CNV3-I1-8-Higher Education

Last two decades, the higher education scenario is fast changing to match with the rapid intrusion of technology, career demands of the students and especially the involvement of private investment in the Higher and Technical Education.  If the technology challenged the centuries old contemporary teaching, deliverance and the demand of growth with sustenance led by the investors/founder’s expectation for the return on investment, which demands the corporate governance and practices in Private-Unaided Higher Education Institutes/Private Universities (PUHEIs)

Status - Higher Education Institutions

In India, the Higher education institutions are Central, State Universities fully aided by Central and Statement Governments, with grants from UGC.  Autonomous, Institutes of National Importance like IITs, IIMs, NITs, IISc and AIIMS all funded 100% by the Central Government, with the enrolments approximately of 1.5 million. The phenomenal competition and growth witnessed from year 2000-2001, with recognising the institutes with excellence as Deemed to be Universities under section 3 of UGC Act 1956 and further empowering the states to enact their local act and authority to grant licenses to establish Private Universities by any capable, reputed Indian legal entities.

The spectacular growth in the number of self-aided private universities, broken all the shackles of affiliated college system and elevated India as a country leading globally in higher education sector along with USA and China.

The world of higher education has been focused on the question of whether the world-class universities and countries should concentrate their resources on having a few such institutions or money should be distributed more widely to ensure other goals, such as broader access. However, despite this argument largely being about use of resources, very little research has examined the finances of world-class institutions. In 2019 QS World University Rankings, out of top 400 Universities, only seven Indian Higher Education Institutions/Universities were able to get listed, those are Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc), Bengaluru.

In India, there are nearly 900 universities and the numbers are growing due to the increased contribution in numbers by Private and Deemed to be Universities, which are more that 50% of the total universities in India. However, none of the oldest or private universities were listed in any international rankings, which leaves the question remain unanswered, whether the increased/number of students are important for the survival of PUHEIs or the Rankings and accreditations.

However, there is no doubt, that the changing global phenomena inducing the importance of ‘Corporate Governance’ being the clinical factor for all un-aided/private universities for their financial sustenance and progress in revenue generation capabilities.

The term ‘Corporate’  may be a new buzz word for Indian PUHEIs, however the entry of increased entrepreneurial educationalists and Investors into PUHEI sector, where the Corporate Governance becomes integrated not only for companies and allied bodies but for Education Sector also,   though being opposed by the contemporary practices or the practitioners. Corporate governance is a structured process, set up for the Minor or Major Institutions, where the expectations from each functionary are bound to be administered and executed under certain accepted rules, procedures and practices by which a company is controlled and directed.

The Governance in un-aided HEIs in India, is a balance between autonomy and accountability. Globally, the autonomy in PUHEIs in order to increase the flexibility and opportunities to evolve the new interventions and ideas from the stake holders, where the institutions require to meet the needs of the society though self-sustenance and most importantly to achieve the goal and choices  of the founder and the investors.

The Governance of PUHEIs is managed by external and internal governance.

External Governance

Presently, in the name of Nation’s interest and tag of education “can’t be for profit” the regulatory authorities and other govt. agencies have moulded into only regressive controls and rigid approval-based education system. Different to European HE scenario, regulatory bodies in India, act as licensing and approval authority through a process of application and inspections, that including the commencement, closure, cap on admissions, fees, curriculum, examination, teachers, designations, ratios and every part of deliverance with NO considerations for the quality.

-          When it comes to the legal entity, then Charity Commissioner, Registrar of Companies and Societies.

-          For a conducting entity, the external governing agencies like AICTE, DTE, MHRD, UGC, BCI and other councils having their own rule setup and parameters and restrictions on conducting the core activity of education, with no consideration for the self-sustenance and survival.

-          When it comes to Private Universities, the state government acting as the regulatory mechanism, trying to regulate the admission, fees and other aspects, seeking the regular report from the University and even receives deposits being the fixed percentage of fees as deposit to state govt, with no inference or support for  development of the university

-          No liability on the government agencies or any contribution for the development and sustenance of PUHEIs, except acting as controlling mechanism.

Internal Governance

Lela Maisuradze, the head of European Integration Division of the Ministry of Education and Science of Georgia says; “Effective governance is a harmonious fusion of power and authority and equal balance between trust and control where democratic, autocratic and laissez faire management styles are addressed according to the needs of a society and within the boundaries of active legislation.”

In India, to survive in the rigid and controlled approval-based education system like India, the internal Corporate – ‘Governance’ is important for all stake holders to be responsible for the institution survival, growth and sustenance.

Key Elements of the Corporate Governance in PUHEIs

Though, controlled by the statutory bodies (external governance), the PUHEIs can expand the horizon of diversity and better execution through internal bodies like Governing Body/Council, Academic Council and Advisory Council, comprising of founder/s, representatives of the sponsoring body-investor/s balanced with the representatives from Industry and Academia.  The councils and Governing Body of the PUHEI shall oversee the following core parameters of corporate governance:

·        Autonomy

The autonomy and freedom of decision making in financial or academic operations having its own credit and liabilities. In a controlled, statutory regime like India, the autonomy should be expressed and utilised cautiously by the participants and stakeholders of PUHEIs, keeping view of repercussions and negative impact in long run.  Last decade has witnessed the blows of banning and closure of state open universities, prosperous and diversified institutions due to the faulty and extravagant decision making and inability of the Advisors, Directors and stake holders to utilise the free and competitive market space.

·        Balance

The regulatory, approved based system like India, also provides an opportunity to the PUHEIs to diversify the operations and services which are in kind of fundamental or with Market driven Business orientation. The board of directors and the internal councils/advisors have the highest responsibility to be vigilant and provide the insight of the market dynamics, flexibility to amend the continuous and cotemporary practices, academic and business deliverance, though believed to be the best of core.  The balance of correction mechanism of decisions by the stake holders always beneficiary to the sustenance of the organisation.

·        Competitive

The present challenge of PUHEIs is the increase of competition between the similar service providers and the numbers of participants in the same domain, with good opportunity to diversify and space to play. The Advisors, Directors and the stake holders must continuously strive towards the identification of the rapid changing demand in services, which is possible through branding exercise with the support of Research based career or enterprise-oriented curriculum.  Where the internal governance is having high responsibility to ensure the practical and positive approach towards the diversity and flexibility to adapt the new age dynamics with concurrent support and vision of the proven expertise from senior members of academia and industry.

·        Diligence

One of the contra indications of the autonomy is the careless decisions, absence of discussion and collective decisions led to corruption and fraud.   The explosion of severe and repeated scams like the stock market scam, the UTI scam, Ketan Parikh scam, Satyam scam, Banking sector scams  being reported, Civil Airline scams which are severely criticized by the shareholders and caused irreparable damage to sentiments and trust of the investor, consumer and general public. Similarly, though autonomy is need of time in the Governance of PUHEIs., at the same the time the periodic audit by third party or even internal forensic audit of the Admissions, Receivables, Payments, Recruitment & Employee satisfaction, Transactions, Compliances and Non-fictitious Annual Reports would help the founders and entity to analyse the actual status, areas to focus and plug the loopholes as a preventive than the damage control.

·        Leadership

One of the Leadership trait is to keep the organisation interest on apex importance even, when the individual standing at the exit door, is a necessary mantra in corporate governance. Mentoring the juniors, unconditional support to the achievers, though young but having energy and crave for out of box thinking and emerging opportunities. The aptitude of taking the bullets would not necessarily and always end up with martyrdom but certainly establish the trustworthiness of an individual or team and the reliability in the organisation.

Conclusion

Higher Education system in India is under tremendous pressure form the state and market to create increased out-put of educated youth with multiple enterprise skills and confidence. The PUHEIs must work hard on internal and external governance and factors influencing the survival strategy.

“The increased governance/management in/of Higher and Technical Education in PUHEIs, resulting as the governance and management of knowledge systems and knowledge associates. Irrelevant to the world ranking, the PUHEIs performance is measured always by internal and external associates by the methodology of governance and suitability/readiness for the future. In the era of entrepreneurial universities, the flexibility to adjust with the market forces, without neglecting the governance will be the driving force for the growth of PUHEIs.

Dr. M.Prasada Rao , General Counsel, ITM Group, Navi Mumbai