Chapter 2University governance in Australia
2.1According to the Tertiary Education Quality and Standards Agency (TEQSA), there are 212 providers of higher education in Australia, with 44 of these being universities. Of these, 39 are public institutions and five are private providers. Australia's higher education providers deliver education to more than 1.6million students.
2.2Providers range in size from small independent providers with fewer than tenstudents to large public universities with more than 85 000 students. Those listed as Table A providers under the Higher Education Support Act 2003 (HESA) receive significant public funding, while others are financially independent.
2.3This chapter provides an overview of university governance in Australia and the regulation of higher education providers, including:
university funding in Australia;
university governance in Australia;
regulation of Australian universities;
the Commonwealth regulatory framework for universities; and
other key regulatory and stewardship bodies.
University funding in Australia
2.4Australia's universities are funded primarily through Commonwealth research and teaching grants and student fees supported by a Commonwealth-backed loan scheme. Funding is also sourced via state governments, overseas student fees, investment income and income from contract research and consultancies.
2.5The Commonwealth Grant Scheme (CGS) is the biggest single source of government funding for universities. It is allocated based on the number of full‑time equivalent domestic students in Commonwealth Supported Places (CSPs). CSPs are funded by a mix of Commonwealth contributions through the CGS and from student contributions via the Higher Education Loan Program.
2.6Additional grants are provided to higher education providers for disability support, Aboriginal and Torres Strait Islander student support, and support for students from low socio-economic backgrounds. Further to this, a National Institute Program provides support for operations at the institutes, and a Superannuation Program covers certain superannuation expenses for staff.
2.7Figure 2.1, sourced from the University of Melbourne's 2024 annual report, provides an example of the major revenue and income sources for universities.
Figure 2.1University of Melbourne revenue and income categories (2024)
Source: The University of Melbourne, Annual Report 2024, p. 93.
University governance in Australia
2.8Australian universities function under a tripartite governance model, with its specific operation determined by each university's establishing legislation. Broadly, the three elements of this model are:
corporate governance (University Council);
academic governance (Academic Board); and
university management (led by the Vice-Chancellor).
2.9In addition to the Commonwealth, state and territory legislation affecting university governance, the University Chancellors Council (UCC) has developed voluntary codes to help universities improve governance practices. The primary voluntary codes are:
the Code of Governance Principles and Practice for Australia's Public Universities, which contains best practice guidance across a number of domains; and
the Code of Executive Remuneration Principles and Practice for Australian Public Universities, which addresses university responsibilities in relation to senior executive remuneration.
2.10Universities report on their adherence to the voluntary UCC codes as part of their annual reports.
Corporate governance (University Council)
2.11Every Australian university has a council tasked with ensuring effective governance and management oversight. The composition and operation of University Councils is established by each university's enabling legislation.
2.12University Councils comprise between 10 and 21 members, with some members appointed by governments (or state governors), external members selected by the governing body itself, and ex-officio members who are senior staff members, and staff and student representatives who may be elected by their institution.
2.13University Councils generally use skills matrices—such as the one shown in Figure 2.2 below—to ensure they have the range and depth of skills that will allow them to meet their governance obligations.
Figure 2.2Deakin University Council Skills Matrix (as of January 2025)
Source: Deakin University, Submission 33 (47th Parliament), [p. 7].
2.14According to the UCC, University Councils are the 'central authority for decision-making in all aspects of university life', with responsibility for:
… oversight of the university mission, strategy, financial sustainability, commercial and legal obligations, risk frameworks, and the overall delivery of outcomes for the public good.
2.15They are supported in their work by 'audit and risk management committees that are responsible for maintaining the highest standards of governance and oversight'.
