27 October 2016

Aside: This light is your light...

In his post-Emma Rice response, David Jubb suggested "we also need to ask ourselves whether we are descending in to a world that looks more like the Premier league? In which lofty Boards hire and fire team managers with impunity."

This is surprising to read because... well... surely that's exactly where we are?

A Premier League board is beholden to shareholders. Shareholders elect the board to run the club, vote at the AGM and ultimately have final say in the running of the organisation. This works in theory but falls down in practice because there is normally a single majority shareholder. Consequently an AGM vote consists of  the majority shareholder saying "I am voting for this, I control x%, this is happening." Hence the appearance of hiring & firing with impunity.

However, the board of a charitable company (limited by guarantee) can effectively hire and fire with impunity (lovely and supportive though they may be).

The main reason for this is because charitable companies (limited by guarantee) do not have wider members. They have trustees (who act as directors in a legal sense) who are normally recruited by the trustees themselves. This board of trustees may establish an executive board, who are also recruited by the trustees and maybe by other members of the executive board. Then they will have some committees, who will be set up by the board and will report to the board. In The Globe's case they also have a 'Shakespeare Council' (former trustees and board members) who preserve the ethos of The Globe (which is brilliant, even if you