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

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?

But first some statistics… QA JUN2011 GA099 Higher Education Providers by ownership Type of institution Australian university Overseas university University of specialisation Higher education provider Total Government owned institutions Church owned institutions Privately owned institutions Total Source: TEQSA National Register, Retrieved 16 August 2013 from

… and some more statistics… QA JUN2011 GA099 YEARNEW APPROVALS (to date)1 TOTAL64

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

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

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

Is the owner the best person to be the CEO? QA JUN2011 GA099 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?

How can the funders of private higher education maintain adequate control of their investment? QA JUN2011 GA099 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

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

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

Questions? QA JUN2011 GA099