2.16In addition to audit and risk committees, universities may establish other committees to allow for detailed oversight of university governance functions. For example, the University of Wollongong (UoW) has established several committees, including:
Finance and Infrastructure Committee—oversees the UoW's financial and infrastructure strategies;
Risk, Audit and Compliance Committee—oversees risk management and risk assessment across the university;
People and Culture Committee—oversees workforce strategies relating to human resources, culture and health and the safety and wellbeing of the university community;
Program Control Board—provides oversight and guidance for UoW's transformation program;
Performance and Remuneration Committee—reviews the performance and remuneration of senior executives;
Nominations Committee—panel for the shortlisting and recommendation of Ministerial appointments to council and for appointments by council; and
Honorary Awards Committee—advises on the awarding of Honorary Fellowships and Doctorates, the title of Emeritus Professor and the award of Community Fellowships.
2.17Day-to-day operational functions of universities are often delegated to university management.
The role of university chancellors
2.18According to the UCC, the Chancellor is the formal head of a university and chairs the University Council, with the relationship between the Chancellor and Vice-Chancellor comparable to the relationship between the Chair of a company board and the company Chief Executive Officer.
2.19In addition to their governance responsibilities, chancellors represent and advocate for their universities. They are also responsible for:
articulating the roles of University Council members—ensuring they are aware of their responsibilities and the expectations of their position; and
in conjunction with the University Council—appointing the Vice‑Chancellor, monitoring their performance, and considering their remuneration.
2.20Chancellors are 'expected to exemplify best practice in governance while working with the university community' and encourage openness, transparency, collaboration and collegiality:
Chancellors who exemplify ethical governance and integrity will actively encourage the collaborative contribution of all members of the governing body—promoting open discussion, transparent decision-making, and a culture of collaboration and collegiality.
University management (led by the Vice-Chancellor)
2.21The university executive, led by the Vice-Chancellor, is responsible for the day‑to‑day operational management of the university (as delegated by the University Council). This includes responsibility for the financial management and sustainability of the university.
Academic governance (Academic Board)
2.22Academic Boards are responsible for 'maintaining academic excellence and management of academic matters of the university', with Academic Board chairs being ex-officio members of University Councils.
Regulation of Australian universities
2.23Higher education in Australia is governed by a 'complex regulatory framework', involving multiple agencies including TEQSA, Commonwealth, state and territory governments, statutory bodies and independent integrity bodies. While not exhaustive, anumber of these agencies are listed in Figure 2.3.
2.24Except for the Australian National University, which is established under Commonwealth legislation, all Australian universities are established under legislation in the state or territory in which they are registered.
2.25Among other things, a university's establishing legislation creates reporting requirements in relation to work health and safety, financial accounting and audit, and workplace relations.
2.26Other legislation, such as the Public Governance, Performance and Accountability Act 2013 (Cth) and the Government Sector Finance Act 2018 (NSW), regulates the annual reporting of information to the relevant Commonwealth, state or territory parliament.
2.27Higher education providers operating in Australia also need to be registered with the national regulator, TEQSA, which ensures compliance with relevant Commonwealth higher education legislation and policy frameworks.
2.28While TEQSA has a primary role in overseeing provider governance, its role intersects with functions of the agencies listed in Figure 2.3.
Figure 2.3Agencies with higher education regulatory responsibilities
Source: TEQSA, Submission 17 (47th Parliament), p. 5.
Commonwealth regulatory framework for universities
2.29A range of acts and standards make up the legislative framework for higher education in Australia. However, in the context of this inquiry, the Commonwealth legislation most relevant to the regulation and quality assurance of the higher education sector are the:
Higher Education Standards Framework (Threshold Standards) 2021; and
Tertiary Education Quality and Standards Agency Act 2011.
2.30The following section expands briefly on these acts.
Higher Education Standards Framework (Threshold Standards) 2021 (HESFramework)
2.31The HES Framework consists of:
Part A – the Standards for Higher Education (Threshold Standards); and
Part B – the Criteria for Higher Education Providers.
