A research institute based in Kuala Lumpur has concluded that "poor management at the top" may be the root cause of financial stress and poor quality outcomes affecting Malaysian private varsities.

"Although a good proportion - around 65 percent of the vice-chancellors and 68 percent of the deputy vice-chancellors have international degrees of one form or another - only around 15 percent of VCs and eight p ercent of deputy VCs have significant overseas management experience," said Penang Institute General Manager Ong Kian Ming ( left ).

"Commercial experience is also lacking with as many as 76 percent of VCs and 70 percent of deputy VCs coming from the public university system with very little commercial management exposure," he added.

Ong said their research also showed that 45 percent of local private varsities had "negative assets" and 46 percent were "loss-making" based on 2013 data from the Companies Commission of Malaysia.

He further said the resethat the top management teams of Malaysia’s private higher education institutions were highly similar in terms of demographics, background and experience.

Financial failure

The data showed that around 90 percent of Malaysian vice-chancellors were men and only 20 percent of their deputy vice-chancellors were women, said Ong.

Age also appears to be highly concentrated with the majority of around 56 percent of these vice-chancellors aged around sixty years old and very close to retirement while 32 percent are in their fifties.

Ong reminded that the problem of financial stress on private higher education institutions were highlighted last year when Alliance University College of Medical Sciences (AUCMS) - which had around 2,000 students and 500 staff - collapsed due to financial problems.

The research is a part of a series of a comprehensive study being carried out by the Penang Institute to examine the organisational structure and financial sustainability of 41 private universities, eight foreign branch campuses and 27 university colleges in Malaysia.