How to corporatise a university (in three steps)

Academics for public universities have been asked by Honi Soit to provide research findings for this piece of investigative journalism. Read an excerpt bellow and find the link to the full article at the end of it.

“[…]Adam Lucas, a staff-elected councillor at the University of Wollongong, told Honi that “in my experience and that of my predecessors, we’ve seen very limited interrogation by members of most matters brought before Council.” Lucas further questioned why, if corporate board appointees were so fiscally competent, universities continued to cut jobs and courses. 

Even when applying their own corporate standards, the lopsided make-up of university governing bodies contravenes a basic principle of governance. Principle no.2 of the ASX’s Corporate Governance Principles and Recommendations holds that “The board should…collectively have the skills, commitment and knowledge of the entity and the industry in which it operates, to enable it to discharge its duties effectively and add value.”

For example, 73% of Rio Tinto’s board has experience in the resources and mining sector. Representation is similar across other large mining companies. Likewise, banks’ boards are drawn largely from former bankers, financial industry experts and private equity mavens. Banks and mining companies are ultimately interested in the same goal – increasing profits and shareholder value – yet their governance is tailored to their particular industries. 

By contrast, appointments to the governing bodies of universities – which have radically different structures to private companies, and are interested in entirely different outcomes – are made to fit a generic corporate board profile. Bankers and consultants abound; there are more appointees from Macquarie Group alone than there are from arts backgrounds, and career directors stake their turf. 

Universities are not-for-profit entities, yet their governance ‘skills matrix’ points entirely towards unabashed profit-making. Universities are interested in the production of high-quality public interest research and teaching, yet people with a basic knowledge of higher education and representatives of academic fellows have been pushed out to make way for Fellows of the Australian Institute of Company Directors. 

Alessandro Pelizzon, an academic-elected member of the Southern Cross University council says that there is a “schizophrenic relationship” between governing bodies and universities. He told Honi that “these corporate managers are very effective and very well-functioning corporate managers. But the problem is that universities are not corporations. They might have a corporate structure, but they’re not corporations.” […]”

Read the whole article by Deaundre Espejo and Max Shanahan in Honi Soit here.