In 2022, TEQSA noted an increase in changes of ownership. This is not surprising, given the COVID-19 pandemic’s significant financial impact on the higher education sector. In several instances, experienced senior leaders, including members of the governing body, left the organisation soon after this change of ownership.
As quality higher education relies on robust and competent corporate and academic governance, changes of ownership can present significant risks, particularly when the new owner has limited experience in the provision of higher education.
TEQSA monitors the ownership of higher education providers and pays close attention to any transitions, whether they be through mergers, acquisitions or changes in shareholding arrangements. This is to understand the extent and impact of these changes, such as changes to strategic direction, course offerings and key personnel, and be assured that students will not be unduly disadvantaged by these changes.
Domains 5 and 6 of the HES Framework require providers to exercise competent oversight of their operations so they adhere to all standards and the TEQSA Act. In instances of changes of ownership, sections 6.1 and 6.2 clearly outline our expectations regarding what is required from a provider both in terms of corporate governance and corporate monitoring and accountability.
What providers can do
As members of the governing body, new owners are expected to be well informed about the entity’s operations and risks, and to be diligent in understanding and attending to the breadth of governance responsibilities as required by the HES Framework. Specifically, new owners should understand their obligations under:
- section 6.1: Corporate Governance
- section 6.2: Corporate Monitoring and Accountability
- section 6.3: Academic Governance.
As a starting point, new owners should consider:
- familiarising themselves with all relevant legislative requirements and obligations
- ensuring that delegations are documented and reflect accountabilities and timeframes for compliance
- engaging an independent expert to review the entity’s mechanisms for compliance and identifying areas for improvement
- reviewing any pre-acquisition continuous improvement plans and modifying these to account for any changes in strategic direction
- reviewing the risk management framework and risk register, to ensure these are current and that risk mitigation measures remain appropriate.