From small arts organisations to large multi-million dollar operations, a strong working board can mean the difference between success and sustainability of your company, and not. So why do so many of us struggle in managing the personalities and responsibilities of our governing bodies?
This was the topic tackled by SAMAG – the organisation that presents peers forums for arts professionals – this month looking at Managing Up: Making Your Board Work for You.
Choosing a board:
Ultimately, good governance is about the executive and board working together effectively, and that is largely about communication. So choosing the right board is key to get the best result.
‘One really important thing to remember is that the level of skill in board members is really high now. People think that in the not-for-profit we are not quite as choosey – we are very, very choosey.’ It was a lucid point to start this discussion, made by Larissa Behrendt, Professor of Law & Director of Research, Jumbunna Indigenous House of Learning at the University of Technology Sydney, and Chair of the Bangarra Dance Company.
She added, ‘It a bit of chicken and egg situation – you don’t really know what you need until you know what your organisation is doing.’ Kim McKay, the new Director and former Chair of the Australian Museum, agreed: ‘You need to give weight to your board by filling the skill gaps.’
Behrendt described a past situation where the Bangarra board had five positions open. ‘The board kept putting forward names of people who looked good on paper, without going through the process of thinking about how they matched, and what skills were needed. We ended up having to ask all of them to leave. It was a disaster.’
She added, ‘It is important to have people who don’t want to micro-manage or think they know how to run the organisation. For arts organisations and non profits you need to have people who understand why you are different to the average corporate body and have some passion – it is finding that balance.’
There is another pitfall to selecting a board: should it be drawn from skill set or should it be representational of the organisation?
Dr Sue-Anne Wallace, Chair of Creating Australia and former Chair to many organisations within the national charity and arts sectors, replayed an experience of a national peak body that had amalgamated different organisations. It was a representational board of 23 and everyone brought their own practices, and issues. ‘It was really hard to keep control of the discussion,’ said Wallace, adding that it takes time and trust to transition that representational board to a skills and needs based one. ‘When you have a strategic plan, and a business plan that roles out of it, people can see where you are going.’ She added also that it was just too expensive to have a large board.
McKay suggested that, ‘the ideal size of a board is 8 to 10.’
Behrendt admitted that Bangarra’s board was larger at 11, but that it had an ‘aspect to it that was cultural. We need people who will do the philanthropy, the governance and the government engagement, and then people with expertise in education and people on the board who are there because of their cultural knowledge, and we value that just as much.’
Definitions of commitment:
Another key consideration raised by this SAMAG forum was what you could expect from your board.
Behrendt said that ‘one of the challenges now is the amount of time it takes to be on a board’, adding that she commits a day and a half a week unpaid to Bangarra. ‘You need to find somebody who can commit that time and, at the caliber of someone you want, that is a really big ask.’
She added, ‘There is a problem when you have board members – especially in performing arts companies – who think it is just a matter of turning up to meetings and opening nights. That is not the kind of person you need to have on the board.’
‘We don’t have any free tickets at Bangarra. Ticket sales are a third of our income so we can’t be affording to give that away. That cultural change within the company was a really big challenge,’ said Behrendt.
She verified that by saying that, ‘You can’t expect to ask people to give if you don’t yourself.’ McKay echoed it. ‘If it is fundraising that is the criteria, you have to be very clear of that position to board members.’
‘Philanthropy, I think, is something we are still learning about,’ said Behrendt. ‘We have a different culture of philanthropy in Australia, but we need to get better at asking. For a company like ours that has made a big different – learning to ask.’
McKay said one of her mantras is ‘communication, communication, communication.’
Brenna Hobson, Executive Director of Belvoir Theatre, agreed: ‘You would hope that your development person is taking to board, and your financial person your key fundraiser, and the HR person (on the board) spends time with head of production.’
‘For me, I think one of the things (to consider) is how you test how that relationship is going,’ said Behrendt. ‘When I get the board papers I don’t want any surprises. Having a good communication between the Chair and the CEO shows.’
She continued. ‘It is really important that everyone on the board knows what their job is. At the end of every year I meet with every board member and chat through any issues like attendance – we expect good performance – and if they are not contributing. We would also talk about their task for next year, so everyone has a job and knows what their role is.’
‘I think board members give more because they know what their task is.’ All panellists agreed that this was particularly important when an organisation and board were working in a fund raising capacity.
