Measures needed to strengthen oversight of governance

It is important to make efforts to bring transparency to universities’ governance, while also respecting their autonomy. Public trust in private universities has been marred by a series of scandals and must be restored.

A special committee of experts at the Education, Culture, Sports, Science and Technology Ministry has compiled a report aimed at achieving sound governance among educational corporations, which run private universities and other entities.

The decision-making body of an educational corporation is the board of directors, while an advisory body to its chairperson is the board of councillors. The key element of the report is that the advisory body should be given the power to seek to dismiss board directors who have engaged in wrongdoing in order to strengthen the oversight of the executive body. The report also states that the board of councillors’ approval should be needed for dissolutions and mergers involving such a corporation.

The report proposes that members of a board of directors should not be allowed to concurrently serve on the board of councillors, so they can supervise each other. All of these proposals are reasonable. The ministry aims to submit a bill to revise the Private Schools Law to the current Diet session, reflecting the report’s proposals.

Regarding private universities, a different expert panel set up by the ministry proposed late last year that the role of a board of directors be reduced, thereby upgrading boards of councillors to the highest supervisory and decision-making body.

However, private universities vehemently opposed this idea, which would put budget plans and the right to appoint board directors in the hands of the board of councillors, which comprises people from outside the university.

In discussing the management of a university, the founding spirit and the autonomy of the university must be respected, so it cannot be referred to in the same way as the running of a company. It must be said that this proposal was unrealistic in terms of having councillors, who have few opportunities to interact with students, take charge of key parts of university management.

The issues were reworked at the current special committee, which decided not to upgrade boards of councillors after taking the opinions of private universities into consideration and left the authority of boards of directors almost unchanged. However, this decision does not solve the problems.

In recent years, there have been scandals involving private universities, including misconduct at Nihon University and irregularities in entrance examinations at medical schools. The reform of private universities is urgently needed.

The Tokyo District Court has handed down a ruling convicting a former Nihon University chairman of tax evasion. In this case, no one could prevent the former chairman and his associates from engaging in wrongdoing because the existence of the board of directors turned into a mere formality.

Other private universities should learn from this incident and verify whether their boards of directors function properly and that authority is not concentrated in certain directors.

It is essential that each board director should first shape up and promote sound governance. Boards of councillors also must exercise oversight with a sense of urgency.

With the birthrate declining, universities are expected to face further shakeouts. To be chosen by parents and students, it is crucial for universities to take seriously the problems that have been highlighted by these scandals and not neglect efforts to make their governance transparent.

(From The Yomiuri Shimbun, April 4, 2022)