Taking reviewers from your institution seem unethical. Choosing your former collaborators is also incorrect. There is a possibility of a conflict of interest.
Researchgate can also be a platform for selection. Besides, checking an institution's website for possible reviewers in the area can be another alternative.
One of the things I do is to look through the list of references and select authors that I cited in my manuscript. Citing them in my paper suggests that they are experts in the field.
How to find proper reviewers for the manuscript or proposal?
If this is from journals / publishers' perspective, normally they have their own contacts / ways to find the appropriate reviewers.
If this is from author perspective & for submission to journal for publishing purpose, the author can also explore the following links beside other methods proposed by previous researchers / scholars:
Usually the journals ask at the authors of suggest some referees. But then for ethical reasons they send the submitted paper to other reviewers who have the same skills of the referees that you have reported. Therefore it is very important that referees suggested have skills to easily understand and judge the submitted work.