OPINION: The Charles Darwin University governing Council lacks the competency to govern and manage the institution, thereby undermining the NT’s higher education sector and the economy, writes Dr Don Fuller.

The Charles Darwin University Council is the governing body of the institution. Led by the chancellor, currently Trevor Riley, the Council governs the affairs of the university under the Charles Darwin University Act 2003.

The main responsibilities of the Council are: monitor the performance of the vice-chancellor; approve the mission and strategic direction of the university; approve the budget and business plan; oversee the management of the university, including approving significant commercial activities; monitor systems of accountability; review management practices and performance and oversee risk management across the university.

If the Council had key performance indicators for each of these, it should have rated a bad fail on all over the recent past.

CDU and the Australian university sector more generally, are in crisis. Some of the important reasons for this crisis are external, including pressures on international student enrolments.

But most of the drivers of the crisis are internal. All are related to problems of governance.

A recent bipartisan Senate inquiry into governance failures in Australian universities has concluded that major governance failures have badly let down staff, students and the public, with legislation needed to restore community trust.

Labor Senator Tony Sheldon commented: “The game’s up, and everyone knows it – the old excuses won’t cut it anymore, and this lawless culture of secrecy and unaccountability must not be allowed to fester any longer.”

The inquiry identified a raft of governance problems, such as a lack of transparency and accountability, excessive vice-chancellor and executive pay, widespread breaches of workplace laws, precarious employment, and worsening academic and student conditions.

Many of these problems are apparent at CDU.

University councils, like CDU, have become self-perpetuating bodies dominated by external appointees. Often they lack critical understanding of the main mission of a university in the fields of education, training and research.

This severely weakens oversight, and contributes to repeated scandals.

READ: Governance and financial failures at CDU examined

READ: Why are there two medical schools in Darwin and why do taxpayers have to pay for both?

READ: Should the CDU city campus be built?

READ: Opinion: The vice-chancellor needs re-focus to make CDU a high quality university

Because councils largely appoint their own successors, they remain insulated from meaningful scrutiny, unlike boards or parliaments where under-performance can be sanctioned.

Universities such as CDU are characterised by what has been called ‘adverse selection’.

This occurs when the appointment process favours the wrong kind of appointees. The typical externally appointed CDU Council member either has no, or little knowledge, of the main purpose and required management processes of the university in order to achieve high quality teaching and research.

Given their lack of knowledge about the main university ‘product or service’, they are ill-equipped to select other Council members and particularly, vice-chancellors, who will be well suited to the role.

Often they simply go on the recommendations of previous vice-chancellors.

It also increases the probability that they will look to fulfil their own goals rather than the key functions of the university.

What otherwise, could explain the bizarre, risky, expensive Council decision to establish a new campus in the United Kingdom, to deliver a CDU business program? Talk about a classic case of taking coals to Newcastle, and how to ignore the educational and training requirements of the Territory.

How could a competent Council approve this?

Then of course, there is the very expensive decision to establish a new university campus in the Darwin CBD, given the excellent now under-utilised campus at Casuarina, and available evidence of the previous failed attempt to establish a city presence at the Darwin Waterfront.

And why have two medical schools rather than just one? It seems an unnecessary waste of resources given most Australian regional centres are in desperate need of a minimum of medical facilities, not to mention the drastic medical condition of many Territory Aboriginal communities.

Most of these disastrous decisions are on a slow burn to detonation.

However, the crisis with CDU incompetent governance and management was ignited recently, with the delayed admission by former vice-chancellor Scott Bowman that it graduated an estimated 130 apprenticeship students without proper qualifications. As the number affected continues to rise, it is now unclear how many students have been affected and the true nature of this disaster.

Mr Bowman’s contract was extended by the CDU Council in late November for another five years at more than $700,000-a-year. The contract was signed weeks before he divulged the growing TAFE scandal engulfing CDU in December, which he kept from the public and the responsible minister for at least two months.

This raises the important question as to whether the chancellor and Council knew about this?

