The future of governance in private higher education providers

1. The future of governance in private higher education providers Presenter: Dr Peter Ryan Adjunct Senior Lecturer, ASM Adelaide - 29th August 2013

2. Key questions • What is the impact of independent governance on private higher education providers that operate as tightly held owner operators? • Is the owner always the best person to be the CEO? • How can the funders of private higher education maintain adequate control of their investment? • In the future will proprietary companies need to behave more like small unlisted companies to be a higher education provider?

3. But first some statistics… Higher Education Providers by ownership Source: TEQSA National Register, Retrieved 16 August 2013 from www.teqsa.gov.au/national-register QA JUN2011 GA099

4. … and some more statistics… QA JUN2011 GA099

5. Commonwealth Government Tertiary Education Quality and Standards Agency Act 2011 Education Services for Overseas Students Act 2000 (ESOS) Higher Education Support Act 2003 (HESA) Tertiary Education Quality and Standards Agency (TEQSA) Qualification Standards and Australian Qualifications Framework (AQF) Commonwealth Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (DIICCSRTE) HE Standards Panel HE Standards Framework Provider Registration Standards HIGHER EDUCATION APPROVAL PROCESSES Registration as a higher education provider (NSA-HEP) Accreditation of higher education courses Endorsement to recruit and deliver courses to overseas students Approval as a Higher Education Provider (FEE-HELP HEP) For initial applications will be assessed together These approvals are optional The “New” HE Regulatory Framework Course Accreditation Standards QA JUN2011 GA099

6. Typical governance structure in a private HEP Governing Body (Board of Directors) Academic governance Corporate governance Academic Board Executive Management Teaching and LearningCommittee Course Advisory Committee(s) QA JUN2011 GA099

7. What does independent governance mean? • The separation of ownership from management (Provider Registration Standard 3.3) • The separation of corporate and academic governance (Provider Registration Standard 3.7) QA JUN2011 GA099

8. Is the owner the best person to be the CEO? • In some cases – no • The CEO is selected by the Board of Directors and, if necessary, removed by the Board of Directors • The Board of Directors monitors the performance of the CEO • If the owner is the CEO how is the separation of ownership from management achieved? QA JUN2011 GA099

9. How can the funders of private higher education maintain adequate control of their investment? • The owners must select directors that have the skills to oversee the finances of the HEP effectively • The Board must select a CEO who has the skills to meet financial forecasts and manage the HEP’s finances QA JUN2011 GA099

10. What is the future for tightly held proprietary companies that are HEPs? • Independent corporate governance mandatory • Owners do not control the business operations • Financial reporting at a high level QA JUN2011 GA099

11. 5 components of good governance Independence Expertise Five components of good governance Breadth of knowledge Clarity of purpose Leadership QA JUN2011 GA099

12. Questions? QA JUN2011 GA099