Threshold Standards
2.32The Threshold Standards are developed by the Higher Education Standards Panel, an expert statutory advisory body independent of TEQSA. TheThreshold Standards form the basis for regulating Australian higher education providers by establishing the minimum standards a higher education provider must meet and maintain to be registered by TEQSA.
2.33According to TEQSA, the Threshold Standards also:
ensure sufficiently high requirements for entry into the sector to underpin and protect the quality and reputation of the sector as a whole;
establish a baseline for operational quality and integrity from which providers can continue to build excellence and diversity; and
serve broader purposes, including:
articulating expectations for higher education provision in Australia (as a guide to the quality of experience students should expect, a reference for international comparisons, and a reference for other interested parties);
providing a model framework providers can apply for internal monitoring, quality assurance and quality improvement purposes.
2.34As shown in Table 2.1 below, the Threshold Standards comprise six domains.
Table 2.1Threshold Standards domains
| |
- Student Participation and Attainment
| Admission Credit and Recognition of Prior Learning Orientation and Progression Learning Outcomes and Assessment Qualifications and Certification |
- Learning Environment
| Facilities and Infrastructure Diversity and Equity Wellbeing and Safety Student Grievances and Complaints |
- Teaching
| Course Design Staffing Learning Resources and Educational Support |
- Research and Research Training
| Research Research Training |
- Institutional Quality Assurance
| Course Approval and Accreditation Academic and Research Integrity Monitoring, Review and Improvement Delivery with Other Parties |
- Governance and Accountability
| Corporate Governance Corporate Monitoring and Accountability Academic Governance |
- Representation, Information and Information Management
| Representation Information for Prospective and Current Students Information Management |
Source: Higher Education Standards Framework (Threshold Standards) 2021.
2.35Given the diversity of providers across the sector, the standards 'emphasise high-level principles over detailed prescriptive measures'.
2.36Of the seven domains, Domain 6 – Governance and Accountability is most relevant to the committee's current inquiry. As noted by TEQSA, this domain 'establishes the core requirements for leadership, independent oversight, corporate monitoring and accountability, risk management and academic governance'.
2.37Given its overarching nature, a provider's capacity to meet the standards set by Domain 6 (along with Domains 5 and 7) significantly influences TEQSA's confidence in that provider's ability to meet the requirements of the Threshold Standards overall.
Threshold Standards Domain 6 – Governance and Accountability
2.38Domain 6 specifies a provider's accountabilities both as a corporate entity and an education provider. This includes compliance with the other Threshold Standard domains.
2.39While not prescribing a particular governance model,Standard 6.1 requires providers to have a formally constituted governing body, whose members are fit and proper persons, that attends to its 'governance functions and processes diligently and effectively'. This includes defining roles and delegating authority necessary for effective functioning, undertaking periodic reviews of the effectiveness of the governing body, and maintaining true records of its business.
2.40Standard 6.1 also requires the governing body to take action to develop and maintain an institutional environment that upholds academic freedom and freedom of speech, treats students and staff equitably, fosters the wellbeing of students and staff, supports informed decision making by students, and gives students opportunities to participate in deliberative and decision-making processes.
2.41Standard 6.2 requires the provider to demonstrate (and the governing body to assure itself) that the provider is operating effectively and sustainably. Thisincludes:
compliance with the provider's establishing legislation and any other legislation (including Commonwealth and state or territory workplace legislation);
maintaining financial viability of the provider and its business model;
regular financial monitoring and accurate financial reporting;
effective risk identification and management/mitigation;
implementation of mechanisms for competent academic governance and leadership of higher education provision and other academic activities; and
monitoring of formal complaints, allegations of misconduct, breaches of academic or research integrity and critical incidents and taking action to address underlying causes.
2.42Standard 6.3 sets requirements in relation to academic governance, including:
establishing processes and structures that ensure competent advice to the corporate governing body and management on academic matters, including advice on academic outcomes, policies and practices;
effective academic oversight that assures the quality of teaching, learning, research and research training; and
providing opportunities to participate in academic governance.
Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act)
2.43TEQSA was established in 2011 in response to the 2008 Review of Higher Education, which identified the need for 'a national approach to higher education regulation and quality assurance', particularly in light of the development of a demand driven funding model for higher education. This model was deemed to require a more rigorous regulatory approach to ensure delivery of high-quality outcomes for 'students, taxpayers and the nation'.
TEQSA's functions
2.44TEQSA's key functions deal with applications, compliance, and enforcement (see Table 2.2 over). It operates using a graduated enforcement/compliance model that aligns with the TEQSA Act requirement that TEQSA apply a 'standards-based quality framework guided by the principles of regulatory necessity, risk and proportionality'.
2.45While providers are responsible for managing their risk and demonstrating self-assurance in line with the Threshold Standards, TEQSA also provides guidance 'to direct and strengthen quality assurance within providers and to support providers in identifying emerging risks'.
2.46TEQSA's guidance and monitoring activities include publishing guidance notes, delivering training, engaging with providers around regulatory queries, risk-based compliance monitoring, thematic reviews, and targeted roundtables, as well as site visits and targeted meetings.
Table 2.2TEQSA's key functions
| |
Applications | Assessment of applications for: initial registration from entities seeking to become higher education providers in Australia; renewal of registration of existing higher education providers; a change to a provider's registration category; initial course accreditation or re-accreditation from non-self-accrediting providers; and self-accrediting authority. |
Compliance | Continual monitoring via: annual risk assessments across each providers' scope of registration; environmental scanning of provider activities; risk intelligence; concerns and complaints received; and emerging sector risks. |
Enforcement | At this level TEQSA has determined voluntary compliance and conditions are insufficient, and more severe sanctions are needed. Actions taken at this stage include: applying to a court for enforceable undertakings requiring providers to implement corrective measures; applying to a court for civil penalty provisions and infringement notices; and administrative sanctions, including cancelling, shortening or downgrading a provider's registration or accreditation where systemic non-compliance persists. |
Source: TEQSA, Submission 17 (47th Parliament), pp. 6–7 and 19.
TEQSA's compliance and enforcement powers
2.47In situations where TEQSA identifies non-compliance with the Threshold Standards it may:
provide informal resolution through regulatory guidance;
issue a warning letter to place a provider on notice about TEQSA's concerns and the possibility of future action;
enter into a voluntary undertaking where a provider commits to address identified non-compliance within a specified timeframe;
impose conditions on a provider's registration or accreditation;
seek court enforcement of an enforceable undertaking where a provider breaches or fails to comply with an enforceable undertaking;
apply to a court for an injunction restraining a provider from engaging in conduct that contravenes a provision of the TEQSA Act (or requiring a provider to do something in relation to compliance with the TEQSA Act);
shorten the registration or accreditation of a provider where it fails to meet the Threshold Standards or breaches a condition imposed on its registration or course accreditation; or
cancel a provider's registration if it fails to meet the Threshold Standards or breaches a condition of its registration.
2.48Only one Australian University is currently subject to conditions placed on its registration by TEQSA.
Other key regulatory and stewardship bodies
2.49Other key regulatory and stewardship bodies in the higher education sector include the Interim Australian Tertiary Education Commission, the Australian, Skills Quality Authority and the National Student Ombudsman. A brief outline of these bodies is provided below:
Interim Australian Tertiary Education Commission—will have a key role in driving important structural reforms across the tertiary education system. Itcommenced interim operations on 1 July 2025 and will be fully operational by 2026, subject to the passage of legislation.
Australian Skills Quality Authority—the national regulator for the vocational education and training (VET) sector. It regulates providers that deliver VET qualifications and courses in Australia, as well as those providers that deliver courses to overseas students.
National Student Ombudsman—provides a national escalated complaints‑handling mechanism for higher education students. It can consider whether decisions and actions by providers are unreasonable, unjust, oppressive, discriminatory or otherwise wrong.