Business in the Arts:North West is working alongside the Sponsors Club in Newcastle on a Grants for the Arts funded programme to deliver a series of governance initiatives for the arts across the North of England over the next 12 months.

The programme began in Autumn 2013 with a survey to establish some current benchmarks around governance standards and to try to establish information about the quality, effectiveness and diversity of governance in the arts. This information was used to inform the design of the other services.

Executive summary

There were some encouraging results in the survey, but also a number of areas requiring focus.

Perhaps the most surprising result of the survey was the very small number of disabled people on boards, only 44 out of 837 board members. Whilst not a surprise, the number of board members under 30 years was also disappointing – just 22. This is perhaps inevitable given the reliance on using personal contacts to identify new board members; it is generally accepted that this method of recruitment does little to increase diversity on boards.

It has been observed that the size of boards has reduced over the last 15 or 20 years, but perhaps too far, almost a third of those surveyed encountered quoracy problems. This could also reflect the increasing pressure on board members who also work full time.

Whilst the number of organisations that provide job descriptions / role specifications for their board members has probably increased in recent years, almost 40% still do not have any such document and 42% do not have a job description for their chair. Given that clarity around the board role helps to support board performance, this is an area for improvement.

Comments reveal that there is a difference in the expectations of CEOs and board members themselves about the nature of fundraising support that would be most valued.

Other concerns are the relatively low number of organisations with written remits for their committees; the number without a disaster plan and the number without a process for appraising their CEO. There is also work to do around areas such as delegation by the board and policy review.

Finally, arts organisations are not meeting the training needs of their board members, and probably linked to this, there is little use of rigorous methods of board review.

SUMMARY RESULTS

Responses - 110 organisations responded in the form of 105 CEOs and 79 board members of whom 45 were chairs. Most responses were received from the North West, similar numbers of surveys were completed in the North East and Yorkshire.

The organisations – 86% of the organisations had existed for 6 years or more. There was a good spread in terms of turnover with 26 organisations having turnovers below £150,000 and 20 with turnovers above £1 million. Numbers of staff ranged from 180 FT staff down to zero.

Board composition - The average board size was 8 people and 47% were female.

Of 827 board members, 79 were Black, Asian or Minority Ethnic; an average of 0.76 people per board and 62 organisations reported their boards had no BAME members. There are regional variations reflecting the demographic differences between regions.

The number of board members considering themselves to be disabled was 44, an average of 0.46 per board, with 70 organisations reporting they had no disabled board members.

Age – 47% of board members were between 46 and 60 and only 2.8% (22 individuals) were under 30 years.

88% of organisations checked the eligibility of board candidates; 78% had an induction process for new members and 92% gave them a copy of the governing document.

Length of service – 46% had retirement by rotation for members, the rest had terms of office ranging from over 8 years to less than 4 years.

Board recruitment – all reported recruitment on the basis of skills; 71% also considered diversity and 70% networks. Personal contacts were by far the most popular method of identifying candidates, followed by the use of board matching services and use of e-networks.

Job descriptions – 58% had job descriptions for the chair and 62% had a job description for board members.

Meetings – 47% met 5 or 6 times p.a. and 35% met between 2 and 4 times. Most (55%) were attended by 75% or more of members. But 29% encountered problems with quoracy.

Committees – Just over half had standing committees and the majority of these dealt with finance with the second most popular area being HR, but only 48% had written remits.

Board training – only three organisations reported that they identified and fully met board members' training needs, though 65% said that they did this to some extent.

Legal responsibilities - 82% of board members felt the majority of their board was clear about their legal responsibilities.

Board delegation - both CEOs and board members were asked about the clarity of delegation by the Board. The answers were similar, but over a third of both CEOs and board members felt that there was a lack of clarity.

Fundraising – this is another area where both parties were asked questions. 81% of board members said that they helped with fundraising, but this often included discussing strategies rather than doing anything tangible outside meetings. 84% of CEOs said that some of their board members were helpful; 11% said none of their board members were helpful.

Strategy and planning – 97% of board members felt they made a contribution to this area and a number mentioned the use of away days. Just over 90% of boards assessed risk annually.

Budgets – 5 boards did not approve an annual budget and 3 did not monitor budgets regularly.
70% received a cash flow forecast at every meeting.

Policy – all board members said they approved some (21%) or all (79%) of organisational policies, but only 45% reviewed all these regularly; 47% reviewed some.

Disaster plan – 63% of board members said there was no disaster plan for their organisation.
CEO appraisal – Only 58% have an appraisal process for the CEO and of these 68% carried this out annually.

Board review – 55% of boards do not carry out a regular review of their own effectiveness and of those that do, there is reliance on a discussion of whole board performance and little review of individual performance. This is despite the fact that many comments highlight that some board members perform well, whilst others do not.

Board effectiveness – Both CEOs and board members were asked to rate the effectiveness of their board. Board members rate the performance of the board higher than CEOs though there is not much in it. The average score given by CEOs is 7.18 and that given by board members is 7.51, both out of a possible 10.