Problems of governance
The Stage, 25/8/11
The recent fallout at the Poetry Society has brought the whole issue of governance, crucial to any arts organisation’s future, back to the forefront, says Simon Tait
The sudden implosion of the venerable Poetry Society, one of the Arts Council’s favourite clients, has brought back into focus an issue which had shifted from the arts sector’s gaze: governance, and the relationships of board and executive in arts organisations.
And last week Arts Council England’s appointed its first director of organisational leadership and development with a team whose job it will be to give clients like the Poetry Society guidance on how to steer their businesses with excellence and stability. Governance will be a large part of her remit.
Last month a spat escalated and brought the resignation of the Poetry Society’s director. This led to the entire board standing down because they hadn’t seen it coming, they had lost touch with the executive. ACE, which had offered an extra £100,000 funding for next year against the trend of cuts, has temporarily suspended its grant because of what it sees as a spectacular collapse of the organisation’s governance. “We have made it very clear to the society what it needs to do, as a matter of urgency, in order to re-establish compliance with the terms of its current funding agreement – particularly in the areas of governance, management and leadership, reputational risk and reasonable care,” the ACE spokeswoman said.
Governance had been seen as vital to any arts organisation’s future, but as an issue it had been overshadowed by the suddenly more urgent funding crisis. In the 80s, at a time of great change in cultural subsidy when funding was shrinking, arts and heritage organisations were encouraged to find alternative income sources and looked to corporate sponsorship. It was an ethical shock for many of them, but several were successful quite quickly, and to help them many recruited business leaders to their boards, encouraged by Arts & Business.
In the 90s these business appointees began to find themselves at the head of many boards, most of them either charities or companies limited by guarantee – and while some guided their organisations skillfully and harmoniously, others tried to impose their business style on boards unprepared for the City approach. There were some serious fallings out, with the directors of both the National Maritime Museum and the National Gallery moving on after clashes between chairman and CEO. In 2005, the chairman of English National Opera – a financial services millionaire who had personally brought considerable cash to the company – fired the artistic director, the second he had personally sacked, and appointed successors without an interview process, strictly against the rules for a subsidised company. It brought calls for his own resignation from luminaries as varied as the novellist Jeanette Winterson and the singer Philip Langridge, and he duly stood down.
Boards, how they work with the executive and how confrontations between the two can be obviated, became a major issue. It featured in the Arts Council’s own debacle over its 2007-8 investment programme in which it had found governance failings among some regularly funded organisations. Tellingly, ACE’s then new chief executive, Alan Davey, said in an interview: “There are lots of good boards about, but some boards see their job as managing financial risk only and not enabling artistic risk”.
A year later the ACE’s Cultural Leadership Programme took it up and organised a conference on the issue which identified key questions – like should a chairman be a visionary, a facilitator or a leader? how do you overcome board conflict? who owns the company vision, the chief executive or the board?
It became part of the CLP’s Meeting the Challenge programme, which is now to be taken on by the new ACE leadership director, Ginny Spittle, brought in from the private sector to inject an element of business reality into arts board thinking and to “maintain the interactive continuum” within the arts.
Meanwhile, for the last four years the Clore Leadership Programme has been running its own board development advisory service, with training days not just for potential board members but for CEOs and sitting chairs, to help them challenge perceptions and “harness creativity and clarity of thought; and to realise the aspirations for their organisation”. Theirs is a popular programme which is sold out as soon as each new prospectus is announced, and the Clore will be working closely with Ginny Spittle, says its director, Sue Hoyle.
But, she says, it’s going to be harder for boards now to get the balance Davey wants between financial stability and bringing on “the surprising and the new”. The Arts Council’s £40m Catalyst fund has been devised to encourage boards to find other sources of income using the tried, tested and discarded (by politicians) Arts & Business ploy of matching funding.
There may, however, be an object lesson in an organisation that started life as the gleam in the eye of the millionaire toymaker, Sir Torquil Norman, and no subsidy at all, which this summer is celebrating five years since it opened. The Roundhouse’s board is an extraordinary mix of professionals who have in common their devotion to the mission of giving young people from difficult histories the better future they go there to find. Norman was the first chairman, succeeded by Travelex’s Lloyd Dorfman and this year by Chris Satterthwaite, chief executive of Chime Communications.
He was interviewed for the job, as were four others, after having been headhunted by a committee chaired by Nick Allott, the West End producer and long-standing board member, which vets all prospective board members. Others include the ex-UBS chief Alan Hodson; Wayne McGregor, the choreographer; Baroness Ginny McIntosh, ex-RSC/National Theatre; TV Dragon Deborah Meaden; EMI’s UK president Andria Vidler; the former cabinet member and arts minister Estelle Morris.
Unusually and controversially for some who think this practice is a blurring of distinction between policy-making and strategy (and has to have the Charity Commission’s approval), the Roundhouse’s chief executive and artistic director, Marcus Davey, is a full member of the board, not merely there to report and be given the board’s decisions.
“We’re made to feel a genuine part of the place and its spirit,” Estelle Morris says. “There are big bands in the main space, but in the little theatre there are teenage bands just starting off, the same age as the audience. I went to listen, and there was Torquil – I was 30 years older than rest of them, he was 50 years older, and nobody thought it was strange.”
[Box 1]
“To be successful, organisations need a combination of effective executive leadership and good governance: that’s why I view board development as a vital part of our work in strengthening leadership in the cultural sector.”
Sir John Tusa, Chair, Clore Leadership Programme.
[Box 2]
The 2009 Cultural Leadership Programme’s key questions about governance:
Who owns the vision, the board or CEO?
How can the board remain informed and keep an independence of mind?
Should the chair be a visionary, a facilitator or a leader?
How do you overcome conflict at board level?
