27 April 2010
The procession of company directors going through the revolving doors of the country’s court rooms suggests that in the financial sector there are issues of governance in that sector.
The failure of the New Zealand Rugby Union to balance the books for the last year in a code that has a sound relationship with media interests with seemingly never-ending supplies of cash and the revelations from the Melbourne Storm rugby league club about a club in the other code that had no problems taking the cash suggest that governance in sport could be an issue.
The wholesale review of local authority governance in Auckland (which also reshapes the management of the region) and the recent events in the Canterbury Regional Council would seem to suggest that issues of governance have been identified in local and regional government.
It just could be the case that governance is something we should turn attention to in New Zealand.
Minister of Tertiary Education Steven Joyce has done just that in implementing a move signalled before his tenure to sort out governance in the ITP sector. Certainly the performance of some ITPs might suggest that they have been operating without the constraints of governance. On the other hand each of the ITPs has been audited each year. So the move to sort out governance in that sector is probably in response to what are perceived as clear issues in that sector.
A key feature of these changes is the size of ITP councils which have been reduced to a standard eight members – four appointed by the Minister and four by the community. The Minister also appoints the Chair and Deputy Chair. The Minister has historically always appointed four people but what is different is the balance – four in a council of eighteen is very different from four in a council of eight. Also, appointing the leadership of the councils means that the Minister has taken on a large part of the responsibility for the success of governance in the sector. Good appointments, good governance.
A further feature is the appointment of a number of people to more than one council – something that has been done in the health sector. In one instance one person is on three councils, in another one person chairs two councils. These are interesting developments that could lead to greater co-operation between (and perhaps even merger of) different institutions or, in the interests of good governance, councils responsible for more than one institution. Back to the future – that’s is how it was done in Auckland in the early days with the Auckland Technical Institute Council having initial responsibility for Carrington (later to become Unitec) and Manukau Technical Institutes. Did it work then?
I wonder if attention might now be turned towards the school sector and questions raised about governance there. With 18,855 school trustees attending to the governance of a little over 2,500 schools (not counting ECE institutions and organisations) there is a monumental taks in seeing that these critical responsibilities are discharged to high standards. So we put in place a government agency (ERO) to help with this, we place these governance groups into a situation constrained tightly by regulation, by operational rules related to income, to staffing, to capital expenditure, to service delivery, to markets (i.e. zoning) and so on. So can these groups truly be said to be discharging the responsibilities of governance? And if they were how realistic is it to think that a community of the size we have can produce more than 18,000 people qualified to do so.
Perhaps it is time in terms of governance in the school sector to look at introducing the missing links of school reform in this country – the Education Service Centre and the Community Education Forum. Both were to be part of the original plan but were dispensed with on grounds that were never very clear.
The Education Service Centres are somewhat analogous to the US School Districts and were intended to provide the glue for schools in a district. They were never intended to have the powers of the old education boards but it might be possible to see such a mechanism providing some of the governance in much the same way as the Super Council might relate to Community Boards in Auckland’s bright new future.
Whatever path might be chosen, if education can crack the question of governance with 18K directors operating 2.5k operations then perhaps the finance sector and local government should be handed over to them as well.
With 80 or so business failures a year in the school sector (i.e. Boards replaced by commissioners or placed under some kid of surveillance) some kind of response with regard to governance would be appropriate.
Are the models devised in the 1980s and 1990s adequate to take us into the take us into the future?
It would seem that they are not in tertiary and something has been done about it.