44244
Global Trends in University Governance
by
John Fielden
The Education Working Paper Series is produced by the Education Unit at the World Bank
(HDNED). It provides an avenue for World Bank staff and consultants to publish and
disseminate preliminary education findings to encourage discussion and exchange ideas within
the World Bank and among the broader development community. Papers in this series are not
formal World Bank publications. The findings, interpretations, and conclusions expressed in
these papers are entirely those of the authors and should not be attributed in any manner to the
World Bank, its affiliated organizations or to the members of its board of executive directors or
the countries they represent.
Copies of this publication may be obtained in hard copy through the Education Advisory
Service (eservice@worldbank.org), and electronically through the World Bank Education
website (www.worldbank.org/education).
Copyright � The World Bank
March, 2008
Washington, D.C. � U.S.A.
ii
Contents
Introduction....................................................................................................................................2
1. The National Framework ......................................................................................................4
Vision and strategy ----------------------------------------------------------------------------------------- 4
Higher education laws --------------------------------------------------------------------------------------- 7
The legal status of public university institutions -------------------------------------------------------- 9
Private universities ---------------------------------------------------------------------------------------- 11
2. Governance of the Higher Education Sector.....................................................................14
Who manages the system overall? ----------------------------------------------------------------------- 14
What powers are retained at the centre?------------------------------------------------------------------ 16
What central agencies are needed? ----------------------------------------------------------------------- 17
How much autonomy should institutions have?--------------------------------------------------------- 18
How are institutions held accountable? ------------------------------------------------------------------ 19
How is quality assured? ------------------------------------------------------------------------------------ 23
How is research in the tertiary sector managed? ------------------------------------------------------- 26
3. Funding .................................................................................................................................28
The overall framework of funding ----------------------------------------------------------------------- 28
Resource allocation ---------------------------------------------------------------------------------------- 29
Financial monitoring and control ------------------------------------------------------------------------- 31
The management of property assets ---------------------------------------------------------------------- 34
Income generation ---------------------------------------------------------------------------------------- 35
4. Governance of Public Institutions ......................................................................................37
Powers of the Board ---------------------------------------------------------------------------------------- 37
Selection of the Chair and Members and Board composition ----------------------------------------- 37
Appointment of the President------------------------------------------------------------------------------ 39
The search for "good governance"------------------------------------------------------------------------ 41
5. Conclusions ...........................................................................................................................43
References .....................................................................................................................................45
Appendixes....................................................................................................................................47
iii
Appendixes
Appendix I - Three Recent Higher Education Laws Embodying Reforms ----------------- 48
Appendix II - Typical Relationship Between National Legislation--------------------------- 50
and University Statutes and Regulations ---------------------------------------- 50
Appendix III - Possible Requirements of Tertiary Education Laws Relating to Private
Institutions--------------------------------------------------------------------------- 52
Appendix IV - Functions of Buffer Bodies-------------------------------------------------------- 53
Appendix V - Possible Location of Key Management Functions ----------------------------- 54
Appendix VI - Examples of University Autonomy in Selected Countries -------------------- 55
Appendix VII � Higher Education Information (HEI) Management Capacity Levels -------- 56
Appendix VIII - Selected Performance Indicators ------------------------------------------------- 57
Appendix IX - Mechanisms for Allocation of Public Resources to Teaching ---------------- 58
Appendix X - Characteristics of Governing Boards in Selected Countries ------------------ 60
Appendix XI - Statements on Responsibilities of the Board in U.K. and Australia---------- 64
iv
Introduction
In this paper we are concerned with the way that governments plan and direct their tertiary
education sectors. The term "governance" is used to describe all those structures, processes and
activities that are involved in the planning and direction of the institutions and people working in
tertiary education. We also look at some aspects of the internal governance of institutions, but
only to the extent that the state believes that it should be involved. This is in line with the key
principle behind so many recent autonomy reforms � that institutions should, as far as possible,
be free to manage their own affairs.
As the demand for higher education continues to grow and as governments acknowledge their
role in promoting economic development, it becomes increasingly important to ensure that higher
education systems are managed in an effective way. Higher education systems are also getting
more complex due to the growth in the number of public and private institutions, so that the task
of managing and monitoring the sector is becoming more specialized and demanding. As a result,
the old model of total control from a central ministry of education (MOE) is proving
unsustainable in the long term and is being replaced throughout the world by other models. These
alter the mode of central involvement from one of detail to that of strategy and rely on more
sophisticated forms of monitoring and performance review.
Neave and Van Vught have described a continuum at one end of which is the "state control
model" where the centre seeks to control its universities, and at the other end is the "state
supervising model" where it monitors and regulates them (1994). As we shall see in this paper,
more countries are moving from the control model to the supervisory model in all aspects of their
relationship with their universities.
The pressures in tertiary education systems have been caused by the growth in numbers of
institutions due to the inexorable increase in participation rates (and the demand for this is to
continue in the context of the knowledge economy). In parallel, it is being recognized that the
state is not the best arbiter of how individual universities should operate. The management of
very complex academic communities cannot be done effectively by remote civil servants, and the
task should be left to institutions themselves. Giving them autonomy recognizes that their
management needs are different and allows them full exercise of their academic freedoms. The
constraints of centrally managing a system that needs to be flexible and responsive have become
clear. A variety of alternatives are emerging and this paper aims to summarize them, together
2
with the new approaches to financing and institutional governance that usually accompany
delegation from the centre.
The aim of this paper is to provide those concerned with higher education policy with a concise
summary of current developments in the management of tertiary systems. While the paper seeks
to provide evidence of the global trends in the ways that such systems and institutions are
planned, governed, and monitored, its coverage applies more systematically to the
Commonwealth world than to other regions of the world, notably the francophone countries and
Latin America. The scope is also limited to issues of strategy, funding, and governance, although
some reference is made to assessing quality and institutional management.
Since we are describing changes across the world nomenclature is inevitably a problem. The
heads of institutions enjoy many different titles ranging from principal, director, rector, president,
vice chancellor, and even rector magnificus. They are referred to here as "president." Similarly
the governing body of a tertiary institution is called a "board," rather than council, senate, or
court.
3
1. The National Framework
Vision and strategy
The most important role of the state in tertiary education is to set a vision and a strategy. This can
involve seeking answers to major questions such as:
� What is higher education for?1
� What are the principal goals that it should achieve in our country?
� What targets should be set in terms of participation in higher education?
� How will these targets be achieved � by what form of institution, by what mode,
over what time?
� What is the role, if any, of the private sector and the community?
Strategic planning studies in higher education have for example been carried out in Pakistan,
Bangladesh, Malaysia, New Zealand, Tanzania, South Africa, the United Kingdom and some
States in the U.S.2 These strategic exercises are usually lengthy processes lasting at least a year
with several levels of technical support and public consultation on the draft outcomes. In South
Africa, for example, the National Commission on Higher Education had four sub-committees
working for it (transformation, funding, size and shape, and governance), while in Bangladesh
there were six expert groups (covering the size and shape of the sector, quality, finance,
1A comprehensive answer to this was given by the United Kingdom National Committee of Inquiry into Higher
Education (1997) in the Report of the National Committee of Inquiry into Higher Education � known as the Dearing
Report. "The aim of higher education should be to sustain a learning society. The four main purposes which make
up this aim are:
� to inspire and enable individuals to develop their capabilities to the highest potential levels throughout
life, so that they grow intellectually, are well equipped for work, can contribute effectively to society and
achieve personal fulfillment;
� to increase knowledge and understanding for their own sake and to foster their application to the benefit
of the economy and society;
� to serve the needs of an adaptable, sustainable, knowledge-based economy at local, regional and national
levels;
� to play a major role in shaping a democratic, civilized, inclusive society."
2Pakistan Ministry of Education (2002). Report on the Task Force on Improvement of Higher Education in Pakistan;
Pakistan Tertiary Education Commission. (2005). Medium Term Development Framework, 2005-10. Government of
Pakistan; United Kingdom National Committee of Inquiry into Higher Education (1997) in the Report of the
National Committee of Inquiry into Higher Education � known as the Dearing Report; New Zealand Tertiary
Education Advisory Commission (2000). Shaping a Shared Vision: Initial Report of the Tertiary Education Advisory
Commission; South Africa National Commission on Higher Education (1996). An Overview of a New Policy
Framework For Higher Education Transformation; Tanzania Ministry of Science, Technology and Higher Education
(1999). National Higher Education Policy.
4
information and communication technologies (ICT), research, and staffing) that reported to a
strategic planning committee.
There are several reasons why countries decide to embark on a major strategic planning exercise
for their higher education sector:
� The country is transforming itself from a socialist to a market economy, and
requires a new vision and structure for its higher education.
� Similarly, a transformation process after the abolition of a system as divisive as
apartheid requires a totally new approach with a unified system of higher education.
� There is a general consensus that a higher education system is in crisis and requires
overhauling due to its failure to produce enough graduates despite spiralling costs.
� A country will have a development vision for its growth and wishes to ensure that
the higher education sector is playing its proper part.
� A move to mass higher education forces recognition that the state cannot afford to
finance a system wholly and must adopt another approach.
One feature of such strategies is that they frequently set out a vision for higher education for the
future, for example:
Pakistan: "Transformation of our institutions of higher education into
world class seats of learning, equipped to foster high quality education,
scholarship and research, to produce enlightened citizens with strong
moral and ethical values that build a tolerant and pluralistic society
rooted in the culture of Pakistan." (Pakistan Ministry of Education 2002)
United Kingdom: "Higher education is fundamental to the social,
economic and cultural health of the nation. It will contribute not only
through the intellectual development of students and by equipping them
for work, but also by adding to the world's store of knowledge and
understanding, fostering culture for its own sake, and promoting the
values that characterize higher education: respect for evidence; respect
for individuals and their views; and the search for truth. Equally, part of
its task will be to accept a duty of care for the wellbeing of our democratic
civilization, based on respect for the individual and respect by the
5
individual for the conventions and laws which provide the basis of a
civilized society." (United Kingdom National Committee of Inquiry into
Higher Education 1997)
In New Zealand, the Tertiary Education Advisory Commission started with a vision of the
country's society and economy, which it argued that the tertiary system should support and
develop.
In the case of South Africa, all of its strategies since 1994 have been driven by the need to
transform its society from one dominated by apartheid; thus the Education White Paper in 1997
summarised the key challenges facing the higher education system as being "to redress past
inequalities and to transform the higher education system to serve a new social order, to meet
pressing national needs and to respond to new realities and opportunities" (South Africa
Department of Education 1997).
Singapore has a very targeted and concise vision of its long term future: "to develop a self
sustaining education eco-system offering a diverse and distinctive mix of quality education
services to the world, thus becoming an engine of economic growth, capability development, and
talent attraction for Singapore" (Economic Review Committee 2003).
Since higher education is widely recognised as a key to national economic competitiveness and
overall prosperity, the state is justified in defining a vision for higher education and then setting
strategies to achieve that vision. As we have seen, the selected vision will depend on the starting
point in the country concerned. Even if there is common agreement that a global knowledge-
based economy requires certain types of human resource, not all countries will respond to the
challenges this presents in the same way.
An added complication is that higher education is now being delivered across borders and trans-
national education, in which institutions from one country educate those of another through
setting up offshore campuses or delivering online education is becoming widespread. No longer
can governments consider only their domestic providers. They face a much harder role of seeking
to identify and then monitor tertiary education provided to their citizens by organisations that
they cannot control.
For many years, internationalisation meant study abroad and overseas scholarships. Now the
internet brings tertiary education into countries where it is almost invisible to the state. Even the
6
providing countries do not know how many overseas citizens are pursuing courses offered by
their institutions. This cross border provision has to be brought within a country's overall
strategic thinking about its tertiary education.
Higher education laws
The boundaries of a nation's higher education system are not always easy to define since tertiary
or higher education activities may well take place within the ambit of ministries or agencies not
directly concerned with education. Thus, ministries of science, industry and technology will have
scientific and possibly technological institutions, a defence ministry will have military or naval
academies awarding degrees, the ministries of health and agriculture will have medical schools
and agricultural universities.3 There are many central government agencies that could have
legitimate policy interests in (and managerial authority over) higher education activity. Co-
ordination of these interests is needed to arrive at a national strategic framework for the future.
The boundaries of the activities carried out within tertiary institutions are also changing. In some
countries a majority of those studying are not within the classic age group of 18-24 and part-time
and distance students outnumber those studying full-time in face-to-face mode. Higher education
is seen as a life-long activity that all citizens will return to at several times during their working
(and retirement) lives. The implications of this for legislators are that drafting has to avoid
creating barriers to flexibility; institutions will need to adapt and change, and the law should not
stand in their way.
There is also a need to consider the growing roles of the private sector and professional bodies as
providers of higher education in many countries. Finally, as higher education is becoming a
global business, we find that almost every country is facing issues of international providers
(with face-to-face, correspondence, and virtual delivery) operating within their national
boundaries.
One result of the growing complexity of the higher education sector and the number of players in
it has been the increasing use of legislation. This can clarify the frameworks within which the
various stakeholders operate and can also set out a regulatory regime for both state and private
organisations (from all countries).
3The most extreme example of this was the People's Republic of China where until 10 years ago almost every
ministry had its own university or universities.
