This study explores the influence of knowledge transfer activities on the institutional governance of higher education institutions, with a focus on the Austrian higher education sectors. Knowledge transfer, as part of the third mission of higher education, extends academic activities beyond traditional teaching and research, fostering connections with the broader community, industry, and society. This research investigates how these activities influence institutional governance. Utilising data from the Academic Profession in Knowledge-based Societies (APIKS) survey in Austria, the study examines the perceptions of academic staff across various sectors, including public and private universities, universities of applied sciences, and university colleges for teacher education. The study also highlights the diverse impact of knowledge transfer activities across different institutional contexts and the need for nuanced governance models that accommodate these variations. The findings challenge traditional assumptions about the direct influence of knowledge transfer on governance, suggesting a more complex interplay that is mediated by factors like institutional culture and governance structures. The research underscores the importance of re-evaluating theoretical frameworks and governance strategies to effectively integrate knowledge transfer activities, enhancing the adaptability and responsiveness of higher education institutions.