Wallace said it is important to ‘give people confidence – some of the most successful business people can’t ask for money. You need to provide your board with some assistance.’ She added, ‘It is also important that it is coordinated; that they don’t approach the same person and that everyone has the same story, that you know exactly what you are asking for, why, and what the benefit is – that is critically important as that person talks to the next person.’
McKay suggested practicing it. ‘Give them a script – just don’t let them go off. I have this other mantra, “no is a fantastic word as it is one step closer to getting yes”. They might not give this time, but down the road when they can.’
Hobson made the point that once you enter that relationship of receiving you ‘really need to look after them and service them, which takes a lot of energy, professionalism and staffing time.’
Equally, the relationship between your board and organisation needs to be nurtured. Hobson reminded the audience that ‘boards are made up of people just like organisations. ‘When things go wrong around boards it’s about the same sort of things that effect staff – lack of communication, erosion of trust, fatigue, and my favourite – micro management.’
The need for policy:
Behrendt perhaps raised the perfect example for policy. She said, ‘the issues around the Transfield-Biennale (partnership) were a wake up call…we discussed this around our board table and I found that was a good process to go through to make sure everyone had a deep understanding of the values of the company.’
She added that it was extended to the company, so that a dancer, for example, knew what the board was doing. ‘The issue around Transfield has been a really good way to engage the broader company. If we take money from a source and someone accosts one of our dancers and says “why are you taking money from X?” What are they going to say? It has been an opportunity to talk through why we make certain decisions (as a board).’ Today a board can’t operate in isolation.
Likewise, McKay raised the example of the National Gallery of Australia’s Shiva case. ‘In the museum sector we have our own “biennale moment” with the issue with the Shiva, the NGA purchase and the AGNSW similar purchase, and that is an issue of major discussion around museum tables at the moment, in terms of ensuring procurement strategies are up to really high standards so that communities are not exploited in this way in the future and that the board itself responds properly immediately to these concerns.’
‘It doesn’t matter what size your organisation is, the legal requirements are still there. There are no lower limits. Any organisation that has been incorporated needs to have a structure whereby the directors understand what the constitution is, and understand their responsibility as directors,’ added Wallace emphasizing the imperative for proper structures.
It was a point reiterated by McKay: ‘It is a very serious undertaking to go on a board of an organisation. You might have directors insurance, but that doesn’t stop your legal liability.’
The panel supported McKay’s suggestion that anyone who is serious about serving on a board should do the Institute of Company Directors Board Course.
Wallace also suggested, from her own successful experience, that bringing in a facilitator once a year to speak to her board about the importance of governance and what their roles where, was not only embraced but led to building up a policy manual, where delegations between the board and CEO were extremely clear.
‘It is just part and parcel of having a board and running an organisation now, and making it sustainable for the future. These policies are there for a good reason, especially if you are taking public funds; you have a huge responsibility back to the people who gave you that money to make sure it is well governed,’ said McKay.
Wallace said that we don’t have sufficient policy in the arts in the areas of:
- Acceptance and refusal of donations
- Risk management – boards need to know where their risks are
- The third is a complaints policy – so a board will then recognise a complaint as “a complaint”, rather than turning their acceptance of donations into an emotional decision, for example with Biennale of Sydney.
And the crystal ball?
When asked what the SAMAG panel saw as the challenges for growing the strength of their boards for the future, Hobson said: ‘I think we are sort of in the middle of adapting to a period of constant change in everything we do. I don’t know what is going to happen in five years time as there isn’t any way of knowing in this climate, so we need to sharpen our skills around being flexible, looking for opportunities, looking at things that are no longer working.’
She added, ‘Certainly we all know we are in a pretty flat funding environment, so you want all your organisation, and certainly your board, to be looking at what you are good at and how you can make money out of them as that is where the stability is going to come out of for the future.’
McKay finished up on a key point facing all boards today: ‘Diversity on boards is really important,’ adding that, ‘it is hovering around 14% female representation on boards (in Australia) and it is looking like it will come up to around 18% this year, but the experience in the United States and Europe is that is stays that way. In Norway they have a 40% quota…I am a great believer in quotas on corporate boards and I think it would change the very fabric what we do in Australia if that could happen.
The facilitator of this panel was Dr Ricardo Peach, Capacity Development Manager at the Australia Council for the Arts.
For more on SAMAG www.samag.org
This piece was first published on artshub.com.au in May 2014.