7
The scope of higher education laws varies greatly according to the national context and policy
priorities. In some countries the laws are very brief, while others aim to make them
comprehensive by a consolidation or clarification of previous legislation. It is not unusual for
major issues, such as creating and defining the powers of a buffer body or quality assurance and
accreditation agency, to be the subject of separate legislation. Similarly, individual laws are often
used to set out the regulatory regime over private higher education providers. In many European
countries a spate of new laws on higher education has been driven largely by the need to adopt
the principles of the Bologna Declaration4.
To illustrate the possible coverage of higher education legislation, Appendix I analyses the
contents of three recent laws in Ireland, South Africa, and Sri Lanka. Other countries that have
recently passed laws incorporating major higher education reforms include Denmark, Indonesia,
Japan, Tanzania, and Thailand.
Common elements in such laws are:
� Clarification of the powers of the ministry of education or its equivalent and
the buffer body (if any), including those over funding
� Statements on university autonomy and academic freedom
� Clarification of the powers and responsibilities of the governing bodies of
autonomous institutions
� Statements on accountability and the powers of the minister
In many cases the higher education law is simply part of a major reform process. In South Africa,
for example, the timetable of events in the transformation process after the end of apartheid in
1994 was as follows:
� A National Commission on Higher Education (1996) setting out the main
principles and guidelines for reform
� An Education White Paper (1997)
� A Higher Education Act (1997)
� A National Plan for Higher Education (2001)
4Since adoption of the Bologna Process involved substantial changes to the structure of post 16 education in many
countries, legislation was needed.
8
� Transformation and Restructuring White Paper (2002)
National legislation is the apex of the regulatory pyramid and has to be designed for the long
term. Indeed, there could be serious problems if there were clauses in legislation that required
regular amendment or updating. Once universities are given autonomy, their governing bodies
will be responsible for developing their statutes (permanent laws) or regulations (adjustable laws)
to govern their affairs. Appendix II shows a typical situation with a summary of what issues
might be covered in the three levels. For example, while an act might suggest that lay members
should be in the majority on a university board, the university statutes might give the precise
numbers and composition.
The legal status of public university institutions
One of the key elements in a higher education law is the definition of the legal status of public
universities. There is a spectrum of positions ranging from tight control over them by the state to
their enjoying full independence and autonomy. The typology in Table 1 (Four Models from
Control to Autonomy) represents just four of the many possible points on the spectrum. However,
even these extremes are not simple black and white pictures. Within the State Control model
there has to be some freedom as a central ministry cannot control everything (for many financial
and practical reasons), and within the Independent model there is an implicit acknowledgement
that the MOE is entitled to hold the institution accountable in many respects and must retain
overall strategic control over the sector.
Table 1: Four Models from Control to Autonomy
Institutional Status of
Governance Model public universities Examples in
A. State Control Can be agency of the MOE, or a state-owned
corporation Malaysia
B. Semi-Autonomous Can be agency of the MOE, a state-owned corporation New Zealand,
or a statutory body France
C. Semi-Independent A statutory body, a charity or a non profit corporation
subject to MOE control Singapore
A statutory body, charity or non- profit corporation Australia,
D. Independent with no government participation and control linked to United
national strategies and related only to public funding Kingdom
9
The principle of academic freedom is a key driver for many of the reforms discussed in this
section. It is the cornerstone of autonomy, as it lies at the root of enabling institutions to manage
their affairs as fully as the state will allow. One useful definition of academic freedom is
enshrined in clause 14 of the Irish Universities Act, 1997, as follows:
"14.-- (1) A university, in performing its functions shall--
(a) have the right and responsibility to preserve and promote the traditional
principles of academic freedom in the conduct of its internal and external
affairs, and
( b ) be entitled to regulate its affairs in accordance with its independent ethos
and traditions and the traditional principles of academic freedom, and in
doing so it shall have regard to --
� the promotion and preservation of equality of opportunity and
access,
� the effective and efficient use of resources, and
� its obligations as to public accountability,
and if, in the interpretation of this Act, there is a doubt regarding the
meaning of any provision, a construction that would promote that ethos
and those traditions and principles shall be preferred to a construction
that would not so promote.
(2) A member of the academic staff of a university shall have the freedom,
within the law, in his or her teaching, research and any other activities
either in or outside the university, to question and test received wisdom, to
put forward new ideas and to state controversial or unpopular opinions
and shall not be disadvantaged, or subject to less favorable treatment by
the university, for the exercise of that freedom." (Ireland Office of
Attorney General 1997)
However, universities cannot enjoy unlimited autonomy, and there have to be checks and
balances at two levels if the interests of the state are to be achieved and its citizens are to be
protected; first, the State will wish to monitor and assess institutional performance and, second,
the institution will have a governing body that holds its managers (particularly the vice
10
chancellor/president/rector) accountable for achieving institutional goals. These are discussed
below.
There is a strong international trend to increasing the autonomy of public institutions by making
them independent, self-governing organisations along the lines of models C (Semi-Independent)
or D (Independent) listed above. This change is often described as moving from a system of state
control to one of "state supervision". For example, Japan passed the National University
Corporation Act in 2003 that made all its national universities legally autonomous with greater
powers delegated to the president and a governing board. Singapore also passed similar
legislation in 2005 making its three universities autonomous and "corporatised"; technically they
become not-for-profit companies limited by guarantee. This is not strictly necessary if legislation
has confirmed their independent status, but it does ensure that universities will be subject to some
of the financial and reporting disciplines that apply to corporations. In Germany, the State of
Nord Rhein-Westfalia has recently allowed its 33 university institutions the freedoms to decide
which professors to employ and what courses to offer, decisions that had been taken previously at
the centre.
Private universities
The higher education strategy of many countries recognises that without a thriving private sector
the national targets for participation in higher education would be simply unachievable. Not only
is the cost of expansion beyond the budgetary possibilities of the state, but in many cases the
existing institutions are unable to respond adequately to the changing needs of the market; private
providers can move faster and sometimes more effectively to fill gaps in supply of higher
education.
However, in some countries the state has concerns about the private sector: fears as to whether
the profit motive is at odds with the values of education, the risk that its providers may be unable
to deliver quality provision and the absence of a research culture. These factors often make
governments nervous about openly encouraging the private sector, especially in countries where
public university associations and student unions are vocal.
Demand-side financing is sometimes used in support of private higher education. Financing
instruments coming under this category are often referred to as "scholarships," "bursaries,"
"financial aid." There are examples of privately owned and operated institutions receiving
government funds in order to help educate students with support from the state. Where funding
11
follows the student, this is a common option and such a mixed economy operates in several
countries. The advantage is that it frees the state from the role of supervising the delivery of
higher education in the private institutions and limits the recurrent cost to the same per capita
sum as would be distributed to a state institution. A variant of this model is where state funding
goes towards scholarships to support poorer students in private institutions. In both cases issues
of quality arise, as it is essential that the private sector provision is at least as good as that offered
by state institutions.
Policy decisions are required on what level of regulatory control is needed and what criteria
should be adopted in recognising private institutions. Governments are often very quick to bear
down heavily on the private sector, while ignoring similar (and sometimes worse) levels of
under-performance in the state sector. The most common approach to government supervision of
the private sector lies in a carefully balanced regime of regulation and encouragement, which
requires some legislative backing. Appendix III illustrates the range of topics where legislation
has been used to regulate private institutions in recent years. For example, in the Republic of
Yemen private universities are only allowed if they have a formal partnership with an overseas
institution. In China, foreign private institutions can only operate in partnership with a state-
funded university.
Some of the questions that need to be answered in defining the role and character of the private
sector in the national system of higher education include:
� What should be the balance between the public and private sectors?
� Is it acceptable for the private sector to focus on commercially profitable
programmes with strong market demand? How can the risks and benefits of
this be balanced with state supervision?
� What approval and regulatory processes should the state adopt and which
would achieve results?
� Will the same quality assurance regime be applied to both private and public
providers?
� Will any form of public funding be offered to help promoters of private
institutions or to subsidise their poorer students?
� Should the same regulatory regimes apply to state and private universities
from other countries establishing local campuses and seeking to be providers?
12
Several countries have recently legislated specially for private institutions and included in this
definition are those public institutions from other countries wishing to deliver trans-national
education or distance education in the country concerned. Thus, a publicly funded U.K.
institution offering programmes in South Africa is regarded as a private university by the South
African government. China passed legislation relating to overseas universities wishing to deliver
programmes in China and already has a thriving domestic private sector with 1,300 private
colleges serving an estimated 1.4 million students. India is currently revising its regulatory
approach in the context of a growing number of international providers wishing to establish
partnerships with domestic organisations.5 Likewise Tunisia has introduced a law regulating
foreign providers.
5Considerable activity has been invested in developing guidelines on how to manage cross border provision. See, for
example, the UNESCO (2005). Guidelines for Quality Provision in Cross-border Higher Education.
13
2. Governance of the Higher Education Sector
A crucial issue in all higher education systems is how the system should be managed. This
section explores six key questions:
� Who manages the system overall?
� What powers are retained at the centre, if some are devolved to institutions?
� What central agencies are needed?
� How much autonomy should institutions have?
� How are institutions held accountable; what regulation and reporting is
required?
� How is research in the tertiary sector managed?
Who manages the system overall?
In recent higher education reforms three types of change have been occurring: the delegation of
powers by central government to another lower tier of government, delegation to a specialised
buffer body, or delegation direct to institutions themselves.
In some European and transition countries the ministry of education (MOE) has recently
devolved control over universities to regional or provincial governments, but retains a
coordinating policy function. This echoes the long established position in some countries such as
Australia, the United States, Germany, and Canada, although in the latter two cases the federal
governments have limited powers. China has also moved responsibility for more of its state-
funded universities to the provincial level, retaining control only over a limited number of
prestige institutions, but sharing this in some cases with a province. If responsibility is wholly
devolved to provincial level, there is a real risk that central government loses control over
national policy. It is, for example, hard for the federal government in Canada or Germany to set
new national strategies unless it is by channeling extra funds in order to achieve the desired
change. However, in environments where responsibility is split between the centre and the states,
as in Australia and the U.S., the centre can exercise control by retaining some strategic financial
and funding powers.
14
Delegation of powers to one or more buffer bodies has long been the preference in countries such
as the U.K., India, and Pakistan, and is now being adopted elsewhere.6 A range of powers can be
delegated to the new intermediary organizations, as shown in Appendix IV, which describes the
powers of ten buffer bodies of the British Commonwealth and lists examples of functions that
buffer bodies can fulfill. The most common model is for the MOE to pass all matters relating to
funding and operational management to the buffer body, while retaining central control over
functions, such as national strategy and the overall size and shape of the higher education (HE)
system. However, this model is not always followed; in South Africa the relatively new buffer
body, the Council on Higher Education, is purely advisory and does not have any role in
allocating funds. In Thailand another model has been adopted: the Ministry of Higher Education
has been abolished and a new agency, the Commission for Higher Education, has been created to
take over its role. However, this is located within the Ministry of Education, so it is unlikely to be
a truly independent "buffer" body. Pakistan has yet another model of a buffer body, since the
newly formed Higher Education Commission has an extremely wide range of functions and its
chair has ministerial status.7
The key advantage of having a buffer body is that it removes all the detailed operational issues
from the MOE. One major benefit from this is that it protects the state from charges of
intervention in academic affairs and generally encourages greater institutional autonomy; it saves
the legislature from receiving regular lobbying and allows the buffer body to develop an in-depth
understanding of the sector. The MOE can thus focus on policy issues and not get involved in
detailed management of institutions. The buffer body can recruit staff who are specialists in
higher education and not career civil servants. These staff can operate within an independent
career structure created by the buffer body.
By comparison, if universities are managed by a division of the MOE, they can be:
� Subject to the direct intervention by the minister on detailed matters of
university finance and management.
� Limited in their ability to think strategically, except within government policy
guidelines.
6See, for example, the recent creation of the Tanzania Commission for Universities under the Universities Act, No 7
of 2005.
7Its activities include functions such as the management of overseas staff exchanges and research partnerships,
training of academic staff in pedagogy, management of a national ICT network and a national Virtual Library.
15
� Liable to lose their best staff at the whim of the head of the civil service.
� Have little flexibility as regards recruiting staff or taking in secondments or
part-time specialists from universities.
� Unable to operate with a board chaired by an independent chair drawn from
industry or civil society.
However, there are some risks in creating a buffer body, described further in Appendix IV. The
buffer body's board is usually chaired by an independent person, who is neither an academic nor
a member of the government, but its other members will include rectors and sector specialists as
well as members of the public at large. The survival and satisfactory operation of a buffer body
requires a close working relationship between the minister of education and the chair of the board
of the buffer body, since the latter will be implementing and interpreting the policies set by the
former. Ambitious ministers could also feel that the existence of a buffer body leaves them with
less control than they would like and is a possible barrier to changes they wish to introduce.
There have been several instances of buffer bodies being ignored or closed down because
ministers lost confidence in them or thought that they might be becoming too independent.8
The third model is for the MOE to continue to manage the institutions directly, but to delegate
considerable powers to them so that the central role becomes a more strategic one. This is usually
only adopted in the smaller national systems with few institutions. However, Botswana, with its
one university, disproves this rule since it recently created a classic buffer body, the Tertiary
Education Council, to oversee all its tertiary institutions.
What powers are retained at the centre?
If the MOE has decided to devolve powers, it must decide what functions it is essential to retain.
The usual strategic areas which are never devolved are:
� Setting overall policy and agreeing the "size and shape" of the sector (eg;
balance between public and private, types of tertiary institution)
� Strategic planning for the sector (but not necessarily for individual institutions)
� Negotiating overall funding with the ministry of finance
� Co-ordination with other ministries (eg: health, agriculture) on higher
education issues
8In Australia the Higher Education Commission was abolished due to a difference of opinion with the Minister of
Education. A buffer body was also abolished in New Zealand, but has recently been revived in another form.
16
It is possible for all the other managerial and policy making functions to be undertaken by other
entities, such as a buffer body, an independent agency, or an officially recognised committee of
university presidents or vice chancellors. The range of possibilities is illustrated in Appendix V.
In Ontario, for example, the collection of financial statistics is carried out by the Council of
Ontario Universities (the committee of presidents), while in the United Kingdom an independent
agency is responsible for reviewing and monitoring how universities select their students.
What central agencies are needed?
The decision on what powers are devolved will influence the number and function of central
agencies. There may be more than just the one principal buffer body, and the number will depend
on the extent to which the MOE wishes to undertake all the sector management functions itself. It
is usual for these bodies to be linked to the MOE, but to be legal entities with a board and
independent members drawn from both higher education and industry or commerce. Their
funding is either by a grant from the MOE, from university subscriptions, or income generated
from services provided.
The logic behind the creation of these agencies is that their functions tend to be specialist and
unsuitable for civil servants. They can attract and retain staff with the specialist skills required
from all sectors. The MOE can provide them with strategic goals and funding and then allow
them to achieve their targets however they wish.
Examples of buffer agencies include:
� A national quality assurance body (of which more below) (Australia)
� An agency for collecting and publishing statistics (U.K.)
� A technical agency to provide and manage the national higher education
computing network and negotiate bandwidth access for the sector (Tertiary
Education Network - TENET, South Africa)
� A board to control and manage student loans, levels of government subsidy
and collection of repayments (Kenya)
� An advisory body providing support and assistance to institutions for the
improvement of teaching (Australia)
� A national appeal service to which universities and students can take disputes
for resolution (England)
17
� A technical agency providing support for universities in all matters relating to
ICT, interoperability and open source standards, electronic content,
e-learning, technical standards, etc. (Korea)
� An agency providing management development and training for senior staff in
universities (U.K.)
How much autonomy should institutions have?
The extent of autonomy that institutions are allowed by the state is often a mixture of inherited
rights, tradition, legislative intent, and societal culture. It is usually built up over time through a
variety of legislative processes, ministerial decisions, and ad hoc regulations. It is rarely a finely
crafted structure to a rational design. It is also culture specific and rights or controls that are
taken for granted in one country can be unthinkable in another. For example, a survey of
government controls in 1996 found that academic staff in one African country were expected to
ask the ministry before they travelled overseas (Richardson, G. and Fielden, J. 1998).
The basic principle behind institutional autonomy is that institutions operate better if they are in
control of their own destiny. They have an incentive to change if they can directly benefit from
their actions; they can be entrepreneurial and reap the rewards. Or they can be timid and see their
competitor institutions overtake them. If a group of institutions in a university system is given
autonomy to respond to national policy goals as they think fit, there is a reasonable chance that
they will choose different ways of reaching the same goal and that some will be more innovative
than others. Had they been centrally directed, this variety would have been unlikely.
Appendix VI describes the extent of autonomy that is given to universities in six countries as
regards several key areas of decision making. From this and experience elsewhere we can see
where the state traditionally still retains control over decisions, and also those areas where
delegation is not always simple.
One of the barriers to the grant of greater autonomy is the fear in government that institutions are
not competent to exercise the powers effectively. Popular beliefs do not consider academic
professors to be managerially skilled and in some countries institutions have been subjected to
efficiency reviews before they were given independent powers.9 This approach has been followed
9In the U.K. in 1989 when polytechnics were taken away from the control of local government and created as
independent corporate entities, they were first subjected to external reviews of their business practices and financial
management.
18
in the matrix in Appendix VII, which sets out a ladder of management capacity in five areas of
university management. This may be used to assess management competences before different
rewards and powers can be granted by the state.
How are institutions held accountable?
One of the biggest questions facing governments is how to balance the autonomy needed by
public universities with the accountability required by the state. How can results, outputs, and
outcomes be monitored and accountability encouraged?
This issue is at the heart of most recent reforms, and there is a widespread trend to granting
greater freedoms to institutions. However, while direct controls are being relaxed, governments in
return are developing more complex supervisory and reporting regimes.
The core areas where either the MOE or a buffer body would always retain direct control over
institutions are as follows:
� Review and approval of draft statutes/articles of incorporation before a
university is given autonomous status.
� Grant of degree awarding powers to a new public or private institution.
� Setting a cap on the total student numbers overall funded by the state and the
totals in selected high cost areas (e.g., medical and veterinary students). If the
state is funding the bulk of the costs of higher education, it is reasonable for it
to want to control this cost by placing a cap on the total student numbers that it
pays for. How students would be allocated within this cap is a matter for the
buffer body to decide through a bidding or allocation process. None of this
would affect the right of institutions to enrol full fee paying private students, if
the state agrees to this principle.
Subject to these, there are few other limits to the freedoms that institutions can enjoy under
maximum autonomy regimes. However, states often prefer to introduce modified autonomy in
sensitive areas, such as:
� The right to set academic salary levels. Countries such as the U.S., Australia,
Canada, and South Africa have traditions in which individual institutions
negotiate salaries with their academic and other staff and wide variations can
19
develop between institutions as a result. European countries such as France
and the U.K., on the other hand, have standard national academic pay scales. A
compromise approach is to have national pay scales, but to allow institutions
to pay market supplements for those disciplines (such as law, computing,
accountancy) where it is very hard to attract good staff on the academic scales.
� The power to start a new academic programme is one that is widely delegated
to institutions. The argument is that the market is a better mechanism than
central planning for deciding what programmes are needed, and an institution
is better placed to assess and influence its local market. However, in some
countries this power is exercised by the buffer body, since the move to a
market situation could be too radical a step and there may be quality concerns.
An area where states are often reluctant to give up all control relates to the selection or
appointment of university presidents or the chairs of university boards. This is covered in more
detail below.
Once the extent of autonomy has been agreed, how does the state hold its institutions
accountable, on both policy and financial matters? If it accepts the principle that it should no
longer exercise detailed control, what are the options open to it? There are three things it can do:
exercise control through approval of the strategy; agree through a contract with the institution
that it should deliver certain outcomes in return for funding; and create a regime of regulation and
reporting on performance. It is also able to influence behavior by offering incentive funds if
institutions adopt certain policies.
The key control by the state is to measure an institution's performance against its agreed
institutional strategy. If there is a national higher education strategy, it can provide the vital
framework for universities to use in developing their own strategy. In other words, each
institution would be encouraged to develop its own strategic plans for achieving the national
goals in its regional and institutional context. Institutions would add their own strategic priorities
so that the resulting institutional strategy would meet both sets of goals. The Tertiary Education
Commission in New Zealand adopts this model with a system of "Charters" and "Profiles" under
which universities show how they will interpret and implement the nationally agreed goals of
higher education. A similar approach has been adopted in the U.S. state of Virginia, but with an
unusual twist in that universities can select the level of autonomy and financial freedom they
20
wish to have (Virginia Secretary of Education 2008). The performance contracts in France and
Austria allow universities to receive additional funding against their commitment to fulfill a
number of national objectives (measured with specific targets agreed between the ministry of
education and the institutions).
It is not uncommon for the MOE or the buffer body to base all of its monitoring and evaluation of
an institution's performance on a three-year strategic plan. From this plan, targets would be
developed, and each year budgets would be prepared showing how the financial allocations (and
other income) received would be used to work towards the strategy. These targets, plans, and
performance measures would be used by the board of the university in its internal reporting and
control, and would be reported annually to the funding body or the MOE.
The funding body would thus assess the institution, not just on its financial rectitude, but more
significantly on its success in achieving the strategic targets it had set itself. In due course this
might encourage the funding body to move towards a system in which common performance
measures were adopted to show the extent to which national strategies were being achieved.
Thus, for example, where it was a national strategy to increase the number of students from rural
or socially deprived areas, institutions would be expected to develop their own ways of making
this happen and to report in a consistent format on what they had achieved.
The second model of state control is broadly similar, as it is based on an agreed contract between
the state and each institution. Such contracts will take the particular history and plans of the
institution into account and will set out an expectation of the outcomes that the university will
achieve. These contracts are becoming more focused on performance and results rather than
inputs to the system such as student numbers. In Austria, for example, 20 percent of the state
funding is related to indicators of results agreed in performance contracts.
The third approach, which may apply in all the above cases, is for the MOE or the buffer body to
require their institutions to report at intervals on their success in achieving national policies.
These policies may have explicit targets connected to them such as those relating to access for
poorer communities or ethnic groupings, acceptance of students with disabilities, development of
links with the community, etc.
Governments are increasing their search for useful performance indicators that will measure the
success of their higher education policies, as well as providing them with measures for assessing
21
comparative institutional effectiveness and efficiency. As a result, institutions are being asked to
submit growing numbers of statistical reports and returns.10 Appendix VIII provides some
examples of indicators commonly used at both national and institutional levels. Governments
will need to consider the number of indicators to be used for performance-based financing
purposes, as well as how much state funding should be linked to such a system. Experience with
various systems of performance-based financing suggests that having too many indicators can
dilute policy drivers, and sometimes having a small number of indicators makes the priorities
clear to institutions. States must also consider how much funding to link to any performance-
based system. Too much of an institution's budget linked to performance indicators can
sometimes lead to budget instability from year to year, with the risk of putting strategic planning
processes in jeopardy. Also, given the vagaries of state budgets from year to year, governments
are often looking for items to cut in order to economize. In some instances of belt tightening on
public expenditures, the performance-based allocations have suffered by being the first area
slated for reduction.
Some countries that have a reputation for considerable academic freedom may, in effect, be
burdening their universities with substantial reporting and regulatory requirements. In England,
for example, "regional consultants" from the buffer body visit universities at intervals to talk
through their performance on achieving their strategic plans and government policy targets;
statistics are produced showing how universities' achievements compare with "benchmark
targets" set by government; and there is a rigorous process of reporting through Annual
Monitoring Statements. Concern about the volume of regulation and the cost to both government
and universities has even triggered the creation of a "Higher Education Regulation Review
Group" charged with trying to cut down the volume of regulation.
Some governments see it as their role to support their higher education sector by providing
institutions with advice and guidance on academic, technical, or management matters. This is
best done through agencies such as those described in Paragraph 2.13, which operate
independently of the MOE or the buffer body and are able to recruit the specialist staff that their
role requires. Universities are not forced to take up the services of such agencies; however, their
funding is often linked to the degree of success they have in persuading universities to use their
services.
10For typical end products from this process see the published KPIs from Australia or the United Kingdom. For
Australia see www.dest.gov.au/archive/highered/statistics/characteristics/contents.htm . For the U.K., see
www.hesa.ac.uk/pi/home_middle.htm
22
How is quality assured?
Ensuring not only the provision, but also the quality, of higher education is one of the key roles
of the state and increasing attention is being given to creating, expanding, reforming, and
building the capacity of the agencies and mechanisms by which quality is assured. In this section
we discuss the frameworks that need to be established if effective quality assurance is to be
achieved. It is important to note that in some countries the independent, voluntary, and highly
participative nature of the quality assurance systems serve as a substitute for stronger government
regulation.
There are several interventions that the state may wish to make in order to provide stakeholders
with assurance on the quality of inputs, outputs, and outcomes of higher education. The stages in
the lifecycle of an institution when this intervention takes place are as follows:
� Authorization -- At the stage when a new public or private institution is given
approval to go ahead and develop programmes and recruit staff. This is the
authorisation stage and will allow the new entity to operate legally.
� Accreditation -- When the institution has prepared its programmes, recruited
its staff and acquired the necessary facilities, it may require approval to
proceed. This is sometimes called the accreditation stage. Such accreditation
may be of two kinds, that relating to the institution and that relating to
academic programmes.
� A continuing quality assurance system -- In some countries accreditation has
to be renewed at intervals (5 or 10 years) and an accreditation agency will
organise a process to satisfy itself that standards are being maintained.
� Re-authorization -- When an existing entity wishes to offer new programmes,
it may be required to seek authorisation and approval for those programmes. In
some very specialised or professional disciplines there may be involvement in
the decision by relevant professional bodies.
� Periodic review -- When the state wishes to ensure that existing institutions are
maintaining the quality of their provision, it may impose some form of
external quality audit or review. Failure in such reviews might be the trigger
for a ministerial decision to close the institution or to cancel the power to
award particular degrees. In South Africa in 2004, a re-accreditation project
looked at all the master's degrees in business administration (MBAs) that were
23
being delivered (by public, private and foreign institutions), and resulted in the
withdrawal of a large number of the programmes due to their failure to meet
national standards.