If not why not?

Either the Council has been duplicitous with the government too, or kept in the dark by Mr Bowman, which surely should have been a matter of major concern to a well-functioning and competent university council.

Despite these major governance and management problems, Mr Riley, in a statement announcing the vice-chancellor would be leaving said, “Scott’s grace in this decision and his commitment to CDU [was] above all else” and said he had “made a significant contribution to the university and to the people of the Northern Territory”.

“In so many ways, Charles Darwin University is on a stronger footing because of Scott’s leadership,” Mr Riley wrote.

Mr Riley was asked by the NT Independent to provide further details about the ‘many ways’ he claimed Mr Bowman had improved the university during his tenure but declined to answer.

This is a stark example of the lack of transparency, accountability and responsibility to the broader community by a university council that a number of major inquiries have highlighted, particularly when there is much evidence to the contrary to such claims by the chancellor of CDU.

As reported by the NT Independent, Mr Bowman’s tenure at the university included ambitious expansion efforts along with deep financial woes, reputational harms, staff cuts, public clashes over academic freedom and transparency, mismanaged conflicts of interest, senior executive departures, an initial failure to obtain funding for the proposed medical school and then accreditation issues, as well as frustrations with the federal government’s cap on international student visas which were supposed to finance the new Darwin city campus – a capital investment decision that preceded his time in the job.

As mentioned, the university also announced a surprising venture to establish the London campus, established by CDU amid controversy.

Mr Bowman said in an email to staff in early December, after being sent questions by the NT Independent, that he had hired a friend and her wedding singer husband to run the university’s controversial campus without publicly advertising the roles.

It has recently been revealed that this venture attracted not a single applicant and cost at least $2 million.

It is very difficult to fathom how the CDU Council could have approved such a risky, overseas venture which borders on the farcical, and why the university waited for Mr Bowman to go on ‘gardening leave’, before deciding to can the project.

If anything demonstrates Council incompetence, this spectacular case must be it.

It highlights a main problem involving the relevant and core skills and experience of members of the CDU Council.

In particular, it is apparent that there is a lack of combined experience and skill within the fields of higher education management, financial analysis and risk management, financial investment and audit, business acumen and corporate governance, in any one member of Council. Competent Council members need to have had a wide experience in different working environments and a wide and deep educational skill set.

While some required skills and experience may be present singularly within a Council member they should be present in aggregate, for a member, as far as possible, if a Council member is to be effective across the range of their responsibilities.

This is particularly the case for senior members and the chair of the Council.

It is not likely to be relevant to have a high level of experience in one, or a limited number of areas, particularly if this experience is not related to higher level university management and leadership, for example.

As a result, it is likely that that CDU Council lacks leaders who possess the depth of knowledge or commitment needed to advance the university’s main educational and research goals.

As mentioned, Australian universities including CDU, face a governance crisis rooted in failures of transparency and accountability. Unlike parliaments and corporate boards, university councils lack effective mechanisms for responsibility and accountability.

In parliaments, for example, voters can replace elected representatives; in corporations, shareholders can vote out directors.

This leads to what has been termed ‘moral hazard’.

This arises when those making decisions face very different risks and rewards from those who bear the consequences.

For example, if a bold new policy succeeds, university council members might gain reputational benefits, but suffer little personal loss if it fails.

By contrast, the university as a whole may see only small gains from success but carry heavy costs if the policy goes wrong. This imbalance encourages leaders to take risks that others end up paying for.

This may go some way to explaining unusual decision making by CDU Council to support the duplication of university campuses and medical programs and to establish a course program in the UK.

All of these bold policies are likely to carry substantial risks and costs, none of which will be borne by individual Council members.

A further disturbing lack of accountability and transparency by the CDU Council has been provided by the refusal to explain the financial implications of Mr Bowman’s decision to resign.

It has been reported that he will remain in his position until the end April on ‘gardening leave’ which will see him paid in the vicinity of $125,000 over that time, despite the substantial disasters that led to his resignation.

