New report outlines governance challenges facing Australian universities, including underpayments
Australia's universities face new set of principles for governance that aim to address serious issues facing the sector, including employee underpayments.
Education Minister Jason Clare said universities will be required to report annually on their compliance with the new University Governance Principles on an "if not, why not" basis to the Tertiary Education Quality and Standards Agency (TEQSA).
"If you don't think there are challenges in university governance, you've been living under a rock," Clare said in a statement.
"These are important reforms that help make sure our universities meet the standards their students, staff and whole communities expect."
According to the minister, universities will be required to publish:
- Outcomes of meetings and decisions taken
- Consultancy spending, its purpose, value and justification
- Vice-Chancellors' external roles
- Annual remuneration reports in line with requirements for public companies
- Composition of governing bodies
TEQSA will be able to take compliance action against universities that repeatedly fail to meet the principles, the government said.
University Governance Principles
The University Governance Principles, developed by the Expert Council on University Governance, set out the practices essential to good university governance and performance.
Among the principles in the expert council's report is the fair and responsible structure of the workforce and remuneration.
It stated that a university's governing body is accountable for the university's workforce and remuneration strategy.
"The governing body ensures all staff are properly remunerated, that senior management remuneration is aligned with public expectations and sector benchmarks, and that the university has a clear and sustainable workforce strategy," the report read.
It added that the governing body should "require that there are effective systems for staff to be paid in accordance with legal requirements."
"The university must ensure staff are paid correctly and that systems and resourcing for this are adequate and effective," the report read.
"Failing to meet contractual and enterprise arrangements with staff, including through underpayment, is simply not acceptable and poses a material risk to the social licence of the university."
The principle comes after multiple universities across Australia came forward in the past few years to admit underpayments to their employees. Underpayments by Australian universities have reached $382 million as of June 2024, according to the National Tertiary Education Union.
The Fair Work Ombudsman, in its submission to the expert council, underscored that poor university governance processes and systemic issues have been identified in the universities reporting underpayments.
"The FWO observed failures to prioritise compliance with workplace laws, demonstrated by inadequate governing body and audit and risk committee oversight, and an absence of systems to identify compliance risks," the expert council said.
Accepting the principles
Melinda Cilento, chair of the expert council, expressed support for the government's "if not, why not" implementation of the principles.
"I strongly support the Principles and the 'if not, why not' approach to their implementation as the best way to sustainably uplift governance given the diversity of the sector and the rapidly evolving environment in which universities operate," Cilento said in a statement.
"I hope that universities and their leadership genuinely, proactively and transparently adopt the Principles, communicate their priorities and outline how they are proposing to respond to the issues raised through our work."
Luke Sheehy, chief executive officer of Universities Australia, said they will work with the government on the implementation of the principles by states and territories.
"We support strengthening our governance arrangements to help every student and staff member feel safe and supported, and ensure universities continue to meet the expectations of the communities they serve," Sheehy said in a statement.
"We welcome the opportunity for a nationally consistent approach and will work closely with government and ministers on the next steps."
