Peter Marshall - Monash University - Governance of Controlled Entities
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Transcript of Peter Marshall - Monash University - Governance of Controlled Entities
Governance of Controlled Entities
Mr. Peter Marshall
Chief Operating Officer & Senior Vice-President
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What is a Controlled Entity?
Definition of controlled entities
A controlled entity is one that satisfies the test of control in section 50AA of the Corporations Act 2001 and includes:
a. an entity which the University wholly owns (“wholly owned subsidiary”); or
b. an entity in which the University holds an interest of any kind (including a shareholding interest or membership interest) and the University has control of the entity.
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Monash Controlled Entities
Monash University has 3 controlled entities, operating for a variety of reasons:
1. Monash College
2. Monash Foundation
3. Monash Accommodation Services
Significantly fewer than we had 15 years ago
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Rationale for participation in Controlled Entities
The reasons for forming or participating in a Controlled Entity may include:
1. An area that is not core University business e.g. student accommodation
2. There are commercial reasons for operating under a controlled entity – i.e. it can operate under a “clean set of books”, e.g. Monash IVF, Monash College
3. Benefit in operating under different employment or regulatory environment – i.e. not under the University EBA, subject to different regulations etc.
(can be a combination of the above)
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Ensuring the entity remains a CONTROLled entity
In theory exercised through governance (Council and VC)
Separation and clear roles for:– Shareholder
– Director
– University line accountability
But conflicts are inevitable
Clear delegations of authority – particularly financial
“Controlled” operating independence
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How does Monash govern its Controlled Entities?
Controlled entities operate under:
– a University Council approved constitution
– an approved operating agreement
– University appointed Board of Directors
– Accountable to the University Membership/Selection and Remuneration Committees (sub-committees of Council)
– Accountable to the University Resources and Finance Committee (sub-committee of Council) – financially reporting on a quarterly basis
– Shared services agreements
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Constitution and regulation
Use of (as far as possible) standard template constitution
Council oversight and approval
Shareholders agreement (where university not 100%)
Privacy and data sharing
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Operating agreement
Financial arrangements
Shared services
Use of the Monash brand
Competition controls
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Board of Directors
Appointment arrangements– VC authority/approval
– Remuneration controlled at group level
– Remuneration only where required
– The Chair
Internal or external appointees
Term appointments
Clarity where appointments end/terminated
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Financial accountability
Quarterly reporting to Finance committee
Common accounting and finance systems/transparency
Dealing with good and bad problems
Weighing up commercial benefits (entity v group)
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Tension points
Insurance – who insures entity or group
Property – should the entity hold property or like assets, can the entity commit expose the group to liabilities or risk
Cash
Systems access and data
Internal Audit and Risk