As we watch the governance of our financial institutions crumble around our heads, the talk of “principles” and “values” has become even more important. “Governance is also about Board behaviour” stipulated Baroness Usha Prashar, former first civil service commissioner and former of Arts Council England member, highlighting the need for value-based leadership and a modus operandi that evidences trust, respect and honest communication. “Agreeing the mission is not a one-off exercise” - the board needs to build in time for reflection and strategic thinking, enabling it to step back and maintain the “helicopter view” of the organisation. She also emphasised the board’s responsibility to keep an overview of sustainability of all types: people, talent, resources and networks - so that the wider health of the organisation remained in sight.

The Leadership Axis panel provided two contrasting examples of the key relationship between the chair and chief executive. Charles Mackay (chair) and Michael Day (CEO), Historic Royal Palaces, outlined a formally defined relationship of planned, regular meetings and structured dialogue. Reflecting on their leadership of the highly acclaimed Contact Theatre in Manchester, Wylie Longmore and John McGrath (former chair and CEO respectively) posited a more fluid approach, drawing implicitly on the revised mission of the theatre to ensure that the Board and organisation truly focused its governance and delivery around the youth-based priority articulated in its Mission. But what shone clearly through (despite the starkly different approaches) was how much they had in common: A shared vision, trust, respect, a constructive partnership and “no-surprises”. They built a shared view of the objectives and strategy, then set out distinct priorities for each to follow through - efficient and effective partnerships in action. Prue Skene, governance associate and chair of Rambert Dance, re-emphasised the essential need to get the recruitment and succession planning right, both of the chair and CEO.

The Outside In panel brought an eclectic range of insights from Australia, Europe and the United States. That often admired “Give, Get or Get Off”’ approach that characterises the involvement of the private sector on boards in the US was presenting some significant challenges for cultural organisations for their cultural organisations in the current climate. Russell Willis-Taylor, president & CEO of national strategies and formerly executive director of ENO, cautioned for careful handling of the American model. President Obama’s unprecedented fiscal stimulus is unlikely to reach the arts, and there are already signs that cultural organisations in the States are facing their economic downturn earlier than here.

Governance Now targeted the chairs and CEOs of cultural organisations whose experience and expertise would add to the debate, so the conference included a working lunch with hosted roundtable discussions for sharing, probing and reviewing key topics.

• Who owns the vision, the board or CEO?
• How can the board remain informed and keep an independence of mind?
• Should the chair be a visionary, a facilitator or a leader?
• How do you really overcome conflict at board level?

were questions posed and debated.

Governance Now comes after a range of interventions by the Cultural Leadership Programme to research, explore, stimulate and inform good practice in this key area of challenge for the cultural and creative industries. A publication, is now being developed to capture the key themes of the day and will be available early this summer.

Ken Lewington, charity trustee
Many museums are charities, registered as limited liability companies. Typically, the Memorandum and Articles of Association (M&As) will set the framework for governance and include conditions regarding the admission of members, their rights and privileges. The number of members with which, at incorporation, the company was registered will be specified. The number of members who will hold trustee (i.e. director) status will be set out, as will their powers and duties. The trustees may receive applications for ordinary membership and will use their discretion as to admission to membership. A museum may have some members nominated by the DCMS, conditional on them being elected as trustees.

The Charity Commission recognises the role of ordinary members. Commission document RS7: Membership Charities, gives the characteristics of a member (as distinct from a trustee) as, “An individual with the ability to affect the governance of a charity by voting at the charity’s annual general meeting and who meets all other criteria for a member as set out in the charity’s governing document”. The benefits such members bring are an ability to “influence the decisions a charity makes” and to “help to keep the governing body fresh, accountable and credible”. So, on paper, everything is as it should be. In practice, however, things can be alarmingly different.

In 2006 I applied for membership of one museum and, in 2007, another. Each is a charitable company and receives financial support from the DCMS. Their Articles provide for an unlimited membership. However, the trustees will not admit individual ordinary members. One responded: “At a meeting of the board on the 4 December trustees discussed the policy for admission of new members and agreed that membership of the company should only be extended to trustees” (though Articles invariably stipulate that trusteeship may only be extended to members). The other said: “Whilst the Articles allow for unlimited membership, they also state that the members are the twelve original subscribers and any others they admit. The board has chosen not to admit additional members…”. Operating in this way means that there will be no ordinary members to attend the Annual General Meeting (AGM), to adopt the annual report and accounts, to appoint auditors, to propose another member for the board or to elect or ratify the appointment of trustees.

So if a vacancy on the board occurs the trustees can headhunt a promising candidate and, since the Articles can stipulate that “No person who is not a member of the company shall be entitled to hold office as a trustee”, they will simultaneously grant membership to the selected individual and co-opt him or her into trusteeship. However, with ordinary members provided for but excluded, and so unable to ratify this at the AGM, can such appointments be legitimate?

In April 2007 a Charity Commission case officer wrote to me saying that one of the museums that refused me membership “…does not seem to be a membership charity as such”. Conversely, another then said, “…the charity is a company governed by Memorandum & Articles and provides for membership…” And, “I agree that if the trustees will not allow an ordinary membership this appears to conflict with what is intended in the Memorandum and Articles.” In August 2007, a letter from the museum’s Director said, “In the circumstances, we have no more to say on the matter, and I trust you will understand that neither I nor any other member of the Trust is willing to continue this correspondence, but I wish you well with your enquiries elsewhere.” The Commission concluded its correspondence to me saying, “I hope that you continue with your attempt at becoming a member of this charity, however, the Commission simply has not the resources to pursue this matter any further.”

A policy of exclusion enables boards of charitable companies to act as self-selecting elites; words like “oligarchy” and “closed shop” come to mind. If the Nolan Committee report on standards in public life is concerned to eradicate the “tap on the shoulder” process of recruitment to boards, then the actions and manner of governance of board members of some of our cultural institutions has to change. The starting point must be for the Charity Commission to find the resources, and to compel every museum that is constituted as a charitable company but does not admit ordinary members, to do so forthwith.

Christopher Gordon
It was interesting to read your important interview with Roy Clare (AI 228) which, probably quite fairly, discusses the ‘local’ Board problem. The article reminded me of a conversation I had with Lord Nolan about ten years ago following a lecture he gave at Southampton University. This touched on the ‘national’ problem and still seems relevant today. It was clear from Nolan’s talk that he was extremely disappointed with the actual outcomes of his Report. I asked him privately if he could identify more precisely what he thought were the causes of his proposed reforms not working as intended and for his having come to such a negative conclusion so soon after publication.

He answered me in three words – ‘the civil service’. His Committee’s strong desire had been to open up and liberate ossified systems but, he explained, the fact that the processes for senior appointments were still to a large extent in the hands of civil servants was an almost certain guarantee of continuing failure. The primary concern of your average civil servant, he suggested, was to protect his/her own back and eliminate risk. This meant that at every stage controls, filters and tendencies favouring unadventurous conservatism dominated, while the whole process ratcheted up complexities in a way that was antithetical to his intention. A complete turn off for most of the people the Committee wanted to open up to.