Alongside (and often prior to) all the external forms of quality assurance and audit, it is expected
that institutions will operate internal, self-administered processes of quality assurance and quality
improvement. These rarely have statutory backing, and represent good practice in institutional
management as they help to support the practice of institutional autonomy and make it effective.
Moreover, the process is as important as the findings, since it helps institutions to understand
themselves better and feeds into their academic planning processes through evidence-based
decision making. Rich accreditation and evaluation processes help strengthen institutional
development.
However, where such internal review activity does not exist, there is a stronger argument for
conducting external audit and review. While there is international convergence toward models of
good practice in quality assurance, countries have to develop a quality assurance system that is
manageable within their context and given resources.
From the statutory perspective the key point is that legislation should empower the ministry or a
suitably constituted independent quality assurance agency to approve new institutions, to inspect
or audit them as it thinks fit, to provide ways to guide institutions in improving the quality of
provision, and to close down any unsatisfactory provision, if necessary.
It is tempting for the state to assume that its own public universities are of a superior quality to
those operated by the private sector; thus, quality assurance agencies may be asked to focus
solely on the private sector at first. If any of these are profit making, they are always open to
suspicion of providing poor quality higher education. Empirical evidence on the qualitative
differences between for-profit and non-profit higher education is inconclusive at best. It is
important to note that corporate laws that regulate the distribution of surplus revenue to
shareholders vary quite dramatically throughout the world, and cannot monitor ethical behaviour
by private providers; in some countries the laws and regulations are more meaningful than in
others. Experience suggests that the most equitable approach towards quality assurance is to
establish a national agency that establishes common standards and criteria for quality assurance
that it then applies equally rigorously to both public and private sector institutions, as is the case
24
in several Latin American countries (Argentina, Chile, Colombia). Until recently Malaysia
operated two parallel quality assurance regimes for public and private institutions, a Quality
Assurance Division in the ministry for public institutions and a National Accreditation Board for
private institutions. Both have recently been combined into a single quality assurance body.
Once a government decides to establish a national quality review body to undertake one or more
of the functions described above, it has a choice as to the location of the body. It can be either a
division within the MOE, a part of the buffer body, or an independent entity. There are examples
of all these arrangements.11 The arguments for and against it being located within the MOE are
finely balanced.
Location within the MOE will give the body authority and clout. It will show that quality is
important. It will enable the quality judgments to influence policy where necessary and the
appropriate professional inputs can be obtained by seconding academic staff to the MOE to carry
out the work.
Conversely, it may be argued that an independent location is important to provide some
assurances that politics and quality judgments on academic content or delivery methods do not
get intertwined. The staffing and management of a quality body must inevitably require close
liaison with academic staff at various levels and an understanding of current developments in
pedagogy, e-learning, and other innovations. These qualities must be engrained in all staff at
managerial levels, not just the contract staff. Civil servants are unlikely to have these
characteristics and could find it difficult to express judgments on academic quality. More
importantly, if academic judgments are emerging from the MOE, there could be risks to
academic freedom and institutional autonomy on academic issues.
The role and activities of the quality assurance body will depend on the state of the sector and
how mature the arrangements are for quality assurance and quality enhancement within
institutions. If universities are already undertaking effective internal assurance, there might be a
need for only a light touch at the centre. Conversely, if the sector has done little, the central
agency might be justified in taking a more active accreditation and audit-oriented role. It might
then expect to reduce this over time as the sector established its own competence at quality
assurance and quality enhancement.
11Within the MOE: Malaysia, Thailand. Within the buffer body: Ireland, Pakistan, Sri Lanka. Independent: U.K.,
Australia, New Zealand. In the U.K. the quality assurance body was first with the Committee of Vice Chancellors,
then it was placed in the buffer body, and now it is a semi-independent entity.
25
In the US, the main actors responsible for carrying out quality assurance functions are
professional associations organized either on a regional basis (for program and institutional
accreditation) or by theme (for example Accreditation Board for Engineering and Technology
ABET for engineering education).
How is research in the tertiary sector managed?
The governance of research activity in universities can be extremely complex or very simple and
will, to a large extent, depend on the national funding and organizational model(s) in place.12 In
some countries research funds are allocated by the MOE or the buffer body together with
teaching funds, as the assumption is that every academic will do research and will thereby enrich
his/her teaching. In other countries, universities receive research funds from a multiplicity of
sources with different types of scrutiny and criteria (peer review, formulaic allocation,
competitive bidding, etc).
The role of the MOE or buffer body in setting research strategy for universities will usually be
strongly influenced by national research policy considerations. They will not be the sole players
in the debate; not only will ministries such as health and agriculture have their own research
interests and priorities, but national research councils or funding bodies may not wish universities
to be the sole or even principal agents for research. Their own research laboratories may be
competitors for funding. In addition, the interests of industry and charitable funders of research
will need to be taken into account; how much they will wish to rely on universities to perform
their research is a major variable. In some countries the bulk of applied research is undertaken
outside universities, and multi-national companies are increasing looking globally to see where
the best and most cost-effective research teams are based.
Thus, the policy questions on university research will be very dependent on the national context
and the place of universities in the whole picture. Context notwithstanding, there are still some
key policy questions affecting the university sector:
� What should be the balance between funding for applied and fundamental
research in universities?
� What should be the policy for promoting centres of excellence or seeking to
develop any world class specializations?
12For a concise description of the various ways in which research can be funded see Salmi, J and Hauptman, A M
(2006).
26
� Will funding be allocated to the development of cohorts of new researchers, as
well as to the encouragement of established researchers?
� Is research funding to be allocated separately from funding for teaching? If so,
on what basis?
� If the nation has scarce resources, how can research be targeted to Millennium
Development Goals?
� How can collaborative research be encouraged within the country?
� Is there a role for the MOE or buffer body in promoting international research
partnerships?
Few universities can finance substantial research from their own sources (apart from drawing on
occasional benefactions) and they will always be dependent on the state, charities, or industry for
their research funding. Institutions with limited access to such resources may decide to focus their
research efforts in a few selected areas in order to develop some centers of excellence.
27
3. Funding
The overall framework of funding
The growing demand for higher education is placing stress on the financial coffers of
governments in both the developed and developing world. Even in countries where the state is
contributing less than 50 percent to the cost of its public institutions, the search for ways of cost
recovery and income generation is unremitting. Against this background we describe the trends in
the way that universities are being funded and managed by their paymasters. Simply put, less
state funding can often result in greater institutional autonomy. In this section we review where
universities are gaining greater financial autonomy and explore some of the alternative ways they
are being financed � whether through the state, students and parents, or third parties.
Universities receive their funds from a variety of sources, including the following:
� Allocations for teaching from government (or for teaching and research
combined)
� Research allocations or grants for research projects from a range of
government sources
� Tuition and other fees from domestic and international students
� Income generated from research contracts, teaching contracts, consultancy
services, or royalties
� Surpluses from on-campus services such as conference facilities offered to
staff, students, and the general public
� Income from endowments, gifts, and investments
The distribution of sources of income and volume varies hugely within and between countries.
For example, most developing country universities will receive well over 90 percent of their
income from the state's allocation for teaching. Their tuition fee income will be negligible. Yet,
even within some developed countries those institutions with little research activity will also be
heavily reliant on two main sources of income � grants from the government or buffer body, and
tuition fees. At the other extreme, in some developed countries public universities will be able to
generate a significant proportion of their income from research contracts, teaching projects and
other income generation activities so that the state only provides 20 to 25 percent of their total
funds.
28
States are changing the way they manage their tertiary institutions financially in two areas: in
how they allocate funds and in how they exercise financial control and monitoring.
Resource allocation
Governments use at least five methods to allocate resources to universities for teaching, and
sometimes use a mix of them:13
� As part of the civil service budget -- Where the university is treated as a
government agency and its academic staff are regarded as civil servants, the
mechanisms will follow those for the rest of the public sector with ministers
approving estimates and resulting payments for salaries etc. made directly
from the ministry of finance.
� Annual negotiation -- If universities are more independent entities, they may
enter annual budgetary negotiations with their ministry and reach agreement
on their funding based on a round of face-to-face discussions. In the absence
of any formula, this model usually involves adding (or subtracting) a
percentage to last year's allocation.
� Formulae per student -- The ministry may wish to avoid this negotiation
process each year and develop funding formulae per student, usually based on
a previous year's national average costs. These may also be based on targeted
costs if the ministry wishes to achieve economies by lowering the cost per
student.
� Performance-based funding -- Increasingly, an element of funding is based on
outcomes or performance; the most common example of this is where part of
the grant is linked to the numbers of students completing and graduating,
rather than the numbers being taught. The logic is that this rewards success.
Universities will receive no funding for those students who fail to complete or
pass their exam.
� Competitive bidding -- A final model being adopted is where governments
have specific policies they wish to encourage. The ministry or buffer body will
establish funds for specific purposes (e.g., the advancement of e-learning and
13For much more detail on these methods and how they can be directly related to policy objectives see Salmi, J and
Hauptman, A (2006).
29
the development of estates strategies) to which institutions will bid
competitively. Only the best bids will receive funding.
The trend is for teaching funds to be allocated on a per capita basis with variations in the sums
relating to the subject, the mode of delivery, and the level. Thus, the formula figure for a part-
time undergraduate student in humanities would be very different from that of a full-time
postgraduate in chemistry.14 The different sums are then aggregated to create a lump sum, which
is allocated to the institution as a block grant. The Czech Republic has adopted this model since
1992, although it also retains at least 10 percent, which is awarded competitively to institutions in
response to their bids for projects that meet national policy priorities. In England these "top
sliced" specialist programs represent a similar proportion; however, there is pressure to reduce
them because institutions resent the burden of continual competitive bidding. As a response some
of these policy-oriented funds are allocated formulaically with the core allocation.
Despite the English experience, which has been caused by a particularly large number of
invitations to bid competitively for relatively small funds, the use of the competitive grant
principle allows the funding body to reward those institutions that are responsive to policy
priorities. Such funds can also be linked to institutions' effectiveness in implementing particular
long term strategies favored by government.
In the majority of countries the per capita allocations are based on the student enrolments of the
previous year and the formulae used are transparent to all. However, some European countries
have pioneered allocations that are based on outputs and results, and not on inputs to the system.
In the Netherlands, 50 percent of the teaching allocation is based on the number of degrees
awarded, and in Norway, 25 percent of the funds are related to factors such as the student credits
completed and the number of graduates. There are no national systems which allocate teaching
funds wholly on the basis of outcomes or results.
Other features of the funding methods developed recently in OECD countries are as follows:
� The separation of funding for teaching from that for research and the
development of peer review systems for funding research (New Zealand)
14In Australia for example the allocations per student for 2005-06 were A$2,481 for an economics student, A$4,180
for one in Humanities, A$9,091 for Languages and A$12,303 for engineering.
30
� A mixed formulaic and qualitative approach to allocating research funds
(Norway)
� The allocation of resources for three years, so that institutions can plan with
some certainty (Australia)
� A distribution of funds that match the contributions that universities obtain
from third parties, to reward success in external income generation
(Switzerland)
� The use of a formulaic approach to allocating funds for capital developments
(England)
A widely adopted approach is that the sums finally decided on (by formula or other means) are
awarded as a lump sum (or "block grant"). This means that the institution is not subject to any
detailed "line item control" and has total freedom to decide how the lump sum shall be spent.
Appendix IX presents a typology of alternative mechanisms currently in use for allocating
teaching funds to universities.
Financial monitoring and control
There is a considerable gulf between the financial management required from the state in a
system of centralized control and one where full financial autonomy has been granted. A control
model requires more significant staffing in the MOE. Table 2 below (Different Approaches to
Financial Control) illustrates what the extreme positions might be as regards financial control,
ranging from autonomy at one end of the spectrum to central control at the other.
The disadvantage of centralized control systems is that they rely on the centre operating
extensive, time consuming processes of approving, and vetting planned expenditure in
institutions. Inevitably this is cumbersome, unresponsive, and inefficient in that it reduces
flexibility and gives no incentive to institutions to manage resources well. As higher education
systems expand, it also becomes unsustainable in terms of public sector workload and staffing.
31
Table 2: Different Approaches to Financial Control
Topic Centralized Full
control autonomy
Agreed by the Board (but
Annual budgets Agreed in detail by MOE or the
funding body possibly reported to MOE or the
buffer body)
"Line item control" so that Total freedom to allocate and
Expenditure institutions cannot switch expenditure spend as required within the
between the agreed budget headings overall total grant or budget
awarded by the MOE.
