Universities in the business world: How higher education will evolve.
The government is expanding its reform experiment to the universities of Prykarpattia and Zaporizhia. These changes will allow these institutions to manage their earned funds and collaborate more closely with private businesses.
At least three universities will operate under entrepreneurial rules: their goal will be to reduce the share of state funding, increase private investment, and attract business partners. Will this change higher education in the future?
Why do universities need supervisory boards?
In the fall of 2023, the government decided to reorganize NAU into the "Kyiv Aviation Institute" (KAІ) and separate the Ukrainian State Aviation Academy in Kropyvnytskyi. The university notes that the initiative comes from the Vice Prime Minister for Digital Transformation Mykhailo Fedorov. In January 2024, a supervisory board was established at NAU, which in April appointed Ksenia Semenova as acting rector.
The experience of NAU has become the foundation for the government experiment, which includes expanding the functions of supervisory boards (SB) at universities. Supervisory boards are not a new concept in higher education. Existing legislation mandates their presence in all higher education institutions.
However, for most universities, they tend to be more of a prestige tool than an effective body. For instance, institutions often invite former presidents: Leonid Kuchma serves on the boards of Chernihiv Polytechnic, Dnipro University, and chairs the board at KPI. Viktor Yushchenko is the head of the supervisory boards of Cherkasy National and Western Ukrainian universities, as well as the Pyotr Tchaikovsky National Music Academy.
In such cases, supervisory board meetings tend to have more of a ceremonial significance and are held very infrequently. For example, the last two meetings of the KPI supervisory board occurred with a five-year gap.
The government's resolution proposes significantly expanding the functions of SBs. They will select the head of the institution, define development strategies, and facilitate the attraction of additional funds from the private sector.
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An advisory body under the Cabinet will form the supervisory boards through a committee for selecting SB members. It will consist of six members appointed by the Ministry of Education and Science: three directly and three based on recommendations from international organizations. Currently, the list of the latter has not been approved, but it includes those cooperating with the Ministry of Education in the field of education: the European Commission, the World Bank, USAID.
The supervisory board will consist of seven members who cannot be university employees. "External experts, representatives of government, education, and business will be included in the university supervisory boards. CEOs of major companies will be able to share management experience and implement best business practices," noted Fedorov.
According to the Ministry of Education, the primary task of the experiment will be to build close cooperation between higher education institutions and businesses. The private sector will be attracted by transparency and the professional training of specialists at universities.
The supervisory board of NAU is headed by former "Kyivstar" CEO Petro Chernyshov. According to him, there are many businessmen in Ukraine eager to participate in educational development. Chernyshov joined NAU's supervisory board at the invitation of the Ministry of Education. Before that, he knew very little about this university.
"I often visited the Ministry of Education for my other project. When Oksen (Oksen Lisovyi, Minister of Education since March 2023) and his deputies appeared, I spoke with one of them. I said: if you want to truly reform a technical university, you can count on me. At that time, I still knew nothing about NAU, and later they offered me to join its reform," noted Chernyshov.
Will the new rules apply to all universities?
In short – no. Currently, the experiment includes NAU (after reorganization, it will be the Kyiv Aviation Institute), Zaporizhia National University (ZNU), and Vasyl Stefanyk Precarpathian University. For the next two years, only these institutions will operate under the new rules, but, as noted by the government, other educational institutions may join the experiment.
The Ministry of Education explains the choice of these institutions by the need for representation from various regions (western, southeastern, and Kyiv). Additionally, the mentioned universities share a "fragility" in leadership: ZNU and Precarpathian University currently do not have an elected rector, while NAU is undergoing reorganization.
The government has tasked the three institutions with increasing student numbers, raising the average score on the National Multi-Subject Test (NMT) for entrants, diversifying sources of funding, increasing staff salaries, and expanding educational programs.
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The Ministry of Education does not expect that all universities in the country will have supervisory boards with expanded functions in the future. "The government experiment is just part of a broader process of transforming the network of higher education institutions. We need to have institutions of different formats, with varying profiles and governance systems.
According to this logic, in universities that collaborate with the private sector and have a large number of dual programs (on-the-job training), business should be represented on the supervisory boards, while in institutions focused on research or academic development, supervisory boards will be formed on a different principle," noted Deputy Minister of Education Mykhailo Vynnytskyi.
How NAU became the "showcase" of the reform
NAU is a pioneer among universities that will operate under business rules. The university serves as a "showcase" for other institutions, encouraging them to join the Ministry of Education's experiment.
In just six months, from April 2024, the university attracted over 50 million UAH (funding in 2023 was 904 million UAH) and built partnerships with companies like "Kyivstar," Ajax Systems, Cisco, "Octava," and "Progresstech," Semenova reports. According to her, the university aims to reduce the share of state funding.
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The university has a unique relationship with the Ministry of Education, as it has become a "test subject" for expanding supervisory board functions. This raises some distrust of the planned experiment by the Ministry of Education among other institutions. The rector of one of the largest universities in the country, which did not join the experiment, told EP that NAU enjoys better conditions under the proposed government experiment. As a result, its success may not extend to others.
What does the status of a non-profit enterprise provide?
After the reorganization of NAU into KAІ it will become the only university in the country with the status of a non-profit enterprise.
According to Semenova, the new status will help manage the funds that the university earns from contractors. Previously, funds went to a single treasury account, but after reorganization, they will go to the university's bank account. This simplifies payments