Why Boards Go Bad

Last month I wrote about risk management in the performing arts sector, and how various smart people are trying to prod it towards better practices. I’m not totally in agreement with the approach, given the ephemeral nature of creativity and art-making. What seems most apparent(to me) is the need to work on the composition, qualifications and engagement of volunteer leadership on boards.

Nonprofit arts boards are a great challenge these days. They require a huge amount of time and effort to build and sustain. They are not easily managed. And they can go wrong in so many different ways.

Let’s start with the basics. I’ve always subscribed to Tom Wolf’s description of what a board is supposed to do, found in his book Managing a Nonprofit Organization:

1. Determine the organization’s mission and set policies for its operation;
2. Agree on the program from year to year and engage in long-range planning;
3. Establish fiscal policy and boundaries with budgets and financial controls;
4. Provide resources for the organization through direct financial contributions and support of fundraising efforts;
5. Select, evaluate and, if required, terminate the chief executive;
6. Develop and maintain a communications link with the community.

And here are the things that Wolf suggests that boards not do:

1. Engage in the day-to-day operation of the organization;
2. Hire staff other than the chief executive;
3. Make detailed programmatic decisions.

It all sounds so straightforward — what could go wrong? Here are some ways it can go very wrong:

Eyes Off the Ball:
Too often, arts boards stop doing what they’re supposed to do. Trustees enjoy the social functions and have a high level of confidence in management. Or they see that the longer-serving board members seem to be in control of things and are unwilling to rock the boat. Or they just want to get though the meeting agenda so they can be home in time for dinner. I think of the recently deceased Gotham Chamber Opera group, whose demise was assured when the audit committee failed to push hard enough soon enough to know just how bad the financial position was. Ninety days later, a new executive director revealed that the deficit was a half-million dollars worse than reported.

The board of friends and fans:

In many cases, boards of directors are assembled from friends, families and fans, a group that is generally unwilling to question or challenge the decisions of an artistic or executive director. I will admit that I was on one of these boards, though it was many years ago. I was the only person on the board who was not a friend or associate of the artistic director, and I was not particularly comfortable being the only one who tended to ask harder questions. So it really wasn’t much of a surprise when we discovered that the executive director was holed up in a midtown hotel with the corporate American Express card, using it to feed a nasty meth habit.

Funder-Led:
Then there are boards dominated by one or more individuals who represent the indispensable funding source for the organization. The power that comes with being the indispensable funding source is that it can often lead people to some pretty horrendous behavior, bending the organization and its mission to their will and leading the staff around by the nose to satisfy whatever strange desires they might have. And the attitude of the rest of the board and staff quickly deteriorates as they recognize the untenable and unsolvable position they’re in.

Micro-managing:
One particularly awful scenario is when a board attempts to influence programming. I remember the board meeting I was attending at an historic theater in rural Pennsylvania when a board member suggested that the artist she’d just seen on a cruise was simply wonderful and must be brought to the theater.

Factionalized:
Many arts boards become factionalized and conflict-ridden over the smallest of issues. It’s as if all of these grown people who have achieved great things in the wider world suddenly revert to being 12-year-olds when they walk into the boardroom, prone to inappropriate outbursts and Game of Thrones behavior (without the weapons). In my experience, bad behavior and conflict tends to arise from a feeling of frustration. People aren’t being listened to and they don’t get the respect they deserve. And it drives them crazy when their quick and decisive actions don’t solve the problems and challenges faced by arts organizations. You know you’re in trouble when a new board member suggests that “consensus-building is for sissies.”

The 80/20 rule:
Even the most effective boards can find that 20 percent of the trustees do 80 percent of the work. In some cases this happens because there are only a few people prepared to do all of the necessary work. But it can also happen when a small group effectively becomes “the kitchen cabinet,” shutting out the others and leading to the sorts of conflicts described above.

I’m sure there are other examples of how boards go bad. I’d love to hear from any of you loyal readers who have some stories and theories of your own that you’d like to share.

I’m also going to leave you hanging for just one more month — forin my next column, I’ll look at how we can fix these many problems and build boards that are cohesive, engaged and effective. Stay tuned!