High levels of regulation and risk management are features of this sector, so educational institutions must have strong governance in place to succeed.
There are many issues that need to be considered. State and federal regulations are numerous and include licensing to deliver education to set standards, accreditation of teaching staff and programs, and occupational health and safety laws. Accountability is a key feature of good governance, so boards must provide appropriate policy settings, reviews, and educational and financial standards. Any small failure by an educational institution can have a significant impact on its reputation and enrolment, so boards must manage risk and ensure they have the right people and skills to govern to a high standard.
Government funding can be taken away if an institution does not adhere to standards. Changes to government regulation and policy can also have an immediate impact on an institution’s survival and its reputation (for example, international schools failed overnight when they lost vast numbers of students due to visas being cut). Public schools are following the private school approach by seeking greater community input, so there is a growing need for strong board members and strong community involvement.
Current government policy gives greater financial autonomy to institutions, which increases the need to attract the right people to deliver high-level governance and financial controls. The socioeconomic status of the community strongly influences profitability, particularly for private schools and childcare centres. The transparency of social media means institutions can face reputational damage more quickly and easily than ever before.
In Vocational Education and Training and tertiary education more broadly the environment is becoming increasingly competitive with students being given greater choice and control, as well as being able to access on-line distance learning. This is especially challenging for institutions with large physical asset bases who are competing with institutions who operate virtually, although both must pay increased attention to the overall student experience or risk losing students.