Under-spending at the Freedom to carry forward under-
end of an accounting Surrender of all under-spent sums to spending (and to absorb any over-
period MOE/ministry of finance spendings from future funds
within limits)
External earnings from Surrender to the Ministry of Finance Freedom to retain and spend
non-government sources or MOE of all external earnings freely all sums earned from non
government sources
Tuition fees for
domestic "local," Fees cannot be charged or, if they are, Fee levels can be set freely and
domestic "out of state," have to be set at a fixed rate and then the money retained without
and international surrendered to the ministry of finance affecting the budget allocation
students from the government
For those institutions with full autonomy through a block grant allocation of funds an essential
corollary is that they are expected to supply their funding body with reliable and prompt reports
on how the money has been spent, as well as other statistical returns related to performance and
outputs. This represents a move away from the principle of the MOE reviewing planned
expenditure in advance and relies on the financial probity of the institution to follow its budget
plans and record its expenditure accurately. Mature systems such as those in Australia or the U.K.
are able to rely on financial reports once a year, but with a provision for more frequent reporting,
if an institution is thought to be facing financial problems. One model is for the funding body to
require three year financial forecasts of operations and cash liquidity at the same time as annual
reports on performance. These cash predictions are sometimes aggregated and used by the
funding body to portray the overall financial health of the sector.15
The state needs to feel confident in the ability of universities to manage their own financial
affairs effectively before it can delegate full financial autonomy to the board of the institution. It
could well adopt the approach described earlier in Appendix VII. A sound governance structure
15In England the funding body expects that institutions will make an operational surplus of 3 percent after charging
depreciation and there is an absolute requirement that the institution is solvent at all times. The former target is
frequently missed and this may trigger an investigation.
32
is, therefore, a pre-requisite for a fully devolved system, as are reliable information systems and
suitably qualified professional staff.
As well as requiring information and financial accounts, the state has other means of holding
institutions accountable:
� Through requiring independent external audit of their accounts and an annual
report on internal audit activities;
� Through the use of the state audit service to investigate any activity in the
institution;
� Through whatever mechanisms and processes have been established for
reviewing the quality of teaching;
� Through requiring the submission of strategic plans or other strategies (e.g.:
academic, information and communication technologies (ICT), human
resource, property) to the funding body; and by
� Specifying that the board of the institution shall include external members
with experience of financial management, and that there shall be appropriate
arrangements for internal audit.
The ultimate sanction that the MOE holds over any tertiary institution is to instruct the buffer
body to withdraw public funds and to remove the power to award degrees.
The change to a system where the central ministry of finance loses control over the internal
resource allocation decisions made by individual universities has caused tensions in some
transition countries. Traditionally, fears have centered on the sums spent on salaries and the
recurring liability that this might present to the state's finances. In a fully devolved system this
issue is resolved by making institutions wholly responsible for balancing their budgets and
making staff reductions if necessary.
The issue of corruption is becoming a significant concern across a wide range of university
activities, from bribing academic staff and waiving of entrance standards to mishandled
procurement and intervention in academic promotion.16 Governments will hope that a
combination of effective academic audit, internal quality enhancement, internal audit, and
16It is indicative of the growing concern that the Boston College Center for Higher Education has established a
Higher Education Corruption Monitor Service to disseminate news and research about corruption in universities
throughout the world. See http://www.bc.edu/bc_org/avp/soe/cihe/hecm
33
independent external audit should be enough to remove the most extreme cases of corruption.
However, the Internet is making many forms of fraud and plagiarism easier, and technology is
not providing a perfect technical solution to eliminating opportunities, beyond the specialized
websites and software to track plagiarism. There is a risk that the fear of corruption will
encourage governments to retain powers and controls that they might otherwise have delegated or
removed. The question becomes one of balance between the benefits from encouraging initiative
and entrepreneurialism in institutions, against the risk of there being the occasional fraud or
corrupt transaction.
The management of property assets
A feature of systems with greater institutional autonomy is the extent to which central restrictions
over property are removed. If full financial autonomy is granted to a board and the ownership of
the university's assets is transferred to its control by the state, this opens the way for the board to
use the assets as it sees fit to generate income. In some countries this flexibility has allowed
institutions to find imaginative uses for land, such as developing science parks on vacant land and
investing in income-generating facilities (for example, hotels, conference centers, or shops).
Property transfer is an area where the state is often reluctant to hand over total control, fearing
misuse or misappropriation. Some of the controls that are usually exercised on property activities,
and which serve to alleviate these fears, are as follows:
� To ask institutions to prepare property strategies showing how they intend to
use (or develop) their property portfolio
� To retain the right to approve any sale or transfer of property assets (above a
certain financial ceiling)
� To require institutions to confirm that any financial proceeds from the sale or
transfer are spent on higher education (which principle may also be enshrined
in the legislation establishing the university)
� To require institutions to submit a post implementation review of any major
capital project
The same principle applies when an institution decides to use its academic equipment to generate
income from, say, commercial testing. The board is expected to make sure that the surpluses from
such practices are used for educational purposes and that the activity does not prevent or hinder
34
normal academic operations. The income and expenditure relating to this must be audited and
declared in the university's published accounts and the funding body is not expected to make any
deductions from its allocations. In other words, institutions have an incentive to use their assets to
generate income for higher educational purposes.
Once an institution is given full autonomy over its assets, it can explore various avenues (other
than the state) for the funding of property construction or acquisition. This opens the way to
using a variety of funding sources, as well as funding from the state:
� Borrowing on a long-term basis from commercial banks, which requires that
assets are charged as security for loans or bonds
� Private endowments from alumni and other benefactors
� Retained surpluses from the annual accounts, as well as the funds arising from
depreciation on university assets charged in the accounts
� Grants from charities or foundations
� Long-term contracts with private sector organisations in which they build,
operate, and maintain student residences and recover the costs from charging
students rent
� Joint ventures with the private sector, in which for example, the ground floor
might be used for commercial lettings to shops and the upper floors for
university teaching or office accommodation
Income generation
One advantage of reducing financial controls is that universities now have an incentive to
generate income from their people and their assets. Profits do not have to be returned to the state
(and can be shared with the community); surpluses can be accumulated and disposed of as
institutional leaders decide. In the longer term, all institutions hope for a virtuous circle in which
the share of income from non-government sources will rise, giving an institution much needed
flexibility to allocate or reinvest the money it has earned. If this aspiration is to be achieved, it
may require some cultural and process changes. In some universities the idea of income
generation being a basic role for academic staff is seen as selling out to managerialism, while in
others, once an entrepreneurial culture has taken root, income generation is a core activity that is
not seen as threatening to academic freedom, but rather as positively beneficial.
35
Achieving a transformation of this kind could take a considerable time. It would also need to be
underpinned by incentives such as reward (and possibly promotion) systems for work of this
kind, as well as administrative support for external income-generating activities such as
consultancy or international project work. The institution will have to develop policies covering
issues such as sharing of income earned from external sources and pricing policies for particular
types of academic service.
Few corporations or individuals will eagerly make donations to institutions that they see as
wholly funded by the state. However, once an institution has gained some independence, the
situation seems different. Endowments from wealthy individuals or corporations can be obtained
for purposes such as scholarships to poorer students, funding of specific chairs for professors or
the construction of major buildings.
In the United States and Canada there is a culture of regular giving by alumni, and it has been
estimated that the total of U.S. private college endowments amounts to $222 billion, half of
which is held by an elite three dozen institutions. Fund-raising to build up these endowments can
absorb a large part of a university president's time, but this is seen as a small price to pay for the
independence and flexibility gained through having independent assets. Fund-raisers find that it
is easier to attract donors if there is a specific purpose or project in mind for the funds, and many
donors are drawn by the idea of having a building or a scholarship fund named after them in
perpetuity.
Some governments are keen to encourage universities to boost these endowments, since in the
long term they will reduce the call on the state. However, they are also keen not to be seen to
reduce their funding just because a university has been successful in raising its own endowments.
The government of the Hong Kong, China launched two matching grant schemes in which it
matched dollar for dollar the private gifts that universities managed to win from private sources
(Hong Kong University Grants Committee 2006). Both schemes were rapidly oversubscribed
and the government believes that it has kick-started a philanthropic culture.
Once a university is confident of its financial stability and competence, it may even consider
raising funds in the financial markets through bonds. In some developed countries institutions
submit themselves to financial scrutiny by international credit agencies in order to earn favorable
credit ratings and better terms in financial markets.
36
4. Governance of Public Institutions
Once the higher education legislation has defined the role of the state and the powers of
institutions, the question arises how much detail should be specified in the law as to how
institutions should be governed. What are the essential governance issues and what is the role of
government in overseeing the way public universities govern themselves?
This section covers the powers of the board, the appointment of its chair and its composition, and
then the appointment of a president. It concludes by reviewing academic governance and the
extent to which the state can or should encourage good governance.
Powers of the Board
It is usual for higher education acts to define the powers of the board of a university very broadly
as being the supreme governing body of the institution accountable to the minister for its
successful operation. Once this framework has been set, the detailed powers of the board are then
confirmed in university statutes and regulations, and will follow whatever guidelines on
autonomy have been made in respect of the key functions, such as those cited in Appendix VI.
A key principle is that the role of the board is limited to strategic management and that it will
need to create a sub-structure of committees to oversee the operational tasks delegated to others.
In some countries attempts are being made to codify exactly what the role of the board is by
setting out codes of practice and statements of primary responsibilities.17
Legislation commonly defines the status of the president as the chief officer of the university
with accountability to the board for the way the university is run. The president has total
discretion to create whatever management structure he or she wishes (although board members
may wish to participate in selection interviews of candidates for the most senior posts).
Selection of the Chair and Members and Board composition
Appendix X describes some characteristics of university boards in selected countries. Their size
and composition is increasingly a concern of government and there has been a general trend in
favor of a managerial model with a smaller number of members and a majority of external non-
academic (lay) people. The trend to reduced size is strongest in Denmark where a maximum of
11 members has been recommended (Denmark Ministry of Science Technology and
17The most well known of these is that produced in the U.K. by the Committee of University Chairmen in November
2004; Their Code of Practice states that the governing body shall adopt a Statement of Primary Responsibilities.
37
Development 2003). In Australia and New Zealand governments have suggested a maximum of
12, or even 8, members of the board. Tanzania has suggested between 11 and 21 members with
up to 80 percent appointed from external sources. In England, the newest universities created in
1992 must, by law, have between 12 and 24 members, but at least half the members must be
external people. In Denmark and Norway, the board must also have a majority of external
members.
The method of selecting board members varies greatly, as Appendix X shows. In European
countries, other than the U.K. and Ireland, external Board members are often appointed by
ministers, but names of candidates are usually put forward by the universities themselves. In
Sweden and the Netherlands, government appoints the chair and the members for three year
terms. France has a system of wholly elected representatives from various constituencies in each
of its three university councils; the state has no say. In Australia, some universities have one or
two members appointed by their state parliament and the government recently sought to extend
this to all external members, but the proposal was dropped in the face of strong opposition from
the vice chancellors. For Ireland and the U.K. the position is that the board is completely free to
select both its chair and its members without even having to inform the MOE.
Since the position of board member is usually unpaid and the duties (and legal obligations) are
becoming more onerous, some countries are advertising in order to obtain candidates of the right
quality and professional skills. In Australia, recent higher education legislation has decreed that
each board should have a professional development program for its members.18 The Code of
Practice in the United Kingdom specifies that "opportunities for further development for all
members of the board are provided regularly in accordance with their individual needs"
(Committee of University Chairmen 2004). In countries where the board can choose its members
the aim is to have people from the obvious stakeholders such as the regional government or
municipality, local employers and industries as well as the core professionals such as lawyers,
accountants and ICT specialists. It is increasingly emphasized that board members are not to act
as representatives of any particular interest group or subset of staff; their loyalty is to the
university and they must approach decision making "in the interests of the institution as a whole,"
with no vested or factional interest in mind.
18This is part of a useful set of "National Governance Protocols for higher education institutions," Annex I from the
Australia Ministry of Education Science and Training (2003). Our Universities Backing Australia's Future.
Commonwealth of Australia. http://backingaustraliasfuture.gov.au/policy_paper/policy_paper.pdfsee
38
Appointment of the President
When governments delegate powers to a university board and its president, as the chief executive
officer, they have an obvious interest in ensuring that the chair of the board and the president are
appropriate and competent persons. These appointments are made in various ways, as the
following table shows:
Table 3: Ways in Which Presidents are Appointed
By the By By By
ofhead a the election
state minister board
Appointed Appointed
direct with no direct with Sole right By senate
consultation no consultation of appointment members
Appointed Appointed Recommends By all |
after consultation after consultation a shortlist to academic
minister staff
Approves By all
selection Recommends academics and
of the board or one candidate nomination
senate/academics to minister passed to minister
for approval
Selects one Government
from shortlist representative
sent by board sits on board
and helps to select
In Japan, Korea, and Turkey the president is elected by the academic staff of the institution or the
senate, but the nomination requires the final approval of the government. In many East European
countries rectors are elected by the senate without any central approval being required, but three
European countries (Austria, Denmark, and Norway) have recently moved from the system
where academic staff elected the rector to one where the board now makes the appointment, in
recognition of the managerial skills now required in the post holder. This is in line with the
general international trend, which is acknowledging the importance of management competence
and experience, as well as academic credibility.
Where the Board makes the appointment, it must then hold the president accountable for
performance in managing the university. The methods used to do this are not described in
legislation, but tend to follow management good practice by establishing performance targets and
measuring success against them. It is the role of the chair of the board to undertake the annual
39
performance review, to which performance related pay and bonuses are sometimes linked. In
Japan the usual situation is reversed in that as a result of recent reforms the governing body is
under the control of the president who is all powerful.
The thrust of recent international structural reforms is that the board and the president are gaining
extra powers and are being urged by governments to become more managerial in running their
universities.
