Postgradu student, Official Appointed Appointed Academic nal ate ate Alumni Total alumni Australian Catholic University 5 0 8 3 1 1 0 0 18 27.8 Australian National University 2 7 0 3 1 1 1 0 15 40.0 University of Canberra 3 8 0 1 1 1 1 0 15 26.7 ACT Average 3 5 2.7 2.3 1 1 0.7 0 16 31.3 Charles Sturt University 3 2 3 1 1 1 0 3 14 42.9 Macquarie University 4 1 4 3 1 1 0 4 18 50.0 Southern Cross University 3 2 4 2 1 1 0 2 15 40.0 University of New England 3 2 6 1 1 1 0 2 16 31.3 University of New South Wales 3 2 5 2 1 1 1 0 15 33.3 University of Newcastle 3 2 7 2 1 1 0 0 16 25.0 University of Sydney 3 6 1 4 1 1 1 5 22 54.5 University of Technology Sydney 3 2 8 2 1 1 1 0 18 27.8 University of Wollongong 3 2 6 2 1 1 1 1 17 35.3 Western Sydney University 3 6 4 1 1 1 1 1 18 27.8 NSW Average 3.1 2.7 4.8 2 1 1 0.5 1.8 16.9 37.3 Charles Darwin University 3 3 8 0 2 0 1 1 15 26.7 Bond University 0 0 10 0 0 0 0 0 10 0.0 CQUniversity 3 5 4 1 1 1 0 0 15 20.0 Griffith University 2 7 4 2 1 1 1 0 18 27.8 James Cook University 3 8 2 3 2 2 1 1 22 40.9 Queensland University of Technology 3 8 2 3 2 2 0 2 22 40.9 University of Queensland 3 7 3 3 1 1 1 3 22 40.9 University of Southern Queensland 3 5 3 1 1 1 0 0 14 21.4 University of the Sunshine Coast 3 5 3 2 1 2 0 1 17 35.3 QLD Average 2.5 5.6 3.9 1.9 1.1 1.3 0.4 0.9 17.5 32.0 26

Flinders University 3 0 10 2 2 2 1 0 20 35.0 University of Adelaide 3 0 8 2 2 2 1 3 21 47.6 University of South Australia 5 0 7 1 1 1 1 0 16 25.0 SA Average 3.7 0 8.3 1.7 1.7 1.7 1 1 19 37.4 University of Tasmania 3 2 6 1 1 1 0 0 14 21.4 Deakin University 3 5 5 1 0 1 0 0 15 13.3 Federation University 3 5 5 1 0 1 0 0 15 13.3 La Trobe University 3 5 4 1 0 1 0 0 14 14.3 Monash University 3 6 6 1 0 1 0 0 17 11.8 RMIT 3 3 2 1 0 1 0 0 16 12.5 Swinburne University of Technology 3 4 4 0 1 1 0 0 13 15.4 University of Melbourne 3 4 4 2 1 1 1 0 16 31.3 Victoria University 3 5 5 1 0 1 0 0 15 13.3 VIC Average 3 4.6 4.4 1 0.3 1 0.1 0 14.4 16.7 Curtin University 2 7 3 2 1 2 0 1 18 33.3 Edith Cowan University 2 7 4 2 1 2 0 1 19 31.6 Murdoch University 2 5 3 3 1 2 0 2 18 44.4 University of Notre Dame 1 0 10 0 0 0 0 0 11 0.0 University of Western Australia 2 4 3 4 1 2 1 4 21 57.1 WA Average 1.8 4.6 4.6 2.2 0.8 1.6 0.2 1.6 17.4 36.8 National Average 2.8 4 4.5 1.8 0.9 1.2 0.4 0.9 16.5 31.5 Minimum 0 0 0 0 0 0 0 0 10 Maximum 5 8 10 4 2 2 1 5 22

Source. Universities Chancellors Council 2016

27