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Arts and Culture Governance Report

Jan 24, 2020
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Overview

The Australia Council is pleased to partner with the Institute of Community Directors (ICDA) and Our Community to publish the Arts and Culture Governance Spotlight Report. The report highlights the unique nature of our sector but also provides an effective comparison and benchmark with other not-for-profit companies and organisations. The research validates our understanding of the current state of governance in the arts and highlights new insights about governance practices that we should respond to. The report reinforces that what we face in the arts is felt across the not-for-profit sector.

The Australia Council partnered with ICDA in 2017, delivering a tailor-made training and networking program to enhance arts governance in Australia. The program tackled some of the big questions of arts governance. The aim was to provide arts managers and directors with a better understanding of how boards can best serve, support and steward their organisation – enabling it to thrive. Over the past three years, we’ve held multiple workshops across the country, engaging with over 1100 people both in-person and online through our webinar series.

Ensuring the sustainability of arts organisations is vital to a creatively connected nation. Our cultural and creative sectors are facing significant forces of change and evolution. It is no longer possible to rely on traditional business models, modes of operation or engagement. To ensure the creative sector thrives in this evolving landscape, we are supporting the sector to continually adapt to industry change; to realise the potential of diversity; and to actively cultivate creativity and innovation.

Strong arts governance is critical to achieving this goal. Having robust organisations will ensure this sustainability.

We encourage arts organisations, boards, and arts managers to reflect on what the findings of this new research means to them. How could you use this report as a benchmark for your governance practices and where do you need to make enhancements?

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Key findings

  • Board diversity is a mixed bag: Arts Boards generally have a good gender balance, and are inclusive of older people, arts consumers and LGBTI people, but many lack representation by young people, people with disability, Aboriginal and Torres Strait Islander people, and people from culturally and linguistically diverse communities.
  • Limited introspection: Arts and culture organisations are less likely than others in the not-for-profit sector to have a formal review process in place (10% versus 30%), and 41% of senior leaders in the arts and cultural sector say their board does not review its own performance in any way.
  • Limited CEO oversight: Most boards in the arts and cultural sector (73%) have reviewed their CEO recently, but around 20% have never done so, a higher figure than in the general sample (16%).
  • Happy and productive: Most (94%) board members in the arts and cultural sector enjoy their role as a board member, and most (88%) say they clearly understand their board responsibilities.
  • Inductions underdone: Less than half of arts and culture board members say they received a good induction when they joined the board.
  • Fundraising and governance are top training needs: 66% of respondents say they would benefit from fundraising/grants training, while 40% say they would benefit from governance training (a third has never participated in this type of training). A total of 28% would like some impact evaluation and/or financial management training.
  • Lacking in tracking: 16% of respondents from arts and cultural organisations say their organisation does not measure success in any way, a figure that’s consistent with the sample as a whole.
  • Arts and culture organisations are doing it tougher than other sectors: Three quarters of not-for-profit arts and culture organisations are in a good financial place or are at least breaking even, though 24% say they are struggling financially. Arts and culture organisations are doing it tougher than others, recording the highest percentage of struggling organisations of any sector, and the lowest percentage of organisations saying they are in good financial health.
  • Limited financial literacy: 45% of arts organisation respondents say that just some, few or no one on the board has sufficient understanding of the organisation’s finances.
  • Key challenges: Funding, increased competition within the sector and a reduced interest in volunteering are the key challenges faced by arts and culture sector organisations, according to their leaders.

Comparisons to Australia Council Four Year Funded Organisations

Small to medium arts organisations that receive Australia Council Four Year Funding are required to report against Four Year Funded principles and Strategic Objectives. Qualitative analysis of reporting against the objective of Governance and Leadership, over both 2017 and 2018, reflect key points made in the ICDA survey.

  • Organisations reported on consistent performance review leading to greater transparency and accountability.
  • Good governance was reported as important to organisational performance in negotiating risk and building sustainability.
  • Reporting highlighted the importance of maintaining and building diverse representation at the board level.
  • Organisations reported on the ongoing challenge of funding.

Key themes

Leadership diversity
The benefits of leadership diversity are immense and widely distributed. Diversity is a leadership asset resulting in increased artistic vibrancy and innovation, among other benefits. It is essential that leadership is representative of the community it serves.

Board training needs
Respondents from arts and cultural organisations are more inclined than those from other sectors to believe they would benefit more from additional training – 65% for arts groups, compared with 52% for the sample as a whole.

Assessing board and CEO performance
We asked survey respondents to indicate which (if any) methods their board had used to review their own performance. In the arts and culture sector.

Impact and data
Most arts and cultural organisations are measuring success in one way or another, though it’s worth noting that 16% of respondents say their organisation does not measure success in any way, a figure that’s consistent with the sample as a whole.

A key element of tracking a path to success centres on data collection. Arts and culture organisations are collecting several different types of data, our survey found.

Challenges
Our survey unearthed a number of challenges to arts and culture organisations via a free-text field that asked respondents to identify up to five external forces or trends that were presenting as challenges to their organisation.

Measuring financial success
Unfortunately, arts and culture organisations are doing it tougher than others. Our survey revealed that this sector recorded the highest percentage of struggling organisations and the lowest percentage of organisations saying they were in good financial health.

Data collection in the arts and culture sector:

Top training needs for arts and culture boards: