Can higher-ed learn governance from companies?

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Can higher-ed learn governance from companies?

Whenever global rankings of institutions are released in India, a debate ensues on why no Indian institution is in the top 100 globally despite the fact that India has had a rich tradition of education starting from the early days of Nalanda. Also it is a fact that some of our universities like Delhi, Madras, Bombay and Calcutta are more than 100 years old. The first IIT was set up at Kharagpur in 1951 and the first IIM at Calcutta in 1961 followed by the IIM Ahmedabad in 1962. These great institutions have also produced many illustrious alumni. Thanks to India’s diverse needs and federal structure, its higher education sector today is the largest in terms of enrolment and the number of institutions.

Despite these facts it has neither made a mark at the global level nor emerged as an education hub. As a result it has lost several decades of opportunity to other countries in Asia Pacific, in particular, to smaller countries like Singapore and Hong Kong and now to its large neighbour, China. It is time to introspect on the factors that have contributed to this scenario.

A new code of governance is required for transformation

One of these factors is the governance of the sector both at the government and institution level. India definitely needs a new code of governance at both levels. Government has to shift from being a controller that is rigid and discourages innovations to a facilitator that encourages institutional autonomy with greater accountability. Private sector plays a significant role in educating India today. So, encouraging them to become accountable would be better than discriminating against them. Government has to also become more transparent in the criteria and processes used for approvals.

Institutions often find themselves in troubled waters even after complying with almost all criteria. Even at the institution level there’s often a lack of transparency in decision making and communication which creates an element of suspicion in the minds of stakeholders.Institutions should consider self-regulation as an important step in developing transparent and accountable operations.

Making government more transparent and less rigid

Regulators like University Grants Commission(UGC), All India Council for Technical Education (AICTE) and Medical Council of India (MCI) were established to govern this sector. However, they have only controlled the growth, innovation and expansion of the sector, making systems more rigid and less market friendly. For instance provisions requiring institutions to adhere to a particular course design or course duration goes contrary to the philosophy of market responsiveness and discourages innovation. The recent decision asking institutions to roll back four year undergraduate degree programs is a case in point.

Globally it is now believed that an undergraduate degree program should be inter-disciplinary and must provide adequate time for students to decide on specialising in one particular discipline. It is unfair to expect a young 17-year-old student to make a career choice. Giving a broad exposure in the first two years of undergraduate studies gives students an opportunity to explore their interest and potential. Spending the next two years in specialising would then be much more fruitful.

Take another case on using technology for program delivery. Technology can help remove the barriers on entry and make education more inclusive by reaching out to the unserved student markets. The young India today is technology savvy and hence using technology can facilitate expansion at low costs. But, so far the UGC has not looked favourably on technology enabled program delivery. It is only when the regulators become facilitators that we can expect to see a change.

Building accountability in institutional governance

A responsible governance structure in the institutions can help in boosting stakeholders’ confidence. To build better governance structures in institutions one can borrow from the way corporate boards have evolved over the last three decades to become clear and unambiguous.

This has been possible primarily due to SEBI’s proactive role and companies’ adoption of the governance code which went beyond compliance. SEBI has laid down the role for the Boards and even the Independent Directors. The new Companies Act puts a greater degree of onus on companies to ensure transparency. It has also made social responsibility a part of corporate governance.

The Board Committees play important roles in improving governance in various spheres. For instance the Finance and Audit Committee plays a significant role in improving financial health, operations and governance of the companies. Here are four ideas on how educational institutions could model their governance structure on corporate boards and committees:

1. Get independent directors on board. These directors must be chosen from the perspective of the expected contribution that they can make to institutional quality.

2. Structure the Board to have four important committees:

Finance

Academic Audit

HR

Technology

3. Have regular quarterly meetings of the board and discuss the reports of the committees in detail.

4. Make the decisions of the Board available on a public domain. Exception could be made for confidential matters regarding future growth or an individual employee or finance issues.

Government and institutions have to work together

It is time that institutions and government consider coming together to create a governance code which enhances stakeholders’ confidence. This code, besides requiring compliance, should encourage and reward institutions for going beyond minimum norms of disclosure.

The new education policy should create an institutional mechanism which encourages all stakeholders to create a shared understanding of governance.

Author’s BIO

Dr. Rajan Saxena is Vice Chancellor NMIMS and former Director of IIM, Indore & S. P.Jain Institute of Management and Research, Mumbai. He has over 40 years of experience in management education, research, consulting and institution building. A Ph.D. from Delhi School of Economics, Delhi University, he taught at XLRI, S.P. Jain Institute of Management & Research, IIM Calcutta, IIM Indore and NMIMS. He has also taught in University of Calgary , Canada and University of Sterling, U.K. and Pace University, New York, USA.

Dr. Rajan Saxena sheds light on why Indian institutions are not faring well in global rankings and what they can learn from corporates