Corporate governance of arts organisations

Written by: Evan Lowenstein
Over the years I have been involved in the financial management of many arts and non-arts organisations.
I have often been called upon to exercise my skills and training as an accountant to deal with certain specific situations, as well as to see to the general financial well-being of the organisation.
In the early 1990s I was treasurer of 200 Gertrude Artist Spaces when we had to negotiate the steep reduction in funds due to the organisation having invested quite heavily in Pyramid Building society – Pyramid’s collapse left many people quite devastated financially.
Fortunately, the government stepped in and arranged a repayment plan where most people, including Gertrude Artist Spaces, were paid back at least the principal sum.
In the establishment years of arts organisations, there was an emphasis on artists being very heavily involved in the running of boards but not a lot of attention was given to fund raising or governance.
Over the last ten years or so, this has all changed because many arts boards have been seeking people with fund-raising expertise, sponsorship ability or just plain money that they can use to pump into the affected organisation.
This is all admirable and all strength to the boards that have been able to recruit such people, but what I have been concerned about is the need to recruit more people with accounting and legal backgrounds.
The idea of governance is so widespread now that even the smallest boards need to be aware of the pitfalls of running what is a mainly voluntary organisation as a business.
There needs to be a full understanding of the organisation’s constitution, be it model rules as adopted by incorporated associations or the constitution of a company limited by guarantee.
Issues to get one’s head around include: members voting, executive responsibilities and liability issues, as well as financial and other legal issues that can crop up from time to time.
There are plenty of people who are keen to volunteer their time, as I have in the past, and it presents a wonderful opportunity to get involved in the running of an arts organisations.
It is one of the most satisfying aspects of my time spent as an accountant dedicated to the arts.
I would urge those of you that have an interest to participate in these boards.