This paper is to analyze the 2007 reform of the higher education system in Portugal (RJIES), which ambitioned fundamental changes in the governance of universities, the option given to higher education institutions (HEIs) to be transformed into public foundations being only one element of the reform. Based on desk research, the key elements of the reform, the process of designing and introducing it and an assessment of its impact are presented. We may conclude that the governance reform has led to more effective management of universities regardless of their legal status, but the new, foundation form has not fulfilled the expectations regarding the more autonomous and flexible operation of the transformed HEIs, due, to a large extent, to the financial restrictions brought about by the global crisis.