Inquiry into quality of governance of higher education providers

The higher education sector plays an essential role in the social and economic development of Australia. Universities receive significant public funding support, including through the provision of Commonwealth Supported Places and HELP loans to domestic students and Commonwealth research grants, so there is a clear public interest in how they are governed.

The ongoing Senate inquiry into the governance of higher education providers is an opportunity to reflect on the efficacy of higher education governance structures. This article highlights some of the recommendations coming out of the recently released interim report.

Overview of the Inquiry

The Senate Education and Employment Legislation Committee (Committee) convened an inquiry into the quality of governance at Australian higher education providers (Inquiry) in 2025.  The Committee recently issued its interim report (Interim Report)[1] with a final report due in December 2025.

The Terms of Reference of the Inquiry are broad, focusing on the powers of the Tertiary Education Quality and Standards Agency (TEQSA), the national regulator responsible for quality assurance in the higher education sector, to identify and address corporate governance issues at Australian higher education providers and in particular:

• the composition of governing bodies and the transparency, accountability and effectiveness of their functions and processes, including in relation to expenditure, risk management and conflicts of interest
• the standard and accuracy of financial reporting, and the effectiveness of financial safeguards and controls
• compliance with legislative requirements, including workplace laws and regulations, and
• the impact of employment practices, executive remuneration, and the use of external consultants, on staff, students and the quality of higher education offered.[2]

The Inquiry was convened in response to ongoing governance concerns raised by some stakeholders and a parallel inquiry has recently been convened by the NSW Legislative Council into the governance of the ten public universities in NSW (NSW Inquiry).[3]  

Background on university governance

At a system-level, higher education is shaped by a complex regulatory framework involving Commonwealth, state, and territory legislation, multiple agencies providing oversight, and independent integrity bodies. Public universities are mostly formed under state or territory legislation however, they receive funding mostly from the Commonwealth and are subject to Commonwealth regulation of the sector, notably through the Tertiary Education Quality and Standards Agency Act 2011 (Cth) (TEQSA Act) and the Higher Education Standards Framework (Threshold Standards) 2021 (Cth) (HES Framework).

Like other public and semi-public entities, universities must also comply with workplace laws, financial reporting obligations, and public sector governance standards, such as the Public Governance, Performance and Accountability Act 2013 (Cth) or equivalent state legislation depending upon where the institution is based, such as the Government Sector Finance Act 2018 (NSW).

TEQSA regulates providers through is application of the HES Framework, a central component of which is the ’Standards for Higher Education’ (Threshold Standards), a legislative instrument made by the Minister under s 58(1) of the TEQSA Act[4] on the advice of the Higher Education Standards Panel, an expert statutory advisory body independent of TEQSA.

The Threshold Standards comprise seven domains:

1. Student Participation and Attainment
2. Learning Environment
3. Teaching
4. Research and Training
5. Institutional Quality Assurance
6. Governance and Accountability
7. Representation, Information, and Information Management

Of primary interest to the Inquiry was domain six: Governance and Accountability, which 'establishes the core requirements for leadership, independent oversight, corporate monitoring and accountability, risk management and academic governance'.

At an institutional-level, universities generally adopt a tripartite governance structure, comprising:

• The University Council (or Senate)that provides overall corporate governance oversight, with support from specialist committees (e.g. audit and risk).
• The Academic Board (or Academic Senate)that ensures academic quality and integrity.
• University executive, led by the Vice-Chancellor.

Transparency of governance

A significant focus of the Inquiry has been on transparency of decision-making within institutions. Some stakeholders observed the dual accountabilities of universities established under state legislation but that receive funding primarily from the Commonwealth, as well as a lack of Parliamentary oversight and a trend of increased corporatisation. This highlights a tension between the important social and economic role of universities, the corresponding public support they receive, and the relative autonomy from government, which they have traditionally enjoyed. This tension is a recurring theme throughout the Interim Report.

The Inquiry heard evidence on governance transparency, focusing on concerns in the following areas:

• The visibility of decision-making (e.g. no requirement to publish meetings of Council meetings) and university funding and expenditure.
• The management of conflicts generally, relating to the engagement of consultants and outside employment of senior academic and professional staff.
• The decline in staff and student participation in decision-making forums, notably a reduction in the number of elected positions and concerns around how staff and students are supported to participate effectively in decision-making.[5]

The Committee made several recommendations in relation to these matters:[6]

• Recommendation 1: Improve transparency and accountability by publishing full council meeting minutes, disclosing consultancy spending, maintaining conflict-of-interest registers, reporting on executive remuneration, and reporting on council composition publicly.
• Recommendation 2: Strengthen TEQSA’s enforcement powers to facilitate transparency and accountability reforms in Recommendation 1, alongside the current process to modernise and strengthen TEQSA’s powers.
• Recommendation 3: Ensure meaningful consultation by involving staff and students in major change proposals before decisions are made.
• Recommendation 5: Enhance council composition by setting minimum proportions of members with public sector and higher education expertise.
• Recommendation 6: Increase elected representation by ensuring minimum numbers of elected staff and student representatives on governing bodies.
• Recommendation 7: Ensure equal treatment of elected staff and students on governing bodies.
• Recommendation 8: Provide governance training by adopting a best-practice model for the induction and professional development for council members.
• Recommendation 11: Enhance complaints processes to ensure they are accessible to all members of the university community.

Remuneration of senior staff

The remuneration of senior university staff has long been a source of public interest and is a focus of the Committee. The Committee has heard evidence suggesting remuneration is excessive, noting a growing gap between senior executive and academic staff, while other stakeholders have defended remuneration practices by reference to comparable private sector organisations.

The Committee made Recommendation 4 calling for the Australian Government to work with the Remuneration Tribunal to develop a classification and remuneration framework to determine vice-chancellors’ and senior executives’ remuneration.[7]

Strengthening the regulator

The Inquiry considered whether TEQSA requires additional powers to better address the governance issues raised by stakeholders. There were different views among stakeholders about the need for additional powers, although TEQSA identified a range of limitations in its powers.

TEQSA identified limitations in using the Threshold Standards to identify governance gaps. These included the absence of criteria for appointing members to governing bodies, a lack of oversight over executive remuneration and employment practices, and the absence of mandated transparency requirements.[8] TEQSA indicated that a lack of specificity in the governance requirements under the Threshold Standards meant that they were too broad to be an effective compliance and enforcement mechanism[9] and not amenable to creation of binding legislative instruments, such as enforceable codes, to address systemic issues.[10]

TEQSA also identified opportunities to strengthen its regulatory power relating to acute risks.  It suggested establishing a power to suspend provider registration or course accreditation, along with the ability to suspend, cancel, shorten or impose conditions on registration by reference to a broader range of matters reflecting the objects of the TEQSA Act.  It also suggested strengthening the basic principles of regulation to prioritise student protection, provider accountability and Australia’s reputation for high quality education.[11]

Furthermore, TEQSA identified two opportunities to assist it in responding to systemic risks, namely introducing a new legislative instrument(such as an enforceable code setting out clear compliance obligations) and  establishing enforcement provisions for systemic risks (for example, issuance of infringement notices or compliance notices).[12]

The Committee made several recommendations relating to the powers of TEQSA:[13]

• Recommendation 9: Enhance the powers of TEQSA by the introduction of legislation that provides TEQSA with necessary powers to investigate breaches of Threshold Standards and enforce compliance directions.
• Recommendation 10: Improve governance reporting to help TEQSA identify and mitigate risk across the university sector, including public reporting results of compliance processes.
• Recommendation 11: Coordinate data sharing between TEQSA and other regulatory bodies to avoid duplicative reporting requirements.

Complaints process

The Committee heard evidence from some stakeholders suggesting inadequacy in the complaint-handling processes within institutions. The positive impact of the new National Student Ombudsman was recognised, although the absence of similar avenue for staff was noted.

The Committee made Recommendation 12 calling for universities to examine their complaints processes to ensure they are effective and accessible to all members of the university community.[14]

More to come

The Inquiry is ongoing, and we will provide an update as the final report is released and reform measures are implemented. We will also be monitoring the NSW Inquiry and will provide our thoughts as that inquiry proceeds.

[1] Quality of governance at Australian higher education providers – Interim report (The Senate: Canberra: Sept. 2025) [Link].

[2] Quality of Governance At Australian Higher Education Providers  (The Senate: Canberra: Jan 2025) [Link].

[3] Inquiry into the NSW university sector (NSW Legislative Council: Sydney: August 2025) [Link].

[4] Higher Education Standards Framework (Threshold Standards) 2021 (Cth).

[5] Note 1, Chapter 3.

[6] Note 1, paras 5.91 – 5.93, 5.109-5.112 and 5.124.

[7] Note 1, para 5.102.

[8] Note 1, para 5.31.

[9] Note 1, para 5.32.

[10] Note 1, para 5.33.

[11] Note 1, para 5.35.

[12] Note 1, para 5.37.

[13] Note 1, paras 5.121, 5.123 and 5.124.

[14] Note 1, para 5.129.