The impact of governance on the performance of the higher education sector in Australia

Abstract

Australian government concern for improved governance in the higher education sector over recent years has driven the implementation of governance protocols. However, there has been little evidence of any evaluation of the impact of the governance structures on the performance of universities. This paper presents an analysis of the impact of the governance structures on performance in government-funded universities since the Australian National Governance Protocols were introduced in 2004. The methodology involved analysing the relationships between indices of governance structures namely board size, board independence and board committees, and financial, research and teaching performances. Results showed that the board size did not relate to financial, research or teaching performance in any way. In terms of board independence, the more independent the boards, the less impact they had on both research and teaching performances. Financial performances were not impacted. This finding may suggest that boards dominated by internal members rather than independent ones could have a better influence on teaching and research performances. While stronger board committees positively impacted financial and research performances, this was not the case for teaching performance. Board committees showed a negative relationship with teaching performance, suggesting that excessive monitoring may negatively influence teaching quality.