Wednesday, February 9, 2011

The persistent problem of boards

My good friend, Shoshana, who is a brilliant mind in many of the same themes that we discuss here at ArtsAppeal (she calls it audience development as opposed to experience management, but they're close enough as to be the same thing), commented in my last post about how boards need to be worked into the value equation as well. Oy. What a can of worms...

Let's be clear, we were discussing the decades of thought that have already gone into board development and management back when I was at Carnegie Mellon's Arts Management program over a decade ago, and while ideas were put on the table, I don't think anyone really felt fully satisfied by the discussion in the end. And with so few truly great boards out there, there's a reason to be dissatisfied.

I've seen the gamut, from hands-off status boards to micromanaging boards, and while I don't know that I can bring any more satisfaction to the discussion than my mentor, Dan Martin, I can offer what I hope to see in a board.

The Three Ws: Dan drove these into my head, and I still feel they make the foundation of my thinking on board value. They are:

  • Work: chairing event committees, signing letters for the organization, holding fundraisers, representing the organization at networking opportunities, etc.
  • Wealth: giving money and getting money (note the "and" there)
  • Wisdom: oversight for the organization, using their expertise in their fields to offer advice when asked, knowledge of other philanthropists and how to best approach them, etc.

How each company defines these three Ws might vary by the need of the organization, but they stand as a good starting point at least to open the discussion.

The Fine Line of Oversight: This is one of those areas that really make the most difference in my experience. A bad board is normally bad because of this item right here. A board that doesn't offer any guidance to the organization is wasting everyone's time. A board that micromanages not only drives management batty but is also often counter-productive as roadblocks are put in the way of efficient action and capabilities are lost through the alienation of the organization's staff.

Generally, the perfect balance falls in the realm of hiring the Executive/Managing Director and Artistic Director that has the vision that they feel will most advance the company, collaborating with the Executive Staff to fully articulate that vision, providing advice and assistance when asked, bringing new capabilities to the organization as identified in the vision planning, and fundraising endlessly so that the vision can be achieved.

Note that among the things not listed are voting on every decision that the Executive Staff makes, picking individual shows to perform, hiring officers for the Executive Staff, choosing which consultants the organization will use, and a plethora of other activities that are far too long to list. Conversely, they aren't just there as a status symbol, to show themselves off without contributing more than a fat check.

There is a strange sensation that happens when a not-for-profit board is formed. In the for-profit world, a board that interferes as implied above is generally unheard of, especially if the company is doing well, and those that don't do anything are generally held to fire by shareholders once the excrement hits the fan. Of course, there are no shareholders in NFPs, and so how the board handles these situations comes down, largely, to internal pressure, custom, and management by the staff (a sometimes difficult prospect when NFP staff sometimes don't feel they can push against board members that are almost always higher status than themselves).

Fundraising: If you can't count on your board to give and get money, you need a new board. Period. End of story.

I have been part of too many organizations that didn't scale their board commitment to the size of their organization, either being scared to ask for too much or having not examined the issue in too long. Is there a magic number? No, but if your board aren't all what you would consider major donors (part of your top 20% donors or so for most organizations), if they aren't leading your other donors, if they aren't bringing new donors to you, then they shouldn't be on the board.

Form an advisory board or a business council or what-have-you to keep them involved as advocates or advisors if they do other great things for you, but the place for people that don't have the passion about your organization to find a way forward in your development goals isn't on a board of trustees.

The way forward?: New models for how to create appropriate experiences for all the important people in our organizations are needed. Not every important person to your organization should be shunted to the board as some sort of reward for their contributions, monetary or otherwise. Stewardship paths must exist for those not intersted or not proficient in oversight, vision, and harvesting contributions. As we continue to beat the dead horse of oversupply, there are highly significant returns any organization can achieve just in starting to retool their governance that will show which companies have the wherewithal to be ambitious, moving the ball forward in the industry, and which deserve to fall in the category of "zombie arts orgs". Like I said, I don't have all the answers to be sure, but the conversation must happen and must drive us towards excellence.

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