Commentary: Put your board on a diet

Joe Patti, Inside The Arts' blog "Butts In The Seats", 8/13/12

The Chronicle of Higher Education had a piece about the problems inherent to large board size on their website today (subscription required). While the article is about large boards in higher education, there are lessons to be learned [by arts organizations]:

Governance experts say such large boards dilute accountability and invariably allow a small group to seize control of an institution, leaving the remaining trustees on board merely to cut ribbons and big checks. But it is easy to see why a college might want a big board. It is simpler to add trustees than to remove members who are no longer pulling their weight, and growth can be justified as an effort to broaden the diversity of opinions in a group. It is also true that there may be no better way to cultivate donors than to give them active policy-making roles at a college.

These two paragraphs appear to outline all the major problems faced by boards -- lack of accountability, small number of people really in control, some members not engaged in the board functions and valuing board members pretty much solely for their fund raising capacity. Obviously, these problems can plague boards of any size. But the problems and dysfunction can become more pronounced and harder to avoid as the group grows larger. The article provides a number of examples where weak controls and oversight brought on by large board numbers were the source of financial scandals. While the article doesn't draw a direct link, it occurred to me that having large numbers at a meeting means that certain people never get a chance to talk and therefore are never invested or feel responsible for the decisions being made. Another contributing factor seemed to be a lack of board education. Recently when I read about board relations, the importance of educating boards about their governance and oversight responsibilities seems to be discussed with greater frequency. In fact, the idea that board members are fund raisers and need to "give, get or go" seems to have taken a back seat to the importance of boards contributing to good governance and planning. Perhaps the conversation has turned in this direction as reaction to Sarbanes-Oxley or perhaps the non-profit sector has started to recognize the importance of the board to organizational leadership.

Commentary: Recruiting competent board members

Joanne Carman & Richard Clerkin, Philanthropy Journal, 8/10/12

In our recent poll, respondents indicated they frequently face challenges in recruiting competent volunteers to their board. The economic downturn the country has been dealing with for more than five years has made it even more challenging for more than a third of the respondents to recruit competent board members. At a time when nonprofits need skilled and dedicated volunteers to help make the strategic decisions necessary to navigate difficult financial times such leaders appear to our survey respondents to be in short supply. The main challenge that emerged from our poll, as one Philanthropy Journal reader summed it up, is: "Finding those committed to fulfilling ALL the duties associated with the position." A first step nonprofits need to take when facing the challenge of recruiting board members is to determine the knowledge, skills, abilities, perspectives, and connections they want on their board. Not all board members can be expected to have each of the desired qualities, so nonprofits need to fill their board with a collection of individuals that in total have the assets needed to govern the organization. Skill and demographic diversity can bring a variety of perspectives on the operational side of a nonprofit and provide key connections to constituency groups that understand how the organization is perceived and that can help manage those perceptions. Patricia Bradshaw and Christopher Fredette describe three common types of recruitment practices nonprofits employ in their search for competent board members.

Print and Publication: publish vacancies on the organization's website and other electronic media and advertise in community-wide print newspapers and newspapers that target specific groups the nonprofit may desire for board representation.

Interorganizational Alliances: to help identify qualified candidates, partner with organizations that have members with the skills or demographic characteristics the organization desires.

Interpersonal Networks: mobilize board members to recruit through their networks. While the first two practices are likely to enhance board diversity, relying only on board member networks for recruitment tends to lead to fairly homogenous boards.

Commentary: What everyone - boards included - should read about capital projects

Janet Brown, Grantmakers in the Arts blog, 8/10/12

I enthusiastically encourage anyone who has ever been involved with an arts organization that renovated, expanded or built new; a board that said, "if we only had more seats, we could sell more tickets;" or a funder that has been asked to support a building project to read Set in Stone, a recently released report from the University of Chicago's Cultural Policy Center and NORC. [This is a] study of arts building projects in the U.S. from 1994-2008, a period researchers refer to as "the building boom." No different than the rest of America, it seems housing for arts groups was developed with the same fervor as housing for families. "Build it and they will come" was the rallying cry of private developers, as well as cultural and community leaders. America was flush with money, banks were lending or giving lines of credit to everyone. City bond ratings were strong and communities were in an ongoing competition to lure conventions, visitors and new residents. Even small cities got into the act.

We found compelling evidence that the supply of cultural facilities exceeded demand during the years of the building boom...there was significant overinvestment in bricks and mortar during the building boom especially when coupled with the number of organizations we studied that experienced financial difficulties after completing a building project.

I cannot stress enough how important this study is for our field right now. It coincides in principle findings with the work that GIA has been doing on capitalization. It points out how vulnerable organizations are when moving into a major capital commitment and stresses the need for realistic financial planning beyond the scope of the building project. This study also has great recommendations for avoiding financial woes during and after building projects. As always, consistent and strong leadership always prioritizing mission is the foundation for success. As my dear friend, Ann Katz says, "It's not about the building, it's about the art." All too often, in the heat of civic pride, large donations, famous architects, and more, the idea of sustaining the art that will fill the building gets overshadowed by the building itself.  Please, before you dive into that new building project or fund that building campaign, take advantage of the excellent information on the Set in Stone website.

Commentary: How musicians should answer "the board is upset by your demands" 

Kevin Case, partner at Moen & Case law firm

It is a difficult time for orchestra musicians to be bargaining. Managements throughout the country are seeking major concessions on pay, health care, pensions, and work rules. Sometimes those requests are a legitimate response to real problems; other times, managements are just being opportunistic. It is not always easy to tell the difference, and circumstances will vary widely from one orchestra to the next. But musician bargaining committees should always be on the lookout for certain jargon that managements like to use during negotiations. [Among the] statements musicians should never take at face value:

            "The board is upset by your demands."

This smacks of paternalism. It conjures up an image of kind-hearted do-gooders who are graciously trying to take care of their musician-children, and who can't understand why the big bad union is being so darn mean. In reality, today's board members are sophisticated business people who are accustomed to dealing with unions, and who in their own careers have likely demanded (and received) lucrative compensation packages of their own. Their feelings will not be hurt if the musicians ask for a raise, or stick to their guns on proposals that can be readily justified. In short, they understand that this is business. Musicians should understand that as well -- and always remember that when you sit down to negotiate with management, you are there as equals, not as supplicants. Moreover, in many orchestras, the full board has little involvement with (or interest in) CBA negotiations until the very end of the process. Often a subcommittee of a just a couple of board members deals with the issue. In addition, the only information the board typically receives during negotiations is that which has been relayed by management's negotiating team. Everything the board hears of the musicians' positions and arguments has gone through a filter and been subjected to significant spin. Here's one possible response to this tactic: invite management's negotiating team to bring any board members who are upset or concerned to the next bargaining session, so the musicians can explain their proposals and their justifications. The subject will likely then be dropped.