Legislation on universities usually defines the president as the principal administrative officer
with responsibility to the board for the effective operation of the university. In some countries
this has required a strengthening of the president's executive powers where the tradition had been
one of a senior professor elected by peers for a short term in a non-managerial environment. The
Anglo-Saxon model allows the board and the vice chancellor/president to decide what senior
posts are needed at pro vice chancellor/vice president level, and consequently there is a wide
range of organizational models with up to five subordinate post holders on a variety of tenures �
part-time, full-time, permanent, short term contract, etc. In the Netherlands, however, the
executive board has only three members, and in Austria there can be up to four vice-rectors. It is
unusual for the legislation to specify how many vice-rectors institutions must have, as
circumstances will vary.
The role of the senate or academic council has been traditionally restricted to academic affairs
with an acknowledgment that its authority on academic issues could override the governing body.
However, this core principle is changing in some countries. The board is becoming pre-eminent
with senate subservient to it; the usual reality, however, is that a board would have difficulty in
challenging an academic proposal that had the strong backing from senate, except on overall
strategic or financial grounds.
The role of the state in the governance of private institutions will depend on the number and
status of such institutions in the country. The state will undoubtedly wish to set protocols or
regulations concerning the right of private institutions to the university title and their powers to
award degrees.19 Beyond this (and the checks on governance that may be included in the approval
process), the state may decide not to have a role. Where governments have decided to involve
19A recent comprehensive example is the Australian National Protocols for Higher Education Approval Processes
(2000) which are applicable to both public and private institutions.
http://www.dest.gov.au/sectors/higher_education/policy_issues_reviews/key_issues/MCEETYAS/
40
themselves in the details of private university governance, it is usually in matters such as
reviewing the role of the founders vis-�-vis the president or setting a financial cap on the sums
that can be drawn as profit.
The search for "good governance"
It is unusual for the state to take a direct interest in the detailed way that universities are
managed, except for the retention of the power to audit the way funds are disbursed. However,
two other forms of intervention are as follows:
� A requirement to conform to codes of governance "good practice"
� Regular provision of advice and guidance on good management, backed
sometimes by extra funds encouraging universities to comply
The three countries that have led the way with guidance on good university governance are
Australia, Denmark, and the United Kingdom. In Australia, a set of protocols on good
governance is almost a mandatory requirement and, if they are followed, universities will gain
extra funding. In the U.K., a similar document called the Statement of Primary Responsibilities
has been drafted setting out what the prime roles of the governing body are expected to be. This
has been prepared by a body comprising the chairs of governing bodies at the request of
government. The document is therefore voluntary, but universities are expected to comply and
give their reasons if they have not done so. Appendix XI shows the overlapping content of both
the U.K. and the Australian documents. In Denmark, a committee set up by the appropriate
minister has produced "a number of appropriate principles for discussion by the future members
of university boards, which have concentrated primarily on the function and role of the board of
the university" and not detailed guidelines or codes (Denmark Ministry of Science Technology
and Development 2003).
The second way governments seek to influence the manner in which universities are governed
and managed is by funding improvements on systems (such as the development of management
information systems and e-learning), and by issuing good practice guidance (on issues like risk
management or estates management). Here again the main exemplars are Australia (through all
the publications of the Department of Education Science and Technology) and the work on
41
leadership, governance and management at the Higher Education Funding Council for England.20
If the principle of institutional autonomy is accepted, it could be argued that governments have
no right to tell institutions how they should manage themselves. Thus, apart from an obligation to
ensure that any public money is properly accounted for (and audited), the state might feel that it
should not intervene. Australia and the United Kingdom think differently and believe it is one of
the roles of government to do all it can, short of direct intervention, to help institutions to govern
and manage themselves effectively.
20See the Publications page of DEST at www.dest.gov.au/sectors/higher_education/publications_resources/ and for
the CUC Guide see www.hefce.ac.uk/lgm/governance/ or www.shef.ac.uk/cuc/pubs/html
42
5. Conclusions
The reforms in higher education governance in recent years are driven by the same external and
internal pressures and are largely following the same pattern. They tend to have the following
elements:
� Legislation that establishes universities as autonomous independent entities
� Withdrawal of the state from certain detailed control and management
functions and the devolution of responsibility to universities themselves
� The creation of buffer bodies or agencies to carry out some of the detailed
financial control and supervision functions in the sector or to provide sector-
wide services
� Adoption of funding models that give institutions greater freedoms and that
encourage them to develop new sources of income
� Creation of external agencies that monitor the quality of all courses delivered
by institutions
� The development of new forms of accountability through reporting on
performance and outcomes in achieving nationally set goals for the sector, as
well as institutionally set targets
� Confirmation of the role of a university board as having overall responsibility
to the minister or the buffer body
� Gradual withdrawal of the state from decisions on the appointment of the chair
of the board or president and members of the board
� Expectations of managerial competence by the board and the president
The resulting changed environment presents challenges both to the staff in the MOE and to those
in institutions. The move from control to regulation/supervision requires new models of working
at the centre; the acquisition by boards of overall responsibility for results necessitates different
styles of decision making and new structures within the institution. Making the reforms work
involves new skills and is not always achievable overnight.
The benefits of these reforms are significant as they will unlock initiative and talent within
institutions and will encourage them to develop closer working relationships with all their
stakeholders. This will lead to more relevant programs and services that meet local and
43
community needs. The quality and relevance of the higher education that is being delivered to
students can only be strengthened as a result.
44
References
Australia Ministry of Education Science and Training (2003). Our Universities Backing
Australia's Future. Commonwealth of Australia.
http://backingaustraliasfuture.gov.au/policy_paper/policy_paper.pdf
Committee of University Chairmen (2004). Guide for Members of Higher Education Governing
Bodies in the UK.
http://www.hefce.ac.uk/Pubs/hefce/2004/04_40/04_40.pdf
Denmark Ministry of Science Technology and Development (2003). Recommendations for
Good University Governance in Denmark.
http://videnskabsministeriet.dk/site/forside/publikationer/2004/anbefalinger-for-god-universitetsledelse-i-
danmark/recommentilweb.pdf
Economic Review Committee (2003). "Developing Singapore's Education Industry."
Government of Singapore.
Fielden, J. and Richardson, G (1998) Measuring the Grip of the State. CHEMS/ACU London.
Government of Sri Lanka. (forthcoming) Universities Act 2004.
Government of Tanzania (2005). Universities Act, No 7 of 2005. Dar es Salaam.
http://www.parliament.go.tz/Polis/PAMS/Docs/7-2005.pdf
Hong Kong University Grants Committee (2006). Results of the Second Matching Grant Scheme
for the UGC-funded sector announced. Press Release, March 11, 2006.
http://www.ugc.edu.hk/eng/ugc/publication/press/2006/pr110306.htm
Ireland Office of the Attorney General (1997). Universities Act. Irish Statute Book. Dublin.
http://www.irishstatutebook.ie/1997/en/act/pub/0024/index.html
Joint Committee on Higher Education (2000). National Protocols for Higher Education Approval
Processes. Commonwealth of Australia.
http://www.dest.gov.au/sectors/higher_education/policy_issues_reviews/key_issues/MCEETYAS/
Neave,G. and van Vught,F.A.(1994) Government and Higher Education Relationships Across
Three Continents. Oxford. Pergamon Press.
New Zealand Tertiary Education Advisory Commission (2000). Shaping a Shared Vision: Initial
Report of the Tertiary Education Advisory Commission. Government of New Zealand.
Pakistan Ministry of Education (2002) Report of the Task Force on Improvement of Higher
Education in Pakistan: Challenges and Opportunities. Government of Pakistan.
Pakistan Tertiary Education Commission. (2005). Medium Term Development Framework,
2005-10. Government of Pakistan.
45
Republic of South Africa (1997). Higher Education Act 101 of 1997,
http://www.acts.co.za/ed_higher_ed/higher_education_act.htm#higher_education_act_1997.htm
Salmi, J and Hauptman, A M (2006) Innovations in Tertiary Education Financing: A
Comparative Evaluation of Allocation Mechanisms. World Bank.
South Africa Department of Education (1997). A Programme for the Transformation of Higher
Education (Education Draft White Paper 3). Government of South Africa.
South Africa National Commission on Higher Education (1996). An Overview of a New Policy
Framework For Higher Education Transformation. Government of South Africa.
Tanzania Ministry of Science, Technology and Higher Education (1999). National Higher
Education Policy. Government of Tanzania. http://www.tanedu.org/nationalhigheredupolicy.pdf
UNESCO. (2005). Guidelines for Quality Provision in Cross-border Higher Education. Paris.
http://unesdoc.unesco.org/images/0014/001433/143349e.pdf
United Kingdom National Committee of Inquiry into Higher Education (1997). Report of the
National Committee of Inquiry into Higher Education (also known as the Dearing Report).
London: Crown Copyright.
Virginia Secretary of Education (2008). The Restructured Higher Education Financial and
Administrative Operations Act. Commonwealth of Virginia.
http://www.education.virginia.gov/Initiatives/HigherEducation/Restructuring.cfm
46
Appendixes
47
Appendix I - Three Recent Higher Education Laws Embodying Reforms
The following table lists the topics covered in three relevant, recent acts or draft acts. An
asterisk in columns 1, 2 and 3 means that the topic is included in that country's act. There
is quite a wide range of practice which is partly due to the history of previous legislation in
each country; for example, Ireland had already created a buffer body (The Higher
Education Authority) in 1971, so that clauses relating to that topic were not needed.
Topic covered in the Legislation 1 2 3
Sri Ireland South
Lanka Africa
(Draft)
Legal preliminaries and definitions of terms used in the act * * *
Objectives of a university *
Functions of a university * *
Describe types and levels of awards that universities may offer with
national recognition of equivalency
Encouragement of credit transfers and international linkages
Establishment of new public universities of all kinds * * *
Note 1
Creation of a registrar of private universities *
Who agrees criteria for registration of a private university and appeal *
mechanism
Regulations for private universities concerning certification, records,
audit
Academic freedom guarantee *
Minister's power to determine HE policy * *
Minister's power to merge or close university institutions * *
Minister's power to allocate funds *
Minister's power to withhold payment of funds *
Minister's right to delegate his powers under the Act *
Functions of a buffer body * Note 2 *
Powers of the buffer body (UGC/Funding Council) to review universities, * * *
publish guidelines, and obtain information from universities
Composition of the buffer body and terms of office of its members * Note 2 *
Appointment of CEO/chair of the buffer body * *
Meetings of the buffer body *
Establishment of an accreditation council *
Definition of the component elements in a university's governance * *
structure
Nomination of a chancellor *
A University governing body and its broad role * *
Composition of the governing body * * *
Appointment and role of chair of the governing body * *
Functions of the governing body * *
Detailed provisions on meetings, the quorum and terms of office of *
governing body members
Visitor (appeal mechanism) *
48
Minister's power to appoint an independent assessor to investigate a Note 3 *
university and report to him/her
Powers to suspend a governing body *
Appointment of vice chancellor * *
Powers and role of the vice chancellor * *
Powers to appoint staff and set levels of remuneration * * *
Note 4
Academic council and its functions * * *
Composition of academic council * * *
Power of governing body and academic council to create sub-committees * *
Note 5
Power of universities to make their own Statutes, regulations and bye * * *
laws (which may need ministerial validation)
Such statutes must set out the need for student unions and say how they * *
report to the governing body
Requirement for faculty boards with specific membership composition *
defined
Role of deans and heads of department and their appointment *
Creation of a university services appeals board and definition of its duties *
and functions.
Powers of governing bodies to determine admissions policies and * *
entrance requirements
Obligation of governing body to produce a strategic plan *
Obligation to establish internal procedures for quality assurance *
Obligation to prepare policies on access and equal opportunity *
Establishment and operations of a universities pension fund *
Preparation of annual budgets for Parliament or the buffer body * *
Power to borrow money against publicly owned assets *
Duty to keep records which shall be subject to financial audit by the state * * *
University powers to set fees and levy charges of all kinds * * *
Obligation to produce and publish an annual report on operations and *
performance for the UGC or minister
Powers to dispose of property * *
Appointment of a registrar *
Appointment of a financial controller *
Establishment of a committee of vice chancellors to advise the UGC *
Relationship of the act to other existing legislation
Notes:
1. The minister may also establish a campus of a university and define its structure, powers and functions.
2. The buffer body (Higher Education Authority) was already established under an Act of 1971.
3. In Sri Lanka the minister asks the UGC to investigate a university if he suspects trouble and can direct
them to take action.
4. Universities can set grades and create posts, but not fix salaries. Appointments have to be made through
the UGC.
5. The draft Sri Lankan Act specifies six committees that each university should appoint.
The three Acts used in the above Table are as follows:
South Africa Higher Education Act 101 of 1997,
http://www.acts.co.za/ed_higher_ed/higher_education_act.htm#higher_education_act_1997.htm;
The Ireland: Universities Act, 1997, http://www.irishstatutebook.ie/1997/en/act/pub/0024/index.html;
Sri Lanka: Universities Act 2004. Forthcoming.
49
Appendix II -Typical Relationship Between National Legislation
and University Statutes and Regulations
The key distinctions are as follows:
1. National legislation must be reserved for the long term strategic framework, as
provisions once made could take a long time to change in future legislation.
