Board characteristics and performance in independent schools

Summary

This study examines the relevance of school board characteristics (i.e. board composition and board practice) on school performance within independent schools in Australia.

Researchers

Project background and aims

In Australia, the school sector is generally classified into three categories: government (public) schools, the Catholic schools, and independent (private) schools. In the last decade, the Independent School (IS) sector has seen an average of 2.2% of annual increase in full-time enrolments, which has consistently exceeded the average growth at Catholic (1.2%) and government (0.9%) schools. This makes ISs an increasingly important player in the education market. The majority of Australian ISs are separately incorporated as non-profit companies limited by guarantee and are governed by a board of directors. Faced with increased scrutiny and calls for transparency and accountability, schools are being forced to reflect on the rapidly evolving societal and governance landscape.

We explore the association between board effectiveness and performance using board composition and board practices as measures for board effectiveness. Our study makes an initial attempt to understand how boards behave in the unique setting of ISs that operate within both business and non-profit principles.

Methodology

The first stage of this research project is a quantitative analysis, based on a survey questionnaire to board chairs of ISs. Board composition is measured by: the number of board members; the relative percentage of male and female board members; the percentage of parent board members; tenure of board chair and board members; and board diversity. Board practices are measured by: the engagement of the board in seeking information additional to management’s reports; asking probing questions regarding proposals, information, and school performance from management; professional development opportunities; evaluation of board performance against goals; developing plans for improving board performance; and preparing well for board meetings. School performance is measured by school financial and academic performance.

The second stage of this project (work in progress) involves a qualitative analysis based on face-to-face interviews with board chairs, board members and principals of ISs.

Findings

Our survey research findings reveal that board composition and board practices contribute to increased board effectiveness, which ultimately has a positive influence on school performance, both academically and financially. Our study contributes to the school governance literature and practice by providing a better understanding of the antecedents of effective board governance in independent schools and its performance implications.

Output

This paper was presented at the 2019 European Accounting Conference and the 2019 American Accounting Conference.