There is always room to improve how theatre boards run, but being on one has never been more onerous. Sean Egan warns that as more is expected and less assistance offered we risk alienating young and diverse candidates
Theatre boards have been in the spotlight in recent weeks, in these pages and beyond. We all want arts boards to work well and there is always room for improvement. But one thing is clear: being a trustee has never been more onerous. The media is quick to bring attention to shortcomings in organisations, which is absolutely right if trustees have failed in their duties. But how often is the positive work by boards highlighted?
Social media has added an extra vulnerability to organisations; when an issue arises there is an expectation of immediate action rather than allowing trustees to decide after carrying out a full investigation. Safeguarding is very important and from a legal point of view trustees are personally responsible for any shortcomings – when issues arise they are time-consuming to deal with and are always urgent.
Trustees have important duties as regards maintaining the solvency of organisations. Many organisations are struggling with the funding cuts of recent years and need to find different ways of securing funding to maintain their activity – this has a knock-on effect on trustees.
These points are fairly apparent as a reason why broadening or even maintaining the trustee pool may be difficult. There is a deeper issue that needs unearthing and that affects the Third Sector as a whole. I am a practitioner who advises arts charities on legal issues including governance and deal with the Charity Commission all the time. The Charity Commission is wholly funded by government. After the financial crash in 2008, its funding was immediately cut by 27%. Though the government announced additional ‘interim’ funding this year it has been unclear how long this funding might last. The reality is that, regardless of this emergency measure, its real terms funding is still hugely down from levels of eight years ago.
In practice this means that the Charity Commission is a very different organisation to deal with. It also has extensive statutory duties, including maintaining the register of charities, dealing with new applications and intervening when things go wrong – going wrong can take the form of statutory enquiries or appointing managers over failing charities. These obligations take up considerable resources and mean that what remains is spread thinner. There are two particular ways in which this change in approach is apparent.
Charity law is complicated and technical. There is a huge amount of material on the Charity Commission website and a continuous flow of new information. Last month it issued 20 new documents, some including significant new advice for trustees. The Charity Commission’s approach is that all trustees need to comply with all the guidance it issues but in practical terms this is completely unrealistic. The commission used to provide advice and assistance to trustees, but this is no longer the case. In my experience if charities ask for assistance the likely response is that they will be told that trustees must decide for themselves and, if necessary, seek legal advice.
The charity registration process has become much more difficult in the last two years and seems designed so that more applications will be rejected. The commission used to be prepared to engage with applicants to understand how the organisation intended to work; now there are more flat rejections, as often as not, on questionable grounds. Even with a fairly standard arts charity there will be numerous additional documents to submit – such as business plans, extracts from board minutes, statements of trustee decision-making frameworks and you may also need to provide evidence of the artistic merit of work.
Good organisations will fail because they cannot negotiate the application minefield rather than because they are ineligible to be a registered charity. Though there is scope to appeal decisions, the process is designed to ensure that most of appeals are unsuccessful. In my own experience, one organisation’s charity objects were rejected (incorrectly) as not being charitable even though they were identical to an existing registered charity – go figure.
The guidance for trustees issued by the Charity Commission is extensive and complicated; with each iteration more is expected of trustees and less assistance is offered. One unintended consequence of this approach is that the role of trustee is less appealing, which can only discourage people who are interested in taking on such a role, particularly those who are younger and from different backgrounds. The Charity Commission needs to reconsider its approach and the resulting impacts.
The idea that arts trustees might be paid is a non-starter. There is a general principle in charity law that trustees cannot profit from their role. In practice this means that trustees are almost always unpaid. It is theoretically possible to pay a trustee but this needs to be sanctioned by the Charity Commission and is only granted in extreme circumstances. In any case, given the need for most arts charities to fundraise I can’t imagine that potential funders look kindly on applications from organisations who pay its trustees.
It is good to hear of Arts Council England’s plans to promote training on governance issues. The issue of training itself needs some consideration. As trustees are volunteers, expectations of additional training means more unpaid time devoted to the organisation – this may be fine for trustees who are late on in their careers but for those at an earlier stage this could serve as an additional disincentive. My concern is that though the intentions are undeniably sincere the effect of bearing down on arts board governance and stepping up the rhetoric may have the effect of further discouraging new entrants.
Being on a board is a pleasure and a privilege. We need to make it a good experience for trustees as well as ensuring trustees do what they need to do. But the role is also increasingly fraught with concerns and under the spotlight. So many trustees currently provide support and expertise above and beyond what can reasonably be expected of volunteers. Let’s not put off the next generation.