Abstract
The author examines the manner in which risk is governed within higher education institutions (HEIs) in South Africa by formulating risk governance statements based on the requirements of the King III Report on Corporate Governance and other relevant literature. The formulated risk governance statements are used to develop the risk disclosure measurement index. Disclosure measurement method is accepted as a flexible method to use when extracting the pre-determined information in the annual reports. The developed risk disclosure index is used to extract the information from South Africa’s higher education institutions’ annual reports. The information disclosed in these annual reports is deemed a proxy of risk management practices within the higher education institution concerned. The results obtained indicate that South Africa’s higher education institutions have not embraced risk management as a key process in their activities. This is apparent in the assessed annual reports as compliance with the pre-determined set of statements was around 50%. For those that have not demonstrated these practices, it is stated that the concern is around the manner in which their highest decision makers make decisions, as it appears that risks may not necessarily be taken into account. As higher education institutions in South Africa continues to face challenges and they would possible be revising their strategies to take into account the recent events, every strategic decision being undertaken should be accompanied by a proper risk assessment to identify potential pitfalls (threats) and/or take advantage to achieve results promptly (opportunities)
Highlights
South African universities and universities of technology are currently facing highly publicized incidents which includes amongst others the demand for free tertiary education, demand for sufficient student residences, demand for removal of “colonial symbols”, transformation and the use of a singular medium of teaching
The formulated statements were used to develop the risk disclosure instrument. This instrument was deemed a crucial element for the purpose of extracting the information disclosed in the annual reports higher education institutions which is deemed the proxy of current risk management practices
The main idea behind the disclosure measurement instrument is the development of potential list of items that should be disclosed in the annual report of the selected institution
Summary
As far as this research work could determine, no research has focused on risk management in South Africa’s higher education institutions. The American Council on Education report interestingly observes that “the rate of administrative hiring has surpassed that of enrolment-driven academic recruitment”. In this regard, the American Council on Education report (as cited in PwC, 2014) observes that lawyers, government relations specialists, risk managers, compliance officers, regulation analysts, and procurement specialists compete for the same budget dollars, along with instructors and teaching assistants. The Higher Education Amendment Bill of 2015 (RSA, 2015) is said to be aimed at providing mechanism for “the determination of transformation goals and oversight, providing mechanisms for the public higher education system; to provide for the development of articulation and recognition of prior learning frameworks; to provide for the conversion of public higher education institutions; to provide for the powers of the council of a public higher education institution to invest funds; to provide further for the issuing of Ministerial directives; to provide for indemnification of an independent assessor; to provide for the indemnification and termination of the term of office of an administrator; to provide for different categories of registration of private higher education institutions and the associated rights and to provide for the withdrawal and revocation of qualifications by public higher education institutions” (RSA, 2015)
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