Beyond the governance gaps

Past and present board members and those who support our boards—I want to thank you. In the machine of arts, cultural and not-for-profit governance you are one of our most necessary cogs: legislated, expected and required. From statutory authorities to volunteer-run collectives, you underpin all of our work.

The skills you must wield are varied and plentiful, yet your presence, consideration and time receive little or no remuneration—and often little thanks. But your work is a literal gift, an extraordinary, mandated generosity—without which our organisations would not be allowed to exist.

It’s not you, it’s me the system

Bad boards have made for even worse headlines over the past couple of years. In Boorloo/Perth, the boards of Black Swan State Theatre Company and Barking Gecko Theatre controversially ended their CEOs’ contracts in 2019 and 2021 respectively. In a move condemned by the company’s founders and peers, Black Swan’s CEO was replaced with one of their own board members—with no experience of running a comparable arts organisation. Sponsors and stakeholders expressed concerns over both decisions, including fears of board overreach, conflicts of interest and potential use of public funding for unnecessary HR processes.

In a surprise announcement at the end of 2021, the Circus Oz board in Naarm/Melbourne announced its plan to wind up the organisation after being unable to convince its membership to change its governance structure, which would have involved members giving up their decision-making power. After years of governance issues, the company’s funding was already under review by state and federal governments, which were assumed to be behind the recommended ‘corporatisation’ that the proudly artist-led organisation dismissed. The members quickly appointed an entirely new board, which hasn’t made any further public announcements in more than a year since—except about their 2023 Melbourne Comedy Festival show.

Greenwashing is starting to cause governance headaches too, with high-profile board members stepping down to protest unethical corporate sponsorships—such as Benjamin Law’s departure from the Sydney Festival Board in 2022. In New Zealand, ongoing governance concerns were blamed for the vote of no confidence that saw the entire board of Museums Aotearoa step down in 2021. Similarly, the board of Seattle’s ACT Theatre voluntarily stepped down in 2022, other than three position-holders required by US law—the chair, secretary and treasurer. It seems, though, that their ambition radically to rethink their governance has resulted in the reintroduction of a remarkably similar model.

Meanwhile, new research has revealed boards’ poor track record in most of their responsible areas. Notably, this includes: lack of diversity, limited or non-existent introspection and review, limited or negligent CEO oversight and regular failures of duty of care, not to mention the lack of inductions, training, financial literacy or direct board involvement in financial sustainability.

Even our successes have been damned with faint praise and lower-than-low expectations. While, on average, board members are ‘strongest’ when acting as ambassadors, in no way does this equate to ‘strong’. Only 40% attend their organisation’s events; less than half understand or are able to speak about or on their organisation’s behalf; and less than 20% are seen to carry out their roles appropriately and contribute to positive and productive workplace cultures most of the time.

I’m sure some of you are shocked by these stories. I’m sure others are not at all surprised. As the author of some of that work, I acknowledge I may have contributed to you feeling attacked, under-appreciated, overwhelmed or misunderstood. In which case, I’m sorry. It was never about you. It was always about a system I believe is setting you, your organisations and our sector up to fail.

It’s not about #NotAllBoards

I hope we can take this as read: boards and board members can do good work. I am in awe of you and the work you’re asked to do. Let’s also acknowledge the opposite is equally true: boards and board members can damage their organisations, teams and peers. This is not about blame. This is about data. Of course, it’s #NotAllBoards and #NotAllBoardMembers. But the evidence suggests it’s a lot—at least enough to acknowledge the issues and the actions that need to come next. We need to have a genuine conversation, not defend against defensiveness or bolster board fragility. We need to do what board members should do best: be allies for our organisations—even when that means taking an uncomfortable look at ourselves.

The information gap

In 2020 the Arts and Culture Governance Report from Australia Council for the Arts, Institute of Community Directors (ICDA) and Our Community began to shine the spotlight on Australian arts sector governance. My 2022 survey did the same, recording nearly double the number of responses from serving and former board members, CEOs and other sector leaders, employees, artists, contractors and more. All over the world, colleagues, researchers and cultural organisations are also approaching this issue from a range of different angles. So while it’s true, as Algonquin playwright Yvette Nolan writes, ‘every dysfunctional board is dysfunctional in its own way’, this research has articulated significant consensus governance issues that we’ve all had to muddle through for years. Our poor-performing boards, however, are symptoms of a bigger system problem. Our governance model is the cause.

