Corporate style boards in public institutions have passed their sell by date

Corporate style boards in public institutions have passed their sell by date

Jan Rivers, Convenor of public good (publicgood.org.nz), today asked for documents under the Official Information Act so that public good could make public the evidence that the Minister for Tertiary Education, Steven Joyce, used to help him decide that university and wananga boards should be smaller and less representative to be more effective.

“Corporate style boards in public institutions have passed their sell by date,” she said. “Since the State Owned Enterprises Act became law in 1986, New Zealand governments have appointed corporate style boards to manage the trading parts of government. The State Sector Act 1988 uses corporate style management approaches in making Chief Executive appointments to government agencies”. “Today, the Minister has gone further and proposed that corporate style boards should run our universities and wananga, effectively cutting out community, academic and student representation.

“Using corporate style boards in the public sector presents a number of problems. Small boards often lack diversity and, if overall numbers are being cut women and ethnic minority representation will fall as board members are appointed to the normal pale, male and stale pattern.

“Steven Joyce says that smaller boards will lead to quicker and more efficient decision making. Fast efficient decision making without the full diversity of voices would be disastrous in our higher education institutions.

“Academic freedom and quality education are best ensured when diverse voices are represented at the governance table. Australian research identifies that many elements are required, in addition to efficiency, for effective board operation. These are: recognition of the rights of people involved (eg student, academic and community representation) and their opportunity to participate; accountability – both to the institution and the wider community; transparency and openness; integrity; stewardship; leadership; performance; compliance, and inclusiveness.”

“The Minister’s decision to reduce board numbers inevitably means New Zealand’s Tertiary Education system would lose these crucial factors,” Jan Rivers said.

More Information:

• Wikipedia on Corporate Governance
• Problems with the lack of Women on Boards UK report
• Australian Research on board performance University of Canberra

Official Information Act question submitted:

TEC is responsible for funding tertiary education in New Zealand, assisting our people to reach their full potential and contributing to the social and economic well-being of the country. The Minister has today announced that the size of councils for Universities and Wananga will be reduced to exclude student and participation and to conform more closely to the commercial board pattern in order that faster and more efficient decisions can be made.

Please can you provide the evidence which was made available to the Minister which has brought about this decision. In particular was any research carried out with New Zealand Universities and Wananga to identify that the current arrangements are causing them to making poor quality decisions. Please provide any international examples of board structure used to justify the changes in NZ. I am also interested in any estimates on costs of running larger boards compared with the costs of running smaller boards that have been provided and in what advice was provided about retaining community and student representation.