2. University statutes are the university's own internal legislation and will need to be
as permanent as possible, since changing them would usually require MOE (or
buffer body) approval. One of the first acts of a new board is to develop the
university's statutes.
3. University regulations are matters that can be changed by the university's board or
academic council each year.
The asterisks in this chart show at what level the topic concerned is covered. Thus, while
the existence of a board is specified in legislation, its exact composition may need to take
regional or special factors into account and will be covered in the university's statutes.
Topic National University's University's
legislation charter and regulations
statutes
Constitutional status of the university as a legal entity (able to *
be sued)
It shall have a board (plus possible guidance on its *
composition)
Specific composition of the board (eg: academic, external, *
students) and powers to appoint new members.
Broad powers and responsibilities of that board and a *
statement on its autonomy as regards academic freedom.
Detailed powers of the board *
Accountability of the board to buffer body/MOE and how it *
is to be exercised
University to be subject to external quality assurance *
arrangements
Powers of the board to appoint its chair and the rector * *
(subject to buffer body/MOE approval?)
Powers of the board to remove the rector *
Board to have powers to create sub- committees *
Board's powers to set disciplinary and conduct rules for staff *
and students
Rector's role and accountability to the board * *
Main board sub-committees and their roles *
Details of all committees, their terms of reference, and their *
composition
Rules for the conduct of business of the board and its * *
committees
Role and powers of academic council/senate *
Powers to approve creation of new academic programs and *
50
courses
Detailed regulations for each course *
Definition of board powers to appoint and dismiss staff * *
Powers to admit students (subject to MOE limits) at various *
levels
Detailed regulations on admissions procedures *
Regulations on examinations *
Powers to award degrees and awards and the circumstances *
under which these powers can be removed.
Powers to own, acquire and dispose of property *
Broad guidelines on financial accountability and submission *
of financial reports
Detailed financial regulations *
Requirements as to audit of various kinds *
Government's powers to intervene in the event of financial *
difficulties or suspected fraud
MOE/buffer body requirement to approve any merger with *
another university body
MOE/buffer body powers to require reports and statistical *
information at any time
Powers to set tuition fees maxima or standards for domestic *
and international students
Setting the level of annual tuition and other fees *
Right of staff and students to organize themselves in *
representative bodies
Control over, and responsibility of, a students union * *
Source: Author's compilation
Note: The 1998 Council of Europe report on the Legislative Reform Program has an Appendix I which follows a
similar approach to the table above by defining what should be regulated at what level.
51
Appendix III - Possible Requirements of Tertiary Education Laws
Relating to Private Institutions
Areas of Regulation
Establishment of new institution
- registration / licensing
- prospectus
- basic safety standards
- norms on facilities, equipment, information and library resources
- norms on teachers (student / teacher ratio, qualifications, full-time status, staffing for e-learning)
- imposed curriculum
- minimum number of programs
- minimum research activities
- commitment to operate a minimum number of years (at least until first cohort graduates)
- prior accreditation
- governance and management structure (board of trustees, academic boards and functions,
appointment and qualifications of leadership, etc.)
- additional provisions for access of foreign private providers (evidence of empowerment to offer
programs on behalf of foreign university)
- time limit to grant or deny authorization to operate
Qualifications and articulation
- authorization to issue degree and/or recognition of degree (locally or abroad)
- credit transfer
Establishment of new department / program
- curriculum requirement
- enrollment policy and rules (admission criteria, number of students)
Financial support from public budget
- direct subsidy
- payment of teachers
- tax incentives and exemptions
- eligibility of students for scholarships
- eligibility of students for loans
- eligibility of students for vouchers
Equity promotion
- minimum number / proportion of scholarships to be offered to low income students
- enrollment targets and quotas
- equal opportunities or quota in staffing
Personnel management
- possibility for public institutions professors to teach concurrently in private institutions
- freedom of teachers and administrative staff to form a union and engage in collective actions
Academic freedom guarantee
Governance
- supervision of appointment of trustees
Source: Compiled by Jamil Salmi and John Fielden (with inputs from Yoshiko Koda and Gwang-
Jo Kim)
52
Appendix IV - Functions of Buffer Bodies
In the table below we show the functions of ten buffer bodies according to the legislation
that created them. The bodies are not necessarily yet performing all these functions for one
reason or another.
Country B C D E F G H I J
Strategic planning
Policy analysis/ problem resolution
HEI mission definition
Academic program review
Budget development/ funding
advice/allocation
Program administration
Monitoring/ accountability
Quality assurance/ standards review
Deciding the total number of student
admissions
Key
F= Nigeria
B= Canada (Manitoba) G= South Africa
C= Hong Kong H= Sri Lanka
D= India I= England
E= Kenya J= Zimbabwe
Source: CHEMS Online Paper no 27. Buffer Organizations in higher education: illustrative examples in the
Commonwealth. 1998. (Modified in 2006)
There are risks in having a buffer body and this explains why some have a short life or why
many of the legislative provisions granting them powers never come into effect. The main
risk from the government perspective is that the body will fail to follow government policy
in making its decisions and in managing the sector. There have been examples of ministers
of education thinking that the buffer body stood in the way of reform and that the MOE no
longer had control of the sector. The key to overcoming this is for the chair and CEO of the
buffer body to have regular close liaison with the MOE on policy matters and to ensure that
the buffer body requires universities to build in national policy guidelines into their own
strategic plans.
The main risk from the buffer body perspective is that the MOE will still intervene in the
funding and management of institutions in response to direct lobbying by rectors and others
in the sector. Should this happen, the buffer body will become sidelined and institutions
will no longer consider themselves bound by its decisions. This situation can also arise if
the MOE loses confidence in the ability of the buffer body to perform its functions. This
risk can also be avoided by regular contact at senior levels between the MOE and the buffer
body in order to ensure that both are consistent and by the MOE exercising self-discipline,
so that it only acts though the buffer body in any dealings with individual institutions. If the
MOE believes that there are problems in any one institution, it must ask the buffer body to
investigate and then put things right.
53
Appendix V - Possible Location of Key Management Functions
Key Functions Can be undertaken by any of the following
of the State Ministry Buffer Specialized Council of Associations
Body Agency Presidents/ and lobby
VCs bodies (e.g.
unions)
Setting the vision and
goals for the HE system X
Agreeing on the size and
shape of system X
Licensing new institutions
(public and private) X X X X
Research on HE policies
and objectives X X X X
Setting HE policies and
objectives X
Agreeing universities'
strategic plans X X
Allocating resources X X X
Allocating resources for
special programs X X
Monitoring university
performance X X X X
Collecting HE statistics X X X X X
Assessing the quality of
teaching X X X X
Assessing the quality of
research X X
Financial auditing X X
Support with governance
and management X X X
Source: Author's compilation
Note: A mark in bold indicates that it is usually considered essential for that function to be performed
by the ministry.
54
Appendix VI - Examples of University Autonomy in Selected Countries
Country
Category Holland United
Kingdom Denmark Canada Malaysia Pakistan
Appointment / dismissal of
VC/president/rector X X X X X
Appointment / dismissal of
professors X X X X X
Academic tenure X X X X X X
Academic pay and conditions X
Students entry standards X X X
Selection of students X X X
Size of enrollments X X X X X
Quotas for special groups X X X X
Language of instruction X X X
Introduction of new courses /
elimination of old courses X X X X
Selection of textbooks X X X X X X
Examination / graduation
standards X X X X
Decision to teach courses at
graduate level X X X X
Research priorities X X X X X X
Approval of publications X X X X X X
Membership and control of
governing council / board X X X
Management of university
budget X X X X
Level of tuition fees X
Part
Approval of income generation
ventures X X X X
Own buildings and equipment X X X X
Ability to borrow funds X X X X X
Note: X means that the university has the power to perform this function autonomously.
55
Appendix VII � Higher Education Information (HEI) Management Capacity Levels
HEI Public Resource Governance and Leadership Financial Management Procurement and Physical Human Resources HEI Performance Measurement
Level Profile Plant Management Management
Line item Legal autonomy granted to the Financial management staff Procurement staff mandate Human resources staff mandate Institutional research staff mandate issued
Competitive grants institution by Government mandate issued by Rector issued by Rector issued by Rector by Rector
Board of Trustees with industry Training of staff Training of staff Training of staff Training of staff
E representation convened ICT infrastructure installed ICT infrastructure installed ICT infrastructure installed ICT infrastructure installed
Rector elected by trustees HEI-wide dialogue on financial HEI-wide dialogue on HEI-wide dialogue on staffing, HEI-wide dialogue on institutional
Strategic exercise begun management procurement and physical incentives, and personnel performance, quality assurance, and
plant management management performance indicators
Line item Strategic planning continued HEI diagnostic report on HEI diagnostic report on HEI diagnostic report on Key higher education indicators agreed with
Competitive grants Incentive systems created financial management physical plant and personnel management and MOE and adopted
Academic strategy and capacity needs and capacity procurement needs with overall staffing needs with Data collection and graduate tracer surveys
curriculum review begun building plan capacity building plan capacity building action plan begun
D Community and labor market Ad hoc financial management Ad hoc procurement capacity Staff-wide dialogue on contract Data reported to a National Information
outreach begun capacity integrated into HEI integrated into HEI central hiring process and merit-based System for Higher Education
MIS system installed with staff central management structure management promotion / tenure-track HEI self evaluation initiated
trained to conduct internal Qualified financial staff in place Adoption of standard bidding system
audit of system documents
Governance roles clarified Qualified procurement staff
Line item Strategic plan adopted Preparation of university budget Establishment and adoption Qualified human resources HEI self evaluation complete
Competitive grants Curricula revised Integration of department-level of robust mechanism for management staff in place Licensure self evaluation initiated and
Management capacity Academic strategy continued treasuries into central HEI handling of procurement Civil service reduction process completed
grants Local community engaged budgeting complaints begun Expansion and refinement of key HEI
Local industry engaged Standardized and centralized Establishment and adoption Competitive contract hiring performance indicators to include local
C Stakeholder responses reflected HEI banking procedures of public disclosure process begun and national targets
in management Segregation of functions in HEI mechanism for contracted Merit-based promotion / tenure-
Development program for finance unit unit rates on major civil track system linked to staff
trustees begins Initial reconciliation of HEI cash works contracts and for performance is adopted by
Governance protocol reviewed accounts prices on major institution
and adopted procurement of goods
Shift line-item financing Performance-based funding Financial management system Procurement planning, Civil service reduction process HEI peer review
to block grants initiated integrated into all departments physical plant investment continued Licensure peer review
Competitive grants Subsequent strategic planning Establishment of internal audit and upgrading as part of Contract hiring process
B Management capacity exercise begun unit HEI budget process continued
grants HEI moving closer to Preparation of auditable Publication of sanctions Merit-based promotion and
Performance-based management capacity required financial reports against poor performance tenure-track system begun
grants in Level A Public disclosure of reports contractors, suppliers, and Faculty selection devolved to
consultants department level
Block grants Successful performance-based Successful annual financial audit Successful procurement Successful human resource HEI accredited
Competitive grants grants by external accounting firm capacity technical audit (by management technical audit Licensure fields accredited
A Performance-based Self-review of Board of Trustees applying international norms external auditor) (by international review panel)
grants completed
Demand-side financing
56
Appendix VIII - Selected Performance Indicators
(That can be used at national or institutional level)
Students Social composition
Number of applications for each place
Overall percentage of international students
Percentage of students retained after one year
Percentage of student entrants who graduate
Percentage of graduates in employment or further study six
months after graduation
Research Scores on a national peer review system
Rise in income from non government sources
Average publications record (or citations) per staff member
Number of commercial spin outs / royalty income
Overall percentage of postgraduates
Staff Staff turnover
Percentage on fixed term contracts
Percentage from other nationalities
Proportion of female staff
Finance/Efficiency Percentage of income from non-government sources
Percentage of total expenditure on salaries
Financial health/efficiency ratios (reserves/solvency etc)
Percentage expenditure on building maintenance.
Source: Author's compilation.
57
Appendix IX - Mechanisms for Allocation of Public Resources to Teaching
Type of Allocation Mechanism Where Practiced
I. Direct Public Funding of Institutions � Countries typically provide public support of institutions to finance: their
instruction, operations and investment expenses, including recurrent expenses and for a variety of specific purposes; and
university-based research.
A. Funding instruction, operations and investment � Countries use a number of different approaches to help institutions pay
for their expenses related to instruction, operations, and investment. These payments generally apply only to public
institutions, although in a few countries private institutions also are eligible for this type of support.
1. Negotiated Budgets � Allocations of public funds negotiated between government The most traditional form of
and institutions are largely a function of historical or political factors, either the funding recurrent expenses,
amount received the year before or the political power of the inst. Negotiated still in effect in many
budgets typically are allocated to institutions either as: countries including:
a. Line-item budgets � Negotiated budgets often are implemented through
line-item allocations to institutions.
b. Block grants � Providing a single block grant to each inst is another way
that negotiated budgets can be implemented.