With a few tiny variations, our national Corporations Act and each state and territory’s incorporated association laws impose a hierarchical and corporate structure on not-for-profit governance that attempts to be all things for all organisations. Statutory authorities, public companies and other incorporated structures aren’t much different either. The statistics show this approach isn’t working. ‘One-size-fits-all does not fit anyone,’ Nolan writes. ‘And has created a culture that allows dysfunction to hide behind a structure that gives the appearance of legitimacy, the illusion of oversight.’

Meanwhile, the governance traditions and training that have evolved around this legislation have reinforced our understanding of unquestioned ‘best practice’ governance. However, these familiar, ‘business as usual’ recommendations are based on colonial, military and patriarchal structures that are often antithetical to contemporary not-for-profit or community-engaged work, and are not keeping pace with the ways in which the sector continues to evolve.

‘Organisations are facing unprecedented changes in their environments and, as a result, are transforming how they operate and fulfil their mission,’ the Ontario Nonprofit Network (ONN) notes in their newly launched Reimagining Governance Lab. ‘However, the fundamentals of governance design in nonprofit organisations haven’t changed a lot from decades ago when boards were put in place to create more accountability.’

If everything else in the world is changing, surely our governance practices need to change too. Not doing so will perpetuate the unreasonable, unfair and unnecessary burden of expectation that it’s no wonder boards are often unable to meet.

The awareness gap

We know the problems. We can even prove the problems. The information and evidence gap has closed. I believe what we’re experiencing now is a gap between acknowledgement and self-awareness. I speak to a lot of boards and board members who nod in vigorous agreement at every grim revelation and research finding, but who are much less likely to realise the statistics are about or apply to them too.

One aspect of this is practical. Finding the time and energy to reflect on (let alone reimagine) our organisations’ governance is a big ask when many of us are already struggling with the current model’s requirements, and mostly doing so in our own, limited time as volunteers.

But if the research shows that most Australian arts and cultural boards are experiencing some or all of these issues, why would we think ours exempt? And if our boards are resistant to comparing our performance to the sector’s shared experience, what are we trying to hide—even (or especially) from ourselves? ‘Five, ten years ago, we had a lot of pushback,’ ONN’s Erin Kang says. ‘Over time, we noticed a shift in appetite. Part of this was finding arguments that were outside the individual and shifting to making things better for board members.’

We need to bridge the awareness gap by making board members allies for the change that needs to come, and equip them with the confidence that they’re meeting their legal and fiduciary obligations and duties of care. We need to bring bold, rigorous and uncomfortable discussions into our boardrooms—not just about our performance but also about how we’re expected to perform, and whether those expectations are necessary, efficacious or fair.

The imagination and implementation gap

Looking at arts governance as a systems issue, not a people issue, is hugely empowering. It makes it something we can review and improve, rather than resigning ourselves to expecting too much or throwing money at training that won’t stick.

It does, however, create another gap: between knowing change is needed and knowing what and how to change (including dedicating the time and resources we need to find out). This will always be a challenge in an under-resourced sector. Two-thirds of Australian not-for-profits turn over less than $250,000 each year. Our underpaid and overworked teams and boards are used to exceeding minimum requirements on perpetually dwindling resources. Now, amid our ‘post’-COVID burnout, many are trying to move from this ‘less is more’ to a ‘less is necessary’ mindset—making governance one of the most problematic and most overlooked parts of our work.

Meanwhile, the world is a bin-fire of multiple, ongoing crises that have put systemic change at the bottom of our ever-growing to-do lists—while simultaneously bringing the challenges of our governance model into very sharp relief. ‘The model has failed,’ Nolan says. ‘In these COVID times, these #MeToo times, these Black Lives Matter times, this new civil rights movement time, the failures become even more obvious.’

Those with greater capacity will need to lead the way. Kang talks about the importance of ‘early wave riders’ in implementing governance innovations. ‘The bigger organisations are key because they have the capacity to do the work and thinking involved,’ she says. ‘Doing so gives the rest of the sector permission and provides case studies others can work towards.’

We also need to support one another while we wait for the r/evolution to happen. Self-care and duty of care are the pointiest ends of most sectors right now, and the things we’ll need to address before we can think about doing things differently longer term. This means we don’t only need to be allies for change, but for the ongoing challenges of navigating our flawed system while waiting for the change we need to come.

