Review of the
Legislative Settings for
University Governance
Consultation Document
Table of Contents
Purpose of this document......
How to provide feedback......
Next steps in the review of the legislative settings for university governance......
The current legislative settings for university governance......
Why the Government is reviewing legislative settings for university governance......
Proposed changes to the legislative settings for university governance......
Questions for feedback......
Purpose of this document
The Ministry of Education (the Ministry) is currently reviewing the legislative settings for university governance.The Government aims to ensure that universitieshave strong and well-equipped governing bodies.
The Minister for Tertiary Education, Skills and Employment has discussed this review with university chancellors and vice-chancellors. This document reflects these discussions.
The review has identified a number of possible changes that could help to meet the Government’s aims.This document seeks your views on these proposed changes.
This document begins with a description of the current legislative settings for university governance. This is followed by a section outlining why the Government is undertaking this review. The document then outlines the Government’s proposal for future legislative settings for university governance, including a number of changes to the current settings.
Questions for your feedback are included in each section and are also listed together at the end of the document.
How to provide feedback
You can provide feedback on the questions in this document online at The deadline for providing feedback is Tuesday 12 November.
If you have any questions related to this document, please email .
Please note that your feedback may later be made publicly available in a document summarising responses to this consultation. If you do not wish your name and/or organisation to be associated with your feedback in this summary, please indicate this in providing your feedback.
Next steps in the review of the legislative settings for university governance
Feedback will be used to inform decisions on the review and, in particular, changes to the legislative settings for university governance. If legislative changes to the settings for university governance are needed, a bill will be introduced to Parliament. During the legislative process, there would be a further opportunity to provide feedback to the Government on the proposed changes. A bill could then be passed next year making legislative changes to the settings for university governance.
If legislative changes are made to the settings for university governance, they will include arrangements to allow universities to transition smoothly from the current governance settings to new governance settings, including giving universities the opportunity to amend their constitutions according to new legislation.If legislation was passed by the middle of 2014, for example, new councils could be in place for the start of the 2016 academic year.
The current legislative settings for university governance
The legislative settings for university governance are outlined in sections 169 to 171 and 173 to 179 of the Education Act 1989 (the Act).[1]These sections pertain particularly to the size and membership of university councils and to the reasons for which council members are chosen.
The Act requires universities to have councils of 12 to 20 members, with membership as follows:
- four members appointed by the Minister responsible for tertiary education
- the chief executive
- one to three members of the academic staff
- one to three members of the general staff
- one to three students
- having regard to the courses provided by the institution, one member representing the central organisation of employers
- having regard to the courses provided by the institution, one member representing the central organisation of workers
- if appropriate, one member representing professional bodies
- additional members co-opted or appointed by the council, or elected members.
Within the bounds of legislation, council size and membership is determined by each university’s council through its constitution, which is published by the Minister in the Gazette.
The council of the university appoints its chairperson (chancellor) and deputy chairperson.
In addition to council membership representing particular stakeholder groups as indicated above, the Actexpressesthe desirability that councils reflect the ethnic and socio-economic diversity of the communities served by the institution, and the fact that approximately half the population of New Zealand is male and half the population is female. The Act also directs the Minister to strive to ensure that councils have sufficient members with management experience to enable the council to perform its functions.
For details, refer directly to the Act, which is available online here:
Why the Government is reviewinglegislative settings for university governance
The Government seeks to ensure that tertiary education institutions (TEIs) are governed as efficiently and effectively as possible to help them build on their current performance, and to support the major contributions they make to their communities and to New Zealand’s economy. The governance settings for institutes of technology and polytechnics (ITPs) were reviewed and changed in 2009. The governance settings for wānanga are also currently under review.
A council is a university’s governing body. Among other things, the council of a university undertakes the university’s long-term strategic planning, strives to ensure the university’s highest standards of educational excellence, ensures the university operates in a financially responsible manner, and prepares the university’s Investment Plan and ensures the university is managed in accordance with it. In effect, a university’s long-term viability and success depend on a strong, highly capable council.
New Zealand universities are performing well, but they are operating in an ever more competitive international environment. They face similar challengesto universities in other countries, including the United Kingdom and the United States of America: to perform well in an internationally competitive environment despite constraints on funding resulting fromthe recent economic downturn.
The challenges universities face include:
- Greater competitive pressures from further internationalisation of the education market through the emergence of online provision, particularly Massive Open Online Courses (MOOCs). Students can now access learning opportunities online through elite institutions, such as Harvard and Stanford.
- Better responding to areas of high occupational demand, for example, bachelor’s level graduates in information technology and engineering graduates.
- Making strategic investments to enhance their attractiveness to students and emphasise their particular areas of expertise.
- Attracting international students at a time where competition for students is increasing around the world.
New Zealand’s small economy and distance from other major centres pose additional challenges for its universities. In order to be internationally competitive and meet these challengesthey need to be positioned to be nimbler and better organised than overseas universities. They need to be agile institutions able to respond strategically and quickly to economic fluctuations, population shifts, changes in demand and performance, learners’ and employers’ needs in different regions, and unexpected crises, such as the Canterbury earthquakes.
The current governance settings for universities are based on a representative model of governance, which prioritises stakeholder representation over the governance skills and abilities of council members. While representative stakeholders can also be good council members, councils could be stronger if the governance skills and experience of council members is explicitly prioritised. Representative councils can also result in council members with unclear accountabilities – i.e. whether they are accountable to the university as a whole or to the constituency that they represent. Further, in directing the Minister to appoint council members with management experience to enable the council to perform its functions, existing legislation conflates management and governance.
Membership requirements for university councils are largely prescriptive. While councils appoint many of their members, there are significant constraints on who may be appointed. This means that even with large councils (up to 20 members), there is, in practice, little flexibility over membership. On smaller councils (closer to 12 members), there is even less flexibility over who is appointedonce councils meet legislative requirements for representative members.
Strong universities need strong councils. The Government seeks more efficient councils that are smaller and have sufficiently flexible membership for universities’ unique characteristics to be reflected on their councils and for members to have high levels of governance skills and experience.University councils are large, which can make decision-making difficult and may reduce efficiency. The restrictions around council size do not allow sufficient flexibility for universities to have councils smaller than 12 if they choose to.
Objectives for the review
The Government seeks to ensure that universities are governed as efficiently and effectively as possible to build on their current performance and to support the major contributions they make to their communities and to New Zealand’s economy. Universities need strong and well-equipped governing bodies.
The Government seeks governance settings for universities that:
- enable councils to be nimble and efficient
- equip councils with people highly capable of governing universities
- clarify duties and accountabilities for individual council members.
The proposed changes outlined in the following sections aim to amend the legislative settings for university governance to best achieve these objectives.
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Proposed changes to the legislative settings for university governance
This section outlines changes that are proposed to the legislative settings for university governance. The changes pertain to council size, council membership, and the capabilities of council members. The first two changes propose smaller councils, with more flexible membership. The third change proposes that the Minister and councils appoint council members capable of governing universities. The fourth change proposes clarifying the duties and accountabilities of individual council members.
No change is proposed to the appointments of university council chairpersons (chancellors) and deputy chairpersons (deputy chancellors), which are made by university councils.
The change / Status quo / Detail on the change / Rationale for the change- Decrease council size
- not fewer than 12 nor more than 20 members
- not fewer than 8 nor more than 12 members
Larger governing bodies can experience problems of poor communication and decision-making. However, councils must also have sufficient membership so as to have among members the breadth of skills and experience required to govern. Councils of 8 to 12 members would be sufficiently large for members to have a breadth of skills and sufficiently small to avoid the problems experienced by large councils.
Feedback question:What do you consider are the advantages/disadvantages of this proposal to decrease the size ofuniversity councils?
- Make council membership requirements more flexible
- four members appointed by the Minister responsible for tertiary education
- the chief executive/vice-chancellor
- one to three members of the academic staff
- one to three members of the general staff
- one to three students
- having regard to the courses provided by the institution, one member representing the central organisation of employers
- having regard to the courses provided by the institution, one member representing the central organisation of workers
- if appropriate, one member representing professional bodies
- four members appointed by the Minister responsible for tertiary education (no change from status quo)
- between four and eight members appointed by the council, according to the university’s constitution
Flexible membership would mean that:
- the capability of members could be prioritised over their stakeholder representation
- universitiesare able to reflect their unique characteristics in their council.
Individual councils would not be prevented from appointing the chief executive (vice-chancellor), staff, students, and other stakeholders.
Feedback question: What do you consider are the advantages/disadvantages of this proposal to make council membership requirements more flexible?
- Require the Minister and councils to appoint council members with the skills to governuniversities
The Act does not direct councils to consider whether council members are capable of governing universities.
The Act indicates the desirability that councils reflect the ethnic and socio-economic diversity of the communities served by the institution, and the fact that approximately half the population of New Zealand is male and half the population is female. / The Minister and councils would be required to appoint council members who have skills and experience that make them capable of governing universities.
These changes could complement existing legislation indicating the desirability that councils reflect the ethnic and socio-economic diversity of the communities served by the institution, and the fact that approximately half the population of New Zealand is male and half the population is female. / The current governance settings for universities are based on a representative model of governance, which prioritises stakeholder representation over the capability of council members. In not prioritising the capability of members, representative councils may not be strong or well-equipped.
In directing the Minister to consider council members’ management experience in making appointments to councils, the Act may inadvertently conflate management and governance.
Requiring the Minister and councils to appoint council members with skills and experience that make them capable of governing universities would help to ensure that universitieshave strong, well-equipped governing bodies.
Feedback question: What do you consider are the advantages/disadvantages of this proposal to require the Minister and councils to appoint council members capable of governing universities?
The change / Status quo / Detail on the change / Rationale for the change
- Clarify the duties and accountabilities of individual council members
Legislation would outline sanctions for individual council members who do not fulfil their duties, including action brought against the individual by the council and removal from the council. / Specifying the individual duties of council members is important to ensure the accountability of council members.
Accountability mechanisms that hold individual council members responsible for fulfilling their duties are important for taking a comprehensive approach to helping to ensure that councils are highlyfunctioning.
This would help to ensure that councils operate in the best interests of the university and its stakeholders.
Feedback question: What do you consider are the advantages/disadvantages of this proposal to clarify the duties and accountabilities of individual council members?
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Questions for feedback
This document presents the Government’s proposal for changes to the legislative settings for university governance. The proposal includes a number of changes to the existing legislative settings on which your feedback is sought. The following is a complete list of questions for you to address:
- What do you consider are the advantages/disadvantages of this proposal to decrease the size of university councils?
- What do you consider are the advantages/disadvantages of this proposal to make council membership requirements more flexible?
- What do you consider are the advantages/disadvantages of this proposal to require the Minister and councils to appoint council members capable of governing universities?
- What do you consider are the advantages/disadvantages of this proposal to clarify the duties and accountabilities of individual council members?
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[1] Sections 171(8) and 171(8A) have been repealed.