2. Funding Formulas � Most countries now use some form of formula to allocate
funds to institutions for their recurrent expenses. These formulas vary on the basis
of what factors are used in the development of the formula and what type of
organization develops it. The factors used in determining funding formulas include:
a. based on inputs � The most primitive type of funding formula, based on Once most typical formula,
inputs such as the number of staff or staff salaries at each institution, and still used in some cases,
other more sophisticated measures such as number of professors with a especially in Eastern Europe
PhD.
b. based on enrollments & costs/student � Most funding formulas now are
based on the number of students enrolled and a variety of cost per student
calculations as shown below:
1) actual costs/student � Allocations to institutions based on actual Most traditional form of
costs per student as reported by the institution formula funding
2) average costs/student � Allocations to institutions based on
system-wide average costs per student, usually calculated from
aggregate statistics on spending and enrollments
3) normative costs/student � Allocations are based on the An approach adopted or
calculation of normative costs, using optimal staff/student ratios being considered in a # of
and other standardized efficiency measures countries, including?
a) benchmarking � One form of normative costs in Which countries or states?
which the cost figures and structure are pegged to a
`benchmark' inst.
c. Charge back arrangements � In cases where funding is based on Most countries w/ formulas
prospective estimates of student #s and/or costs, allocations are reviewed based on prospective #s use
mid-year to reflect reality and funding is adjusted charge-backs
d. Priority-based funding � Formulas where adjustments are made to reflect England has taken the lead
national and regional priorities such as critical labor force needs; also in inserting priorities into
referred to as funding for relevance, e.g., a price higher than full cost might its funding formula; selected
be paid to institutions for seats determined to be in high priority fields of US states also make such
study. adjustments
e. Performance-based formula components � Performance measures are Denmark, England , Israel,
built into funding formula, e.g., institutional allocations are based on the and Netherlands base all or
number of year-end completers or degree recipients rather than the number portion of formula on end-of
of students enrolled. year completers or
graduates
58
Type of Allocation Mechanism Where Practiced
f. Student-based allocations� Funds could be distributed to institutions England pays a premium for
based primarily on the characteristics of the students who enroll instead of low income students. Jordan
the more traditional institutional characteristics such as costs/student; this and Palestinian Authority
kind of formula could be referred to as `Supply side' vouchers have proposed student-
based allocation schemes.
g. Organizations developing formulas. Another important consideration in describing formulas is what
kind of group develops the particulars of the formula. Options include:
1) political entities � In most countries politically elected entities
such as chief executives or legislatures design and implement the
funding formula
2) buffer bodies � In a minority of cases, groups known as buffer The Higher Education
bodies develop the formula. These buffer bodies represent the link Funding Council of England
between governments and institutions and are intended to insulate (HEFCE) is a prime
the funding process from excessive political pressures example of a buffer funding
body
3. Categorical Funds � A more traditional form of funding in which certain Title III program in USA,
categories of institutions are designated as being eligible for funds for a specific funds for predominantly
purposes; these funds may often be distributed on a formula basis among the black insts in South Africa
designated institutions
4. Performance-based funding � In addition to performance-based formula funding
components described above, a number of countries in recent years have adopted
performance-based funding mechanisms to fund all or a part of recurrent operating
budgets. Four types of performance-based funding are:
a. Performance set asides- A percentage of funds outside of the basic South Africa; more than a
funding formula are distributed based on a set of performance measures. dozen states in USA,
Typically only a small portion of funds for recurrent expenses are including Missouri, New
distributed on this basis; in a few cases, most funds are allocated on Jersey Tennessee, South
performance measures. Carolina, Ohio,
b. Performance contracts � Regulatory agreements between governments In France, payments are
and systems of institutions or individual institutions in which various made when contract is
performance measures are used to benchmark progress. These contracts are signed, with post-
typically more punitive than incentives as institutions would be penalized evaluation. Denmark &
for not meeting the agreed upon performance-based standards. Austria also use contracts,
Colorado implementing
contracts.
c. Competitive Funds � These are usually funded on a project-by-project Argentina, Bolivia,
basis, typically for the purposes of improving quality, promoting Bulgaria, Chile, Ghana,
innovation, and fostering better management � objectives that are difficult Hungary, Mozambique, Sri
to achieve through funding formula or categorical funds Lanka, USA (FIPSE)
d. Payment for results � A small number of countries now pay for
performance in one of the two ways:
1)Performance-based formula components � discussed above as Denmark, England, Israel &
I.A.2.e the Netherlands
2) Fees for services- Institutions enter into contracts with Colorado implementing
governments to produce certain numbers of graduates and are paid system to pay for each post-
based on whether they meet the contract specifications baccalaureate student
enrolled
Source: Salmi,J and Hauptman, A.M. (2006).
59
Appendix X - Characteristics of Governing Boards in Selected Countries
Country Role of the Board Membership and Role of Academic Role of Chair of Who can be elected Role of Rector/VC/ Who can be
Size of the Board Council/Senate Board or appointed as a President appointed as a
Chair of the Board Rector/VC/
President
Australia Overall responsibility to Up to 24, with Supreme academic Manages the Any non academic � Responsible to Board for Any senior
the funding body for majority of non- body but is Board's business, from business, civil all academic and academic (or
governance of the academics. accountable to the appraises the service etc administrative other suitably
university Board performance of the management qualified person)
Rector (1)
Canada Ultimate responsibility Average size is 27. Senate is Chairs the Board, Usually from Responsible to the Board Any senior
for the management of 25% appointed by responsible for the supports, advises business, the for day to day academic academic (or
the institution, and province, 25% academic direction and evaluates the professions or civil and administrative other suitably
recruiting or dismissing elected, 25% (but is accountable President service. management qualified person).
the VC, but provinces appointed by Board to the Board)
have some powers and and 25% ex officio.
allocate funding Half are lay
members
Denmark The Board overseas the The Board is Academic Council Chairman is elected The rector sees to the day- An acknowledged
interest of the institution composed of a sees to the by the external to-day management of the researcher with
in its capacity as an majority of academic interests members of the university within the management
education and research external members ( of the faculty; if Board and can only framework set by the experience
institution and provides the majority) and there is only one be an external governing board
long term leadership members council at the member of the board
representing the institutional level,
technical and the Board sets up
administrative the councils with
staff, as well as the rector as the
students of the chairperson
university
France Governing Board, agrees Members are Scientific Council Rector/VC chairs Not applicable Directs the university, A senior
four year plan and elected from a recommends the Governing presides over the academic who is
contract with the State number of academic policy Board, the Councils, controls elected by
determines the policy backgrounds changes in teaching Scientific Council finances and is members of the
but still subject to many including external and research to the and the Social responsible for orderly three university
controls from MOE (eg people. Board. Council running Councils
over staff)
Germany Senate carries out No central Either Rector or President Is elected from a
resource allocation. academic body, so (term of tenure differs) senior professor
Many powers still reside faculty or are nominally responsible cadre by an
in the Lander. departmental for managing the assembly of all
councils decide on institution but have staff.
all teaching and limited powers.
research matters
Hungary Senate is the supreme Members are Is the chief academic and A senior member
governing body which elected for three administrative officer of the academic
elects the Rector, but years staff elected by
some decisions subject to Senate
approval by Minister
Indonesia The Board of Trustees Representatives of The Academic
play the central role in a number of Senate is to be
university governance bodies, including elected
the ministries,
academic senate,
academic
community, and
broader society.
This also includes
the rector
Japan (2) Board of Directors Internal and Councils shall Not specified Not specified President is expected to Well qualified
considers the most external members deliberate on be a strong leader with candidates from
important matters before academic courses, ultimate responsibility for inside or outside
the President research, staff the institution, with help the university can
decides.(Each university appointments and from an Administrative be appointed by a
can decides the powers of students and advise Council containing selection
its Board) the President external experts. committee
containing non-
university experts
Nether- Supervisory Board Five external University Council No specified Usually eminent Is the senior academic A senior
Lands approves the strategic members of SB (of c 15) is elected functions other persons from member of the Executive academic
plans and the budget and appointed by the and advisory body than chairing the business or politics Board which has full (but (professor) who
appoints the Executive Minister on the able to comment on Supervisory Board collegial) responsibility is appointed by
Board of three people advice of the strategic plan and for running the university the Supervisory
University Council proposed new Board
regulations
61
Norway Executive Board has 4-5 external Advisory bodies
overall responsibility for members appointed being created under
running the institution by Minister. c.7 a new law,
internal members containing Deans
elected ex officio.
Pakistan The Syndicate is the Size of Board is Senate decides Vice-Chancellor is Vice Chancellor is Can be either an
chief executive organ of 20-25 persons and academic issues of the President principal executive and internal candidate
the university includes academic the university, academic leader of the from the
and non-academic appoints members university university or an
representatives; of the Syndicate external
dominated by and considers candidate.
academics annual accounts Need to be
competent
administrators
and scholars
Sweden Board of Governors has Members and Faculty Boards Chairs the Board, Vice Chancellor (or A senior
overall responsibility for Chair appointed by determine policy in and is appointed by Rector) is the principal academic
all aspects of the Minister (but teaching and Government. Must officer responsible to the appointed by
institution suggested by research in each not be affiliated Board Government on
University) faculty with the institution recommendation
of the Board
Tanzania Council of the university Size of councils Senate of the Chairman of the Vice-Chancellor is the Vice-Chancellor
will be the principal must be between university is the council will be principal academic and has to be a senior
policy making organ of 11-21 members; up decision making selected by the administrative officer of academic
the university to 80% of the organ for academic President of the university
members must be matters Tanzania based on
from outside the the recommendation
university list submitted by the
University
Commission
United Overall responsibility for Recommended Responsible for Chairs the Board Any non academic Is the Principal academic Any senior
Kingdom managing the institution limit of 25 academic policy and reviews the from business, civil and administrative officer academic, but
(3) and appointing the VC members (current and quality, but is performance of the service or and is accountable to the suitable
average c.30) ultimately VC. Government Board. diplomatic,
accountable to the military or
Board. Has 25-150 business people
members have also been
appointed.
62
United Board of In State University Faculty Chairs the Board Chair of the Board is President has overall Usually a senior
States Trustees/Regents has universities Board Senates advise the and reviews the appointed by the responsibility to the academic, but can
(4) overall responsibility for members (c 10-25) President and the performance of the Governor Board for the academic be from
managing the institution, are appointed by Board on academic President and administrative commerce or
but powers vary by State. the State Governor matters. Members management Government.
Usually selects the are elected and
President. vary in number
Source: Author's compilation
Notes:
(1) Senior diplomats, civil servants or military persons have sometimes been appointed Rector or VC.
(2) This is based on a National University Corporation Law in April 2004.
(3) In the U.K., there are two different governance systems for universities for those established before 1992 and those established after 1992.
(4) This is based on state-funded universities, but details vary greatly between States. In general there is a move to delegating more powers to university Boards.
63
Appendix XI - Statements on Responsibilities of the Board in U.K. and Australia
United Kingdom: Statement in Committee of University Chairmen Guide, Australian National
November 2004 Governance Protocol, number. 2, 2005
1. To approve the mission and strategic vision of the institution, long term In paragraph 2 (b) Yes and approve the budget
academic and business plans and key performance indicators and to ensure that and business plan
these meet the interests of stakeholders
2. To delegate authority to the head of the institution, as chief executive, for the In paragraph 2 (c) "Oversee and review the management"
academic, corporate, financial, estate and personnel management of the institution.
And to keep under regular review the policies, procedures and limits within such
management functions as shall be undertaken by and under the authority of the
head of the institution.
3. To ensure the establishment and monitoring of systems of control and In paragraph 2 (e)
accountability, including financial and operational controls and risk assessment and In paragraph 2 (f)
procedures for handling internal grievances and for managing the conflict of
interest
4. To ensure processes are in place to monitor and evaluate the performance and In paragraph 2 (c)
effectiveness of the institution against the plans and approved key performance
indicators, which should where possible be benchmarked against other comparable
institutions
5 To establish processes to monitor and evaluate the performance of the Governing Not in Protocols
Body itself
6. To conduct its business in accordance with best practice in higher education Not in Protocols
corporate governance and with the principles of public life
7.To safeguard the good name and values of the University Not in Protocols
8 To appoint the head of the institution as chief executive and to put in place In paragraph 2 (a)
suitable arrangements for monitoring his performance
9 To appoint a secretary to the Governing Body and t ensure that, if the person has Not in Protocols
managerial responsibilities in the institution, there is an appropriate separation in
the lines of accountability
10. To be the employing authority for all the staff in the institution Not in Protocols
11. To be principal financial and business authority, to ensure that proper books are In paragraph 2 (b)
kept, to approve the annual budget and financial statements and to have overall
responsibility for the university's assets, property and estate
12. To be the institution's legal authority and to ensure that systems are in place for Not in Protocols
meeting all the institution's legal obligations
13. To make such provision as it thinks fit for the general welfare of students in Not in Protocols
64
consultation with Senate
14. To act as Trustee for any property, legacy, endowment or gift in support of the Not in Protocols
work or welfare of the institution
15. To ensure the University's constitution is followed at all times Not in Protocols
Not Included in the U.K.'s Statement 2 (d). To establish policy and procedural principles.
Not Included in the U.K.'s Statement 2 (g). To oversee and monitor academic activities
Not Included in the U.K.'s Statement 2 (h). To approve significant commercial activities.
Source: Author's compilation
65