Make the best of it

Our legislation requires us to have boards. Our funders, members and stakeholders expect them. We’re used to them being around. For most of us, boards are the way that business has always been done. We can acknowledge, I hope, that our governance model is broken. We’re not yet in a position to throw it out and start again, but that doesn’t mean we can’t make the best of our imperfect situation. We are used to applying training and other governance resources to this task, but the research suggests this investment is neither particularly effective nor something that lasts beyond each trained board member’s term.

This never-ending investment cycle generates fantastic business for governance-training providers. In spite of the COVID downturn, the Governance Institute of Australia turned over $9.9 million in 2021, dwarfed by the $72.4 million turnover of the Australian Institute of Company Directors (with nearly $1 million in surplus, equivalent to two to four small-to-medium arts organisations’ entire operating budgets). In the name of full disclosure, I should note that I too make part of my income from governance consultancy, albeit nothing on that scale.

This isn’t, however, such good business for the organisations we train. Board members move on and usually take their learning with them—ideally to another board in a sort of sector karma in which we’d benefit from another organisations’ investment, though the evidence suggests that’s not the case. As allies, governance trainers and service providers need to acknowledge the irony at the heart of this business model—supporting sustainability while asking organisations to make an unsustainable investment to train each new generation of board members who come through.

Bend the rules

Until we can imagine and implement something new, we’ve got to make the best of what we’ve got. So, if training isn’t answer enough, we need to find ways and work-arounds to create better conditions for governance that still technically comply with the rules.

We need to know what those rules are to bend them, so some of this starts with unlearning. While we think we know why things have always been done, we find there’s more room for innovation than we’ve been told. ‘Most practices we’ve associated with boards over the decades are completely optional,’ Vu Le writes for Nonprofit AF. ‘They are traditions we’ve just passed down to the point where we think they’re legally required, but they’re not. The board hires the ED. Who says? The board meets once a month. Why? The board approves the budget. Not necessarily!’

Organisations all over the world are beginning to experiment with micro or ‘minimally viable’ board models that reduce governance structures to the minimum size and remit needed to satisfy legislative, funding and other requirements. This usually involves fewer board members, office holders, responsibilities and meetings than we’ve come to think of us ‘normal’ operating procedures. In Australia, for example, it’s generally perceived as ‘best practice’ to have eight to twelve board members on a not-for-profit board. However, the Corporations Act only requires companies limited by guarantee to have at least three directors, including one nominated office holder (the secretary).

As incorporated associations should only operate in their respective regions, their legislation varies slightly between states and territories. However, most similarly require only a single nominated office holder (usually the public officer, who often doesn’t need to be a member of the board at all).

Technically speaking, the Northern Territory has the most stringent legislation, but still only requires incorporated associations to have at least five board members. The Australian Capital Territory, New South Wales, Queensland and South Australia only require three. Even more surprisingly, while Tasmania, Victoria and Western Australia require a minimum number of organisational members in order to incorporate in the first place, they don’t specify a minimum number of board members. This information is not common knowledge, and some of it is really hard to find. I spoke to someone at Consumer Affairs Victoria to verify their requirements, who acknowledged the only place they could find them written down was on a third-party information sheet that was more than five years old.

While the recommendations of each state or territory’s model rules may differ, they are just that: recommendations. Big boards aren’t required. Monthly or even bimonthly board meetings aren’t required, nor pages and pages of board reporting that takes staff away from their work.

Chairs, vice-chairs and treasurers aren’t required either. There is absolutely nothing that says boards need to be hierarchical or—aside from a few requirements about obligations to members and government—to operate in the way ours usually do.

The familiar nominating and seconding motions of Roberts Rules of Order are based on military and parliamentary procedures that date back to 1876—but the world has changed an awful lot since then. Eradicating what US arts leader Michael J. Bobbitt calls these ‘archaic, pointless and extremely white’ agendas could be a good starting point to ‘investigate new forms of decision-making: emergent strategy, consensus voting, or decision-making processes as they have long been practiced non-white cultures’.

Many of the other policies and procedures we use around governance are also of our own making. Working out what’s required and what’s optional could be a simple yet revolutionary first step in realising we have more choice and control than we thought. ‘Many practices are ensconced in by-laws, Le writes. ‘But by-laws are easily changed.’

Find your own way

Needing boards and knowing that boards are the best way to achieve what we need are two different things. This is not to suggest that minimally viable boards will fix all our governance woes. It’s fair to assume, however, that reducing the roles and expectations of what we know as boards would make those boards more likely to succeed. Reducing the number of board members we need would also make it easier to recruit and retain them.

If we were designing the system from scratch, I suspect we’d think it unreasonable to task unpaid or low-paid board members with everything we do. At present that requires board members to have a disparate mix of skills and expertise in order to provide oversight and compliance; strategic direction; decision-making; stewardship; risk and crisis management; and the recruitment, management and duty of care of our CEOs or equivalent. Let alone providing free access to relevant sector skills and experience; being public-facing ambassadors; and directly supporting our organisations’ finances through fundraising, soliciting donations, sharing their personal contacts or becoming individual donors themselves.

The minimally viable board provocation reminds us we don’t need a single entity that does all of these things. Allocating fewer people to our legislatively required tasks could free up resources to meet the other ‘board’ responsibilities in more creative, representative and effective ways. ‘I honestly think we can come up with a better way to do the accountability, cheerleading, support, and advising that boards at their best should and could be doing,’ Bobbitt says. ‘The way we are currently operating isn’t working. I triple dog dare us all to use our imaginative skills to redesign it.’

Blow it all up and start again

‘We’ve been having this discussion on repeat for years, emphasising the systemic white supremacy and patriarchy that plagues the non-profit Board of Directors model,’ Brendan McMurtry-Howlett wrote as part of Generator’s Governance Reimaginings blog. ‘But we haven’t really had a clear alternative to point to.’

We might not be able to parachute into our future governance utopia, but we need to start to imagining what it could look like when we’re there—particularly as this imagining will fuel the legislative revolution we’ll need. If starting again, how would we articulate what organisations really need and how best we could provide it? How could we embed equity, diversity and anti-oppression into postcolonial, post-patriarchal and decolonised governance structures? How could we all be better allies for the organisations we love?

As board members (or whatever we call ourselves in our newly bendy structures), we can begin this process by asking big, foundational questions about why we think what we think; why we do what we do; and how we can do things differently, particularly in terms of how decisions are made—and by whom. ‘The whole ecosystem of your organisation should be part of governance decision-making,’ Bobbitt says. If our expertise primarily lies in our staff, artists, audiences and communities, ‘Boards should be players in a partnership, not the ones in charge.’

Tweaking the existing system isn’t going to cut it. We can’t just ask who’s not in room, we need to ask if we need a room at all. We need to train ourselves to think beyond boards in order to open our minds to something new—whether that’s a single model or a pick-and-mix range of options our organisations can choose from. McMurtry-Howlett argues that: “Governance is no one thing for any one person. It is about a practice of decision making that is undertaken in community. There is no magic wand, or perfect structure that will solve all the problems. Anything we create must be engaged with, nourished, and sustained by those impacted by and connected to the organisation.”

That includes arts funders, whose expectations and funding agreements drive governance practices as much as legislation. In this, the Canada Council has led the way in recent years, Nolan says, by allowing ad hoc groups with ad hoc governance models to access funding. In this way, funders are in the unique and exciting position to be able to lead this charge, rather than reiterating existing best-practice that the sector has already surpassed.

Keep governance in the spotlight

Governance is not an academic exercise. Volunteerism was decreasing even before the pandemic. Bad boards making the news have made governance even less attractive, as have workforce issues and sector-wide exhaustion. Many organisations are too busy struggling with compliance (number of board members, attendance at meetings, etc.) even to think about the system in which we perform. This means we need to fix the system that requires us to have boards before we run out of board members in it, not the other way around.

We also need to provide safe and anonymous ways for our peers and teams to contribute to this discussion. The innate power dynamics of arts governance make it difficult for many of us to speak out, in fear of our current or future work, board roles or relationships.

In pulling together this research over the last several years, I feel I’ve become an unofficial sector therapist—collating and sharing governance horror stories that board members, artists and arts workers are unable, uncomfortable or scared to share. There is strength and solidarity in hearing and sharing these types of experiences, and huge value in strategic venting to our similarly affected peers. But we need to be able to critique our boards, colleagues and governance culture without fear of making that culture even worse. We need to put and keep this discussion in the spotlight, where it belongs.

This means being allies for our own sakes, as well as for the work our teams and artists do. We need to be brave and open and focused on our purpose: being the best stewards of our organisations we can be. Board members, I know you have it in you. I can’t wait to see what you can do.

This article was originally published by Meanjin.

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