With the enactment of the Education Act of 1872, the Victorian Government in Australia established a bureaucratically controlled, centralized schools system. But, the Education Act of 1958 encouraged the schools to develop more progressive open school cultures supported by different types of school committees, clubs and councils with the participation of parents and local community. In the early 1970s, state system of school administration was decentralized into several regions by posting bureaucrats with delegated authority to the newly created regions. In 1973, in keeping with the then existing trends in other Australian school systems, the Victorian Director General of Education issued a Discussion Paper proposing community participation in school management with devolution of authority and responsibility to the schools. After extensive consultations with all categories of stakeholders, the Government adopted a policy of political decentralization with representative governing bodies at the school level leading to the enactment of the Education (School Councils) Act of 1975.
Accordingly, mandatory, corporate governing body type school councils with representatives of parents, teachers, local-community and in secondary schools, students; with the principal as an ex-officio member were established in all state schools by February 1976. School councils were empowered to formulate school policies leaving the day-to-day management to the principals. However, in 1978, a crisis situation arose at one of the high schools where a junior teacher elected as the president of the council challenged the authority of the principal on the allocation of duties to teachers. This dispute resulted in several strikes and departmental enquiries, creating divisions within the school community, affecting the health of three successive principals. At this stage, the Government had to refine the process by framing a regulation to debar any paid employee of the school to hold the office of council president and strengthen the authority of the principal to manage the school as its CEO. In 1982, based on the recommendations of a number of consultative committees, the Government enacted the Education (School Councils) Amendment Act of 1983 devolving increased authority and responsibility to the councils in refining the process further.
In 1993, a newly elected coalition government implemented the Schools of the Future (SOF) program with the introduction of negotiated charters between schools and communities. The election of the same Government to a second term in 1996 enabled the consolidation of SOF process by turning its attention to standards rather than the structures as was done in Britain. Abu-Duhou (1999) in his publication for UNESCO, claims that the Victorian SBM enhanced by SOF program represent one of the most comprehensive strategies at school decentralization for higher student performance attempted anywhere in the world. In 2004, another government in office strengthened it further with another reform package and claimed that the Victorian schools system is a world leader in school-based governance. Later based on extensive reviews of the whole schools system, the Education and Training Reform Act of 2006 was enacted to cover the weaknesses in the system and move the Victorian schools to be high performing learning communities.