As the Melbourne Symphony Orchestra (MSO) crisis continues – reaching almost operatic levels of drama after the company’s ex-CEO Sophie Galaise told her story to The Australian last week – it appears this particularly explosive situation points to some similar (though far less dramatic) governance problems that other not-for-profit arts companies have been encountering for years.
At the heart of the issue is that, in the current context, most Australian arts organisations are governed by boards made up of individuals who do not work within those arts organisations, but who are responsible for steering their most important strategic and financial directions.
Essentially, while arts CEOs call the shots on a day-to-day level, the company’s most important “big picture” decisions are in the hands of their boards.
In the case of the MSO crisis, it seems the company’s former CEO Sophie Galaise was able to manage her professional relationship with her Board fairly well over her eight-year tenure (although The Australian’s story hints at existing tensions between Galaise and the company’s current Board Chair David Li AM, who was appointed in 2021).
But during the MSO’s good times, even if there were niggling tensions between the CEO and particular Board members, MSO executive staff worked effectively with their Board to progress the company’s core aims.
However, when the Orchestra needed to take decisive action amid a crisis, the CEO-Board relationship broke down very quickly and led to devastating outcomes for the company.
According to The Australian’s report, Galaise tried to reach two MSO Board members on the day she and her executive team were deciding how to manage the audience backlash they were receiving from some audience members over comments made by pianist Jayson Gillham during his MSO piano recital. But Galaise was unable to make contact with either of these Board members in time to alert them to the unfolding events.
Read: Cultural leadership in crisis: the Melbourne Symphony Orchestra debacle
That missed opportunity had serious consequences for the company, because by the time the MSO Board met to establish their consensus views on how to handle the crisis, its executive team had already taken some action and reputational damage was already being inflicted.
Then, by the time the Board decided how to manage what was by then an escalated crisis situation, the decision to overrule MSO management’s actions only added to the public’s confusion and disquiet about what was happening.
Aside from being a headline-grabbing saga, the management-Board relationship part of the MSO story sheds light on similar (though far less sensational) dynamics at play for other arts organisations that operate under similar governance structures.
While each not-for-profit arts company has its own bespoke experiences with its board, in the wake of the MSO crisis, many in the sector have found themselves thinking aloud about these long-standing arts sector governance issues.
As part of these ongoing discussions, ArtsHub has collated some of their most urgent concerns.
Are there dangers inherent in volunteer boards?
Many (but not all) of the arts managers ArtsHub spoke to for this story expressed worries that Australian arts boards are not functioning as they should be because their board members are providing their services as volunteers.
As one sector professional put it, ‘It’s a tricky situation, because with most arts boards you essentially have a group of volunteers who are meeting every month, or two months for just a few hours… And then you have the employees of the organisation, who are actually there five days a week and are paid to be there.
‘When you think about it, it seems like a flawed system because you have people overseeing the organisation who cannot possibly understand as much about it as the paid employees who are actually doing the day-to-day work.’
They continue, ‘Having board members who are also employees can help with this, but there is no getting around this [volunteer-driven] design flaw, which I think is based partly on an idea inherent in the arts that it’s normal to rely on volunteer labour.
‘Maybe that volunteer idea is OK for lower level arts jobs… but is this really the system we want for our governance?’
How well do corporate board members understand the arts?
Another consensus concern for many in the sector is a perceived lack of sector knowledge on the part of key arts board members, which can lead to communication breakdowns and ill-informed strategic outcomes.
This is especially true for arts organisations with boards that feature highly-skilled corporate leaders who may have achieved outstanding success in their respective fields, but do not understand the complex business dynamics surrounding many arts companies, because they have never actually worked in the arts.
As one arts CEO told ArtsHub, ‘Boards can be out of touch with the day-to-day operations and the mood of the team, as well as arts sector intricacies.
‘It also doesn’t help that the burden on boards is growing with increasing business and HR complexities, as well as scarce funding and an under-capacity, exhausted paid arts workforce who are looking for support.’
Read: Bad news boards
Another arts leader said ‘Major arts boards need a range of skills; however, one essential skill is sector experience and practice.’
They continue, ‘Running major companies is complex and, for some board members, who have very little sector experience, it takes time to understand the business, artistic needs, risk appetite and how their specific needs can add value. The mistake some board members make is the perception the companies need fixing by imposing corporate business practices, instead of learning and understanding what the company requires first and modifying best practice to suit the need.’
What do great arts boards look like?
So, that’s the bad news… But have we got any solutions?
Several arts managers ArtsHub spoke to for this story suggested that having standardised payments for arts board members – as is currently the case for government arts boards and boards of statutory organisations – would go a long way to ameliorate current issues.
If governments and statutory organisations can find the money to pay their board members, why can’t others? (The answer, of course, is that many arts companies operate on a mere fraction of the budgets of these government entities, so finding the money in their existing – in some cases shrinking! – budgets to pay board members is out of the question.)
But as cultural consultant and writer Kate Larsen has pointed out in her extensive work in this area, high-functioning arts boards are possible, but are not necessarily easy to achieve.
As Larsen wrote in an earlier ArtsHub article, an essential ingredient in an arts board is for board members to know exactly what their organisations expect of them in their roles from the start of their tenures. Unfortunately, Larsen’s latest sector survey reveals that 58% of arts board members surveyed do not understand what their organisations need from them (a worrying sign, indeed).
The other main feature Larsen attributes to effective boards is that CEOs and board members have trusting relationships to ensure appropriate levels of information exchange, especially on important organisational developments.
Read: 7 steps to building the perfect arts board
That said, Larsen cautions against board members overstepping the mark and interfering too much in an arts organisation’s daily affairs. As she notes, boards should ‘know where their responsibilities lie and where they don’t’ – including knowing how to establish clear lines around board roles from the beginning to avoid confusions or, at worst, complete organisational breakdowns.
So, unfortunately, at this point, there are no ready answers to the arts sector’s long-standing governance challenges. But the current issues have some calling for a shift to help their organisations survive during what at least one arts leader described to ArtsHub as the most challenging sector conditions they have seen in their 30-plus year arts career.
