Neither corporate nor government: Why university governance needs to be different, and better

Abstract

Australian Australian universities face a governance crisis rooted in failures of accountability. Unlike parliaments and corporate boards, university councils lack effective mechanisms for principals to discipline agents. In parliaments, voters can replace elected representatives; in corporations, shareholders can vote out directors. Both systems close the delegation–accountability loop, ensuring alignment between principals and outcomes. University councils, however, are self-perpetuating bodies dominated by external appointees, and in recent decades they are typically from corporate backgrounds. As neither producers nor consumers of universities’ core product—knowledge creation and dissemination—they have minimal intrinsic stake in academic outcomes leaving councils detached from the university’s core mission.

This misalignment fosters mission drift, weakens oversight, and contributes to repeated scandals. Because councils largely appoint their own successors, they remain insulated from meaningful scrutiny, unlike boards or parliaments where underperformance is sanctioned externally.

Restoring accountability requires giving academic staff and students a renewed oversight role, alongside clear safeguards for the public interest. Because academics and students are both producers and consumers of knowledge, they have a direct and enduring stake in its quality. We recommend two mechanisms to do this are: 1. Academic Senates empowered to appoint and review council members, ensuring councils reflect the university’s purpose. 2. Robust Committee Systems that embed staff and student voices in decision-making, reduce information asymmetries, and align incentives with academic purposes.

Without such reforms, universities will continue to drift, governed by self-insulating leaders and their agents rather than those invested in knowledge and learning. Show more