I HAVE seen many American institutions from the inside both as a student and as a faculty member. I often asked myself—Why is it that they are so good? If you look at any of the rankings of universities you will find American universities at the top. I looked at Shanghai Jiao Tong and found that 17 of the top 20 were American. If you look at the top 100, two-thirds of them are Americans. This is simply out of proportion, so, I asked myself: Why is it that this is the case?

And the one thing that I noticed that was different from India, or England, where I had also studied, was the deep involvement of alumni. They were very active on the board of trustees and constantly in touch with the university. They would come back for home coming, games and convocations and the ties were very strong. The conjecture that I had was: may be this had something to do with it. I started to look at the literature and the research on this and it turned out that nobody had explored that angle. It took me a year to reach out to all the top 100 universities and collect the data on the governance because not all of this data is public.

When I started analysing it the pattern became very clear. Even after controlling for other factors like age, public or private status, religious or non-religious status etc, the percentage of the alumni on the board was a huge predictor of success defined in any of three ways: in terms of rank on the various lists, endowment or selectivity. In all three measures the link was pretty striking.

When I started studying Harvard, I went about looking at the origins of alumni governance and the striking thing that I found out was that until 1865 Harvard was a government university—a sarkari college as it were. But, even before 1865, it was run by the alumni because it was controlled by the legislation of the state of Massachusetts and Harvard alumni were very prominent in the legislature. So from roughly early 1700 to early 1800 Harvard was alumni governed. It was not under law or de jure as they say but it was entirely a coincidence that Harvard alumni were so prominent in the legislature. But then immigration started specially after the Irish Potato Famine in the 1840s. So suddenly Harvard alumni were not in control of the legislature. The new people who came in were very populist and the kinds of pressures that they started putting on the university were: you are too elitist, you charge too much, you admit too few, you teach the wrong things. This was exactly what institutions of excellence in India were charged with some years ago.

What it did was that for 20 years there was a sort of paralysis in terms of governance because there was this tussle between the university and the state. In the end things became so bad that government money for the university stopped. Private donations were also sequestered by the state—essentially people were contributing money but the state would not let the university use it. Because of this alumni also started to withhold their contributions. State started to intervene in the appointment of faculty. The final straw was in 1862 when they stopped the appointment of the President—so you can imagine the entire administration was becoming paralysed. At that point Harvard went to the legislature and said : Look if you want to kill us, kill us. But if you want us to be successful give control back to us and our alumni. It took three years to make this lobbying effort to go through. Interestingly in 1864 the US Civil War ended and many Harvard alumni had served in a very distinguished capacity in the war. There was a lot of goodwill in the environment for Harvard alumni which helped the bill to go through. But it was an uphill battle and even after three years of lobbying in the end it passed by just two votes in the senate and by one in the court (equivalent of the house in Massachusetts)—so it passed narrowly. But since 29th April 1865 which is when the bill passed, Harvard’s control has been given entirely to the Alumni. So, of the 30 members of the Board of Overseers every single one is selected by alumni. So I argue that the reason that Harvard is so good is that for its entire history—except for a small period in the beginning and a small period in the middle—it has been controlled by the alumni. Most universities take centuries to become world class. But many American universities like Duke, Stanford, Carnegie Mellon, Johns Hopkins and Chicago became very famous very fast and that was also because very quickly after their founding they were turned over to the alumni.

There are three main reasons as to why the faculty is so good. 1) Throughout your life, even after you are 70 or 80 you are known as the graduate of a particular university. The prestige of the university is tied very closely to the warm glow that individuals feel about themselves. No set of individuals has more interest of the institution at heart than its alumni. By transferring control to alumni you give the control to those who value the reputation of the university the most. 2) Normally boards have problems with asymmetric information. It’s difficult for them to get information on what’s happening on the ground. Even here, alumni have double advantage: having studied there they know how the system works and through their own alumni networks they can get access to information very quickly. 3) Then of course it’s only the alumni who feel for the institution and act from their heart giving money for art appreciation, languages or films—which would be difficult to fund otherwise.

Apart from the governance there are many other reasons as to why India needs time to catch up. There are many government committees looking into this. There are hundreds of little things that need to be improved. But my point is that you can fix a 100 little problems or you can fix one big problem. The one big problem that you can fix of course is governance. We must get the governance right. At this point most of the elite institutions tend to be public—either the central government or the state government has control. And that control is with a very heavy hand. Yes they fund them but they also smother them.

The point that I am socialising through India and also across the world now is that transferring governance to the alumni maybe a good way to quickly take universities from where they are to a higher level. This is not just an issue for India but also for European universities— the German and the French universities in particular suffer from many of the same problems. Too much government interference, not enough autonomy and inability to raise money. When alumni are in charge other alumni know that the money will be well spent so they also give a lot more. In fact, the moment Harvard was formally transferred to the alumni within 10 years its endowment tripled and in the next 10 years it tripled again. So within 20 years its endowment increased ten times. Interestingly there are only a few institutions which have had a lot of interaction with the alumni. Not in a formal sense but more in an informal involvement. Presidency College which is now the Presidency University has a very active alumni advisory board—not a governing board. The other interesting case is Institute of Chemical Technology which used to be the University Department of Chemical Technology. Most people may not know this but it has alumni such as Mukesh Ambani, Kallam Anji Reddy, Narotam Sekhsaria and others and they are the ones who have been very actively involved. My suggestion is to make this involvement which is informal at this point, formal by inducting these people in the board and formally saying that look this university is yours: you take it forward.

The other interesting entity which is alumni governed and as a result excels is Doon School. I believe its 100 per cent alumni controlled at the moment. The three older IIMs and five older IITs have well-established alumni bodies. Nobody cares about them more than the alumni. If you think about it, they are the flowers of India, the very best of what the Indian education system has produced—who better to take this forward than the alumni of these institutions? I am now in the process of socialising this idea in the government, corporate, academia and in the research world, worldwide. There really should not be any difference. In the US, whether they are public or private, both have found a way to involve their alumni in governance. However, Indians institutions of excellence are public. The ones which are private tend to be at the college level or specialised medical schools or similar entities. For instance St Stephens College, Hindu College, St Xaviers College in Mumbai are private but tend to be small. Nonetheless alumni involvement can help even there.