Effective Governance

All nonprofit arts organisations have either a Board or Committee of Management responsible for effective governance.

Governance presides at the top of an integrated information system, yet effective governance is enhanced or hindered by the flow of information. Everytime a piece of information passes through another level, a filter is applied. This can result in the board getting only part of the information.

Stephen Feber, a museum manager and consultant in the UK talks about an information hierarchy that he refers to W.K.I.D. This denotes a triangle with Wisdom at top, cascading down to Knowledge, then Information and at the bottom of the triangle is Data.

Arts organisations gather a lot of data. This could be in the form of audience feedback, financial or social impact, amongst others. This data then needs to be translated into information which is utilised by management to make operational decisions that are in line with the strategic direction. This builds the knowledge base within the organisation which is then fed up through the CEO to the Board. The Board is then able to identify from the information that the organisation is achieving the strategic goals. The Board, in turn uses the information provided to oversee financial and risk management, before sending messages back to the organisation through the CEO.

This information cycle works very well when all is well within an organisation. The flow breaks down when there is trouble at the ranch. The problem for board members is that unless they are aware of internal issues, they likely will not be aware of any disruption in the flow of information. This, in turn impacts upon the ability of the board to make good decisions.

How can you, a board member, minimise this risk? The answer lies partly in how you align your radar? What are you seeing and what are you hearing? As a board member you should not interfere in the daily operations of the organisation. You can however nurture your networks.

The other responsibility you have, as a board member is to ask questions and challenge all assumptions. Never accept something at face value. Never assume all is well within the organisation and never assume the CEO has been given all the information. Read your board briefing papers and identify the questions you need answer too. The more you enquire, the more you learn and the more you contribute to that collective wisdom.

Effective governance is an important activity with The Cycle organisational framework. Long term planning of strategic outcomes and artistic program enables board members to contribute to building a growing family of supporters.

John Coxon is founder of art4u.australia, a consulting agency helping arts organisations to remain viable and sustainable through application of The Cycle organisational framework. Reach out to John for advice and guidance on governance issues.

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