Governments set and administer public policy, and exercise executive, political, and sovereign power via laws, institutions, and custom and practice. Almost all have legislative, executive, and judiciary branches. At a national level, governments determine the operating environment for universities and can constrain and even damage development and competitiveness of both higher education and the national economy. Local governments can also influence universities in their sphere of operation. Governments can directly affect university quality, relevance of teaching and research, student employability, and the extent to which university-derived innovation and entrepreneurship can flourish. Of the diverse forms of government in the world, western-style, liberal and essentially free-market democracies have provided the best operating environments for universities and their graduates and postgraduates. Political and economic stability coupled to free speech and strong measures to control corruption are of paramount importance to the functioning of universities in the global economy. Universities vary widely in their types of governance, ownership (public sector or not-for-profit, or profit-making in the private sector), age, size, financial resilience, reputation, contributions to society and the economy, existence of commercial arms and satellite bodies, the extent and breadth of research conducted, the amount of autonomy they have from government, recruitment of international staff and students, ethnic and religious influences, bureaucracy, value for money, quality assurance and relevance assessments, embedded integrity, and degree of competitiveness. As a consequence, there is no single best governance model for universities. Nevertheless, the quality of a university and whether or not it really meets the internationally accepted definition of a university is shaped by the quality of its governance, staff, and student-body while appreciating that finance lies at the heart of whether or not the institution can survive. Meeting the oft-unwritten social contracts with the host country and its students is determined by the quality and relevance of education and research carried out, and importantly, the encouragement and facilitation of innovation, creativity, novelty, and entrepreneurship. The employability of graduates and postgraduates is a crucially important indicator of the true value of a university. Reputation and international rankings of higher-education institutions are directly affected by the quality and integrity of their boards, trustees, governing bodies, and so on, and also of those occupying key leadership positions. Institutional reputations can be destroyed by a wide range of inappropriate behaviours, or even the perception of such behaviours. Thus, the mission, vision, adaptability, and capacity of higher-education institutions to deliver the societal needs are dependent on the quality of both national governments and university governance. No Arab country functions as a western-style liberal democracy with strong public finances, robust civil-society institutions, and essentially free markets. Most Arab countries have high levels of poverty and are politically unstable. Various forms of corruption can be endemic. Arab countries are not able to provide solutions or adapt to the existential threat of climate change or major health issues such as pandemics and pollution. For some of these countries, university autonomy is regarded as a threat. Yet, in order for universities, research institutes, and other institutions of higher education to thrive in the Arab world and contribute to national growth and prosperity, there is a need for much greater institutional autonomy that they currently have. This increased freedom to operate requires legislation that encourages innovation, entrepreneurship, respects intellectual property, and invests in lifelong learning. Universities in turn must accept independent assessments of the quality and relevance of their education and research. Senior civil servants, political advisors, and politicians must be capable of appreciating the potential of the rapidly developing raft of transformative technologies, and should consult the intellectual resources in higher-education institutions for guidance in generating and implementing policy. There should also be consultations with regional partners to establish advanced regional research facilities as well as developing functional links with international agencies monitoring, stimulating, and funding education and research. In order for all institutions of higher education to produce employer-ready graduates and postgraduates, and innovators and entrepreneurs, the education and research they offer should demonstrate quality, be relevant to the needs of employers and society more generally, and offer value for money. Their boards or governing bodies should comprise individuals of high moral and ethical standing and committed to the precepts of advanced scholarship and societal improvement. They must ensure that the institution has a viable mission and suitable performance targets, including the fight against corruption. Those in leadership positions throughout these institutions must be of demonstrable competence, integrity, ambition, and vision. To these attributes, the ability to adapt to change is a prerequisite, especially as numerous new technologies, forms of employment, and economic models evolve. There is now greater awareness of the need to focus on the institutional governance processes. Many of those in senior positions were appointed on the basis of attributes unrelated to their managerial and governance competencies. Large numbers of unemployed and underemployed graduates and postgraduates testify to underperforming, sometimes irrelevant, resource- and time-wasting education and research. No wonder governments can be disappointed with universities in their bailiwicks, and be reluctant to fund them adequately. Particular attention must be given to interactions between governments and institutions of higher education. In most countries, universities have to deal with school leavers following state-funded secondary education, over which universities have little control. Accordingly, they may have to offer remedial-style teaching. State-funded education usually requires upgrading, sometimes in the face of resistance from teaching unions. Some governments control senior appointments in higher-education institutions and may even control the curricula and spending, much to the detriment of the institutions and therefore their students and staff. International competitiveness, demands of parents and sponsors, the needs of commerce and business, and the parlous state of public finances mean that new models of interactions between governments and higher-education institutions are crucial for the Arab world. This review chapter describes the role and diversity of governments; notes that democracy is vulnerable to various pressures; considers the role of local government in terms of interacting with universities; proposes what Arab governments ought to do; discusses national economies, trade, and commerce; defines what is meant by the term university and gives an overview of Arab universities; emphasises that most academics regard themselves as part of a global community; describes the types of university-governance strategies; considers essential leadership and management attributes; reviews the relationship between public-sector research institutes and universities; reflects on problems with spreadsheets in management and research; appraises the critical issue of corruption; relates the issues of governments and governance to the United Nations Sustainable Development Goals; and finally makes suggestions on the roles of sovereign-wealth funds, plastic pollution, and air pollution.