Good governance for arts boards
‘With art you have voice, with voice you have freedom, with freedom comes responsibility.’
Art has been an integral part of human expression, communication and reflection since time immemorial. From cave paintings to Renaissance masterpieces, from street graffiti to digital installations, from orchestral eloquence to punk rock, from live theatre to opera, art transcends social and cultural boundaries and connects people across generations. Healthy societies need a dynamic arts sector with engaged artists across the spectrum of different mediums asking us who we are, who we have been and who we could be while entertaining, soothing, inspiring and challenging us.
One of the perennial challenges for the arts sector is having in place the structures that can develop, nurture and elevate artistic voice. Indeed, anyone who has transitioned from being a practising artist to joining the board of an arts organisation understands that sustaining arts organisations requires more than goodwill and insight into the artistic process – it also requires good governance. The type of questions you are required to ask and the skills you need to exercise on a board are different from those that fuel your artistic endeavours, and it is important to understand this landscape.
In 2020, ICDA and the Australia Council published ICDA Spotlight Report: Arts and Culture Governance, which underlined the unique nature of the sector but also provided an effective comparison with and benchmark for other not-for-profit companies and organisations. The report highlighted how arts sector organisations were travelling in relation to governance considerations.
While the sector underwent significant upheaval during the pandemic, the findings in this report remain extremely relevant. In this guide we shine a light on these findings and offer frameworks, tools and resources to inspire healthy governance in the areas identified.
All of these guidelines are offered in order to help arts boards to build a healthy governance framework in order that they can sustain the important work of enabling artists to have a voice and communities to benefit from this.
ICDA Spotlight Report: Arts and Culture Governance – Key Findings and Recommendations
Key finding 1: Board diversity is a mixed bag
Arts boards generally have a good gender balance, and are inclusive of older people, arts consumers and LGBTQI people, but many lack representation of young people, people with disability, Aboriginal and Torres Strait Islander people, and people from culturally and linguistically diverse communities.
Addressing this finding
Having diversity of people, ideas and skills at board level can help healthy decision making and good governance, which in turn contributes to organisational innovation and sustainability. Below are links to a help sheet on why and how to achieve diversity as well as a board skills experience matrix designed to assess board skills and plan for the future by identifying the skills, experience and representation that would enhance the capacity of your board.
Key finding 2: There is often limited introspection (board review process)
Arts and culture organisations are less likely than others in the not-for-profit sector to have a formal board review process in place (10% versus 30%), and 41% of senior leaders in the arts and cultural sector say their board does not review its own performance in any way.
Addressing this finding
The following tools can be really effective in helping boards review themselves:
- Board self-assessment tool, online version: This is a fantastic online assessment tool – as you fill it out, it will provide recommendations, further tools and resources that can help your board to develop and improve in areas where you need help.
- Board self-assessment tool, Excel version: This is a downloadable Excel version that can be done by an individual or by the whole board.
Key finding 3: There is often limited CEO oversight
Most boards in the arts and culture sector (73%) have reviewed their CEO recently, but around 20% have never done so, a higher figure than in the general sample (16%).
Addressing this finding
A really important function of the board is working with, supporting and overseeing the CEO (or general manager) of the organisation. Part of doing this effectively is to undertake an annual review. ICDA’s CEO annual review template can help organisations that are looking to undertake a review but are unsure about what questions should be asked. A help sheet about the relationship between the CEO and the board is also available.
Key finding 4: Board members are happy and productive
Most board members (94%) in the arts and cultural sector enjoy their role as board members, and most (88%) say they clearly understand their board responsibilities.
Addressing this finding
It’s fantastic that most board members surveyed enjoy the role and feel that they clearly understand their responsibilities. Our experience suggests that the more boards clearly understand and embrace their governance responsibilities, the more likely they are to be able to sustain the organisation. For boards that lack confidence in their governance knowledge we offer a range of training options for individuals and the board as a whole, linked below.
Key finding 5: Inductions underdone
Less than half of arts and culture board members say they received a good induction when they joined the board.
Addressing this finding
We believe it is critically important to put in place an induction process for new board members. Here are some tools that can help with setting this up:
Key finding 6: Fundraising and governance are top training needs
66% of respondents say they would benefit from fundraising and grants training, while 40% say they would benefit from governance training (a third have never participated in this type of training). A total of 28% would like some impact evaluation or financial management training, or both.
Addressing this finding
General governance training can be delivered face-to-face or online. ICDA also offers self-paced compact courses and a Certified Community Director course that board directors can undertake to improve their governance knowledge, as per the links below.
Key finding 7: Board members are lacking in tracking
16% of respondents from arts and culture organisations say their organisation does not measure success in any way, a figure that’s consistent with the sample as a whole.
Addressing this finding
Increasingly it is expected that organisations collect, analyse and share data about the impact of their endeavours. Without guidelines or experience this can seem to be a daunting task. Below is a link to a free workbook that can get you thinking about how to measure what matters.
Key finding 8: Arts and culture organisations are doing it tougher than other sectors
Three-quarters of not-for-profit arts and culture organisations are in a good financial place or are at least breaking even, though 24% say they are struggling financially. Arts and culture organisations are doing it tougher than others, recording the highest percentage of struggling organisations of any sector, and the lowest percentage of organisations saying they are in good financial health.
Addressing this finding
Developing a funding strategy that considers the seven funding pillars is a significant way that boards can contribute to the financial health of the organisation. Information and guidelines can be found at Our Community’s Funding Centre, linked below.
Key finding 9: Board members often have limited financial literacy
45% of arts organisation respondents say that just some, few or no board members have sufficient understanding of the organisation’s finances.
Addressing this finding
Financial literacy is critical for board members. While the treasurer will generally be the board member most familiar with the detail of the finances, all board members are equally responsible for the financial health of the organisation and should at least know what questions to ask. Below is a link to an ICDA online compact course called Managing Your Funds, which provides an excellent overview of board financial responsibilities. There’s also a link to a range of tools and resources that can be found on ICDA’s website:
Further reference