An evaluation of governance mechanisms as determinants of performance : A case study of Australian universities

The premise underlying the introduction of corporate governance principles in the Australian higher education sector is that good governance results in good performance. This paper evaluates the influence of internal and external corporate governance mechanisms as determinants of performance in the context of Australian publicly-funded universities. Secondary data from annual reports were transformed to create indices of internal and external governance practices, and teaching, research and financial performance. Relationships between governance and performance were analysed using correlation analysis. The study illustrated in this paper is important as literature suggests that corporate governance mechanisms and the influence of these mechanisms on performance are contradictory. The results of this study do not support the contention that in Australia, the governance of universities has a significant relationship with their performance. [Author abstract]