Corporate governance practices at South African higher education institutions: An annual report disclosure analysis

Karen Barac,Tankiso Moloi,Ben Marx

doi:10.4102/jef.v4i2.323

Abstract

Higher education institutions are presently facing many challenges, ranging from economic and financial constraints to social and educational issues. Accordingly, sound management and governance are essential, and this brings the governance model of HEIs more in line with business corporations. This article provides an overview of the state of governance practices at higher education institutions in South Africa, and an assessment of the corporate governance disclosures in their annual reports. This was done through a literature review of higher education developments, including a South African perspective, supported by empirical evidence obtained from assessing the annual reports of these institutions. The study found that, although most of these institutions are providing disclosure on their corporate governance structures and practices in line with the recommendations of the Higher Education Act and King II, such disclosure is often lacking in detail and could be improved.

Highlights

Corporate governance can be described as the system by which entities are directed and controlled
The higher education environment has become more demanding over the years, resulting in higher education institutions (HEIs) currently facing many challenges, which include the lack of student preparedness due to inadequate school education, institutional capacity constraints, increased emphasis on research, quality assurance expectations, globalisation, rapid development in information technology, the quest for market orientation and customer centred-operations, increasingly complex legal environments, funding and resources constraints, as well as the growth in the local and international providers of private higher education (Council for Higher Education (CHE), 2009a; CHE, 2009b; CHE, 2009c; De Groof, Neave & Svec, 1998; Kezar & Eckel, 2004; Marx, 2007; Mills, 2007; Peterson, 1986; Pope, 2004; Republic of South Africa (RSA), 2007; Salter,& Tapper, 2002)
The research findings present the results of content analyses performed on 22 annual reports, which were analysed for their disclosure of corporate governance information in their annual reports

Summary

Introduction

Corporate governance can be described as the system by which entities are directed and controlled. The higher education environment has become more demanding over the years, resulting in HEIs currently facing many challenges, which include the lack of student preparedness due to inadequate school education, institutional capacity constraints, increased emphasis on research, quality assurance expectations, globalisation, rapid development in information technology, the quest for market orientation and customer centred-operations, increasingly complex legal environments, funding and resources constraints, as well as the growth in the local and international providers of private higher education (Council for Higher Education (CHE), 2009a; CHE, 2009b; CHE, 2009c; De Groof, Neave & Svec, 1998; Kezar & Eckel, 2004; Marx, 2007; Mills, 2007; Peterson, 1986; Pope, 2004; Republic of South Africa (RSA), 2007; Salter,& Tapper, 2002).

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