Guest Blog: Charity governance and artistic endeavour

By Joe Roberts, Trustee of Southwark Playhouse. Follow Joe on Twitter: @jr4618 

Events in the last few years have given trustees plenty of reason to pause and reflect on how well they really understand what’s going on at their charity. Alan Yentob, so often at the frontline of trends, has now given us the “select committee test” which challenges whether we would be able to explain the activities and behaviour of our charity to a group of MPs while televised. But what has not changed across this period is the three core responsibilities of trustees, namely: overseeing a well-run operation that complies with legislature; sensible financial management; and ensuring activities further the charitable mission.

This leads me to a question that is probably rarely discussed at trustee meetings but for which a number of trustees may hold a tacit or silent understanding: do some trustees have more responsibility for some of the above than others? While some trustees may sit on differing subcommittees or have specific roles, the answer, at least from a legal perspective, is no.

This question is most pertinent in sectors where the core activity may be viewed as esoteric, such as is the case with the arts. My guess is that in practice, in the same way non-accountants may not regularly challenge financial plans, a lot of trustees lacking a background in the arts may feel a little uncomfortable questioning the artistic direction of their organisation. On what basis can the programme be challenged? What does success look like? What alternative can I suggest?

These feelings run counter to good governance. In the same way a CFO/FD/CEO should be able to explain the financial strategy, an artistic director should be able to give answers to the below three questions in an understandable format:

1. What process is undertaken to decide the programme and what other options were considered?

2. How will the programme support the financial sustainability of the trust?

3. How will the programme fulfill the mission / objective of the organisation?

Good governance will further suggest that targets are set and performance measurement tools agreed for how performance will be assessed.

Before I go on, I should point out that I understand the good reasons why these activities are not undertaken regularly. Viewing a work of art is personal and a difficult thing to quantify; gathering data can be expensive and there is no agreed format for comparable measurement; performance measures may stifle creativity and innovation which is intrinsic to artistic practice; focusing on audience numbers risks ignoring the artist(s) and the practice which may be more or at least as important; and there are of course more.

If the arts sector does not, however, more widely measure impact there are three key risks:

1. Internal uncertainty:

Trustees and management are unable to fully assess the appropriateness and success of the artistic programme which may lead to a failure to foresee problems before they occur, difficulty in identifying drivers of distress and in guarding against mission drift.

2. Over-reliance on the instincts of funders:

Without demonstrable impact and/or impact targets, organisations may struggle to compete for funding against those with are able to. In times of austerity the return on investment is (rightly or wrongly) more keenly viewed than previously. If an organisation cannot explain in an easily understandable way its impact and how it will be measured, it will be reliant on the instincts of those judging their application as to what they consider worthwhile.

3. External scrutiny:

The public and the media are taking a closer (and unfortunately often more cynical) view on the activities of not-for-profit organisations, and in particular those that receive public funding. In the face of this; organisations should not hide from the reality that programming includes an element of speculation and risk taking and this is essential to meet objectives that may include ‘nurturing talent’, ‘furthering artistic practice’ and ‘developing new, longer term audiences’. An organisation should get on the front foot by highlighting the critical relevance of speculative funding to achieving its social mission whilst noting how such investments will be funded and under what criteria and metrics it believes success should be measured. This does not have to be overly-complex nor financial and methods used may be, for example, headlines generated, critical reception, visits from out of borough, audience feedback, and the success of those involved in 5/10/20 years’ time.

Like the commercial sector there is no formula for success in the arts or the wider charity sector, and risks can lead to big rewards and big failures. Impact measurement is not a justification for overly-prudent behaviour. Rather it is a way of better engaging external stakeholders in how an organisation benefits society through its actions. Impact measurement can be an opportunity and format for shouting about how wonderful and important the art is, and that’s something all trustees should be able to get behind.