Corporate Governance and Financial Sustainability of Higher Education Institutions in Malawi

Abstract

The rapid expansion of Malawi’s higher education sector over the past two decades has intensified the need for effective governance to ensure financial sustainability. Higher education institutions (HEIs) in Malawi face unprecedented financial and governance pressures due to rising enrolment, limited public funding, inefficiencies in institutional management, and an expanding regulatory environment. Despite increasing enrolment and government investment, public universities continue to face chronic financial instability due to limited subventions, delayed student loan disbursements, and insufficient revenue diversification. This paper examined the relationship between corporate governance and financial sustainability in Malawian HEIs, focusing on council independence, financial expertise, internal controls, and risk management practices. A convergent mixed-methods design was employed, combining quantitative data from institutional financial records although hard to find (2016–2023) and structured surveys of 180 respondents with qualitative insights from interviews with 24 senior administrators, council members, and finance officers. Quantitative findings revealed that public universities had lower revenue diversification (mean = 0.47), cost recovery (mean = 0.60), and liquidity (mean = 1.25) compared to private institutions, with financial expertise and council independence significantly predicting cost recovery (adjusted R² = 0.52). Qualitative data corroborated these results, highlighting political interference, weak financial capacity on councils, inconsistent internal controls, and reactive risk management as key constraints to financial resilience. Financial expertise was the strongest predictor of cost recovery (β=0.32, p=0.003). The study concludes that strengthening governance structures, particularly through enhancing council financial expertise, institutionalizing internal controls, and adopting proactive risk management, is critical for improving the financial sustainability of Malawian HEIs. These findings provide evidence-based recommendations for policymakers, university councils, and regulators seeking to enhance strategic oversight and long-term institutional viability.

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