HEQSA, TEQSA Governance Review & Corporate Governance: Navigating Academic and Business Excellence

Higher education institutions increasingly operate as substantial, complex organisations with significant commercial dimensions — international enrolment revenue, large property portfolios, commercial research partnerships, and in some cases subsidiary business entities — sitting alongside their core academic mission. Regulatory reviews of governance in the sector, including those conducted by bodies such as TEQSA, have repeatedly returned to a central tension this creates: how does an institution maintain genuine academic governance, with its own standards and independence, while also applying the disciplined corporate governance practices that a large, financially complex organisation clearly needs? Navigating that interface well, rather than letting one dimension quietly dominate the other, is one of the defining governance challenges facing contemporary higher education leadership.

Want expert help putting this into practice? Dr Brendan Moloney can guide you through it.

Two Governance Traditions, One Institution

Academic governance and corporate governance emerged from genuinely different traditions, and that difference still shapes how each operates today. Academic governance developed around principles of collegial decision-making, peer judgement, and protection of academic freedom and standards from undue external interference. Corporate governance developed around principles of fiduciary duty, financial accountability, and structured board oversight of executive management. Both traditions are legitimate and necessary, but they do not always sit comfortably together within a single institutional structure, particularly when a governing council or board is asked to exercise both functions, or when the two report through overlapping but not identical channels.

Institutions that manage this tension well tend to be explicit about where each tradition applies, rather than allowing one to be quietly absorbed into the other. Financial and commercial decisions are subjected to rigorous corporate governance discipline — risk assessment, financial due diligence, conflict of interest management — while academic decisions retain genuine space for collegial academic judgement, informed but not overridden by purely commercial considerations.

What Governance Reviews Typically Surface in This Space

Related: The Relation between Good Governance and Improving Organizational Performance.

Sector governance reviews, including regulatory reviews focused on TEQSA's own operation and broader higher education governance inquiries, have repeatedly surfaced a recurring set of concerns at the intersection of academic and corporate governance. These commonly include governing councils that lack sufficient understanding of academic quality matters to provide genuine oversight, academic boards that lack sufficient visibility into financial and commercial decisions that materially affect academic delivery, and commercial partnership or offshore delivery arrangements entered into without adequate academic governance sign-off.

• Governing council members without adequate briefing on academic standards and quality obligations
• Academic governance bodies with limited visibility into commercially significant institutional decisions
• Partnership and delivery arrangements approved through predominantly commercial processes with thin academic scrutiny

None of these gaps typically arise from deliberate neglect. They arise because academic and corporate governance functions were built up separately over time, by different people, answering to different pressures, without anyone deliberately designing how the two should connect.

Building Genuine Bridges Between Academic and Corporate Oversight

Closing these gaps requires deliberate structural bridges rather than hoping goodwill and informal communication will suffice. Practical approaches that institutions have used effectively include ensuring genuine cross-membership between the governing council and academic board, so that at least some individuals sit across both bodies and can carry context between them; requiring commercially significant decisions with academic delivery implications to receive formal academic governance input before final approval, not merely notification after the fact; and providing governing council members with structured briefing on academic quality and standards obligations, not just financial and risk reporting.

• Deliberate cross-membership between governing council and academic board
• Formal academic sign-off requirements for commercially significant delivery decisions
• Structured academic governance briefing for governing council members without academic backgrounds

These bridges take sustained effort to build and maintain, particularly as institutional leadership changes over time, but they are considerably more effective than relying on informal relationships between individuals who happen to currently hold key roles. Institutions that rely primarily on such informal relationships often discover the gap only when a key individual moves on and the connection between academic and corporate oversight quietly disappears with them.

The Particular Risk of Growth and Diversification

See also: Darlo Higher Education | TEQSA Consulting Experts: Navigating the Future of Australian Higher Education.

The tension between academic and corporate governance becomes most acute precisely when institutions are growing or diversifying — entering new markets, launching new delivery modes, forming new commercial partnerships. These are exactly the moments when commercial urgency is highest and the temptation to move quickly, ahead of full academic governance scrutiny, is strongest. Institutions that have experienced governance failures in this space frequently trace the origin back to a period of rapid growth where commercial decision-making outpaced the academic governance structures meant to provide a check on it.

The practical lesson is that governance structures bridging academic and corporate oversight need to be genuinely tested, and if necessary reinforced, before a period of significant growth or diversification begins, rather than retrofitted after problems have already emerged.

Governing Council Composition as a Structural Safeguard

A further lever institutions can use is deliberate attention to governing council composition, ensuring the council includes members with genuine understanding of both academic quality matters and corporate governance and financial oversight, rather than being weighted heavily toward one dimension. A council composed primarily of members with strong commercial or financial backgrounds, however capable individually, may struggle to provide genuine scrutiny of academic quality decisions. The reverse composition carries the opposite risk. Deliberate balance in council composition, refreshed periodically as institutional needs evolve, is one of the more durable structural safeguards available.

Writers on higher education governance, including Dr Brendan Moloney, have consistently framed this balance — between academic independence and corporate discipline — not as a problem to be permanently solved once, but as an ongoing structural tension that well-governed institutions actively manage rather than ever fully resolving.

Toward a More Integrated Governance Culture

Ultimately, navigating academic and business excellence together is less about choosing one governance tradition over the other and more about building an institutional culture where both are genuinely respected and neither is allowed to operate in isolation from the other. Institutions that achieve this integration tend to make more durable strategic decisions, avoid the governance failures that arise when commercial momentum outpaces academic scrutiny, and are better positioned to satisfy the expectations of regulators and reviewers who increasingly look for exactly this kind of integrated governance maturity.