How can this be regarded as a reasonable and acceptable level of accountability by the CDU Council?

As pointed out in the NT Independent, the university would not say what type of payout he may receive after signing a five-year contract extension in late November that was worth as much as $3.5 million.

The 2024 annual report, the most recent publicly available report, showed Mr Bowman was paid between $685,000 to $699,999, with a pay raise coming amid millions in losses at CDU in 2023, and threats of staff sackings in 2024.

The average full-time wage in Australia is about $107,000 annually, according to the Australian Bureau of Statistics, with Australians getting paid on average per week what Mr Bowman gets per day.

This is also a major, continuing problem that has been pointed to by recent high level inquiries into the governance performance of university councils.

These have emphasised the unreasonable levels of payment to vice-chancellors and the lack of accountability by university councils in making such decisions.

These findings continue to be ignored by the CDU Council.

Reform of university governance at CDU is long overdue. As a body, councils, it has been argued, add next to nothing to the real work of the university.

As pointed out elsewhere, membership of the CDU Council probably helps in getting a leg up in the arcane business of being awarded a gong in the Australian honours system, or in some equally meaningless status-seeking arena. And on retirement from the Council, you could even be awarded an honorary doctorate.

Then there is the matter of who vice-chancellors are, how they are appointed, and the vast sums they are paid for less than average performance.

As with CDU the vast majority come – or have come – from different institutions, different states, even different countries. They have next to very little direct experience or understanding of precisely what conditions are like at the teaching and research coalface in the institutions which they are meant to be managing.

Much the same is true of other senior managers.

Vice-chancellors should be elected from among the senior professors within the institutions they are to head, and for a specified time.

Salaries of senior managers, including the vice-chancellor and president should never be more than about 20 per cent above that of a full professor.

Currently, CDU, has become a self-governing institution, resulting in dispirited and alienated teachers and researchers, highly dissatisfied students, employer groups and members of the community.

The divide between senior managers and the academic coalface has seriously undermined higher education and the economy of the Territory.

The main function of a university such as CDU, should be to provide high quality teaching, training, research and community service to the community it is responsible for.

It appears almost beyond belief that it is necessary to have to point out to the Council of CDU that it is the businesses and employer sector and community of the NT to whom their responsibilities lie.

To this end, if the Council is to survive as a governing body, increased representation is urgently required from staff, students and employer and community groups who have a direct interest and knowledge of the services that need to be provided by CDU.

CDU Council does not appear to have been interested in these increasing community concerns, nor the importance of KPIs in determining the excessive salaries and perks of senior managers such as the vice-chancellor.

Nor does it appear to understand the necessity for accountability and transparency to the wider community and how poor Council governance is undermining the higher education sector and economy in the NT.

It is becoming increasingly clear that the Territory at this time, lacks the competency available to govern and manage a complex institution such as a university, without causing wider and on-going harm to the economy and community of the NT.

The level of incompetence and arrogance to high level findings on failures in university governance displayed recently by the CDU Council, particularly with regard to the need for a far heightened level of transparency and accountability, suggest that the time may not yet be here.

There have been previous discussions on combining CDU with a leading, competent university such as Flinders University in Adelaide, in areas beside medical training.

Such discussions should continue as a matter of priority, to enable the NT to receive high quality education and training, relevant project-based research and stable, competent, accountable, respectful service to the wider community.

Dr Don Fuller holds a first class Honours degree and PhD in economics from the University of Adelaide and has worked as a senior public servant in the Territory and as Professor of Governance and Head of the Schools of Law and Business at Charles Darwin University. He grew up in Darwin and attended Darwin High School.

He was also involved with the establishment of the first NT medical school under the leadership of Flinders University vice-chancellor Professor Ian Chubb.

Dr Fuller was also an adviser to the former CLP MLA Maralampuwi Francis Xavier, was briefly the senior private secretary to Chief Minister Paul Everingham, and is a former member of the CLP and the ALP.