Both explicit and implicit pressures on the public funded universities have been increasing to mobilize financial resources in order to remain competitive. The current theoretical paper addresses the following research objectives- first, how the existing governance structure of universities is responding to, or prepared to respond to need to mobilize financial resources; and second, whether the university governance and corporate governance are converging. The current paper has made two contributions to the body of knowledge; first, it helps to understand the dynamics of governance in the institutions of higher education system in the wake of changing institutional settings through the lenses of various theoretical underpinnings, which are complementary and conflicting at the same time; and second, it helps to explore understanding of convergences and divergences between university governance and corporate governance systems.