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Over at the Organisations and Markets blog Peter Klein asks Does Strong Alumni Participation Make US Universities Stronger? He writes,
What explains the dominance of the US in elite higher education? Shailendra Mehta offers a novel explanation: the role of alumni. Graduates of US colleges and universities tend to identify strongly with their institutions and care deeply about their school’s reputation and ranking. Only in the US do alumni play such a strong role, not only in financial support (often connected with athletics), but governance.
[N]o group cares more about a university’s prestige than its alumni, who gain or lose esteem as their alma mater’s ranking rises or falls.

Indeed, alumni have the most incentive to donate generously, and to manage the university effectively. Given their intimate knowledge of the university, alumni are also the most effective leaders. Through alumni networks, board members can acquire information quickly and act upon it without delay.

All great universities are nonprofit organizations, created to administer higher education, which benefits society as a whole. But US universities found a way to integrate competition’s benefits into the European concept of nonprofit, or so-called eleemosynary, corporations. The lack of profit does not diminish an alumni-dominated board’s incentive to compete for prestige by, for example, hiring distinguished faculty, accepting meritorious students, and striving for athletic or artistic achievement.
If the Mehta idea is right then should we strength the role that the alumni plays in the governance of New Zealand's universities? Alumni have advantages as major players in university governance. 1) they have an interest in the success of the university and in maintaining its reputation. If the uni's reputation falls so does the value of being a graduate from that uni. 2) they have knowledge about the university and its workings. In areas where expertise is a major component of producing the final product, an inherent knowledge of the area is a positive in terms of getting better organisational outcomes. Alumni can have such knowledge of their institutions.

Of course another group with much the same two attributes are the current academic staff of the university. And what we see in terms of governance is involvement of both groups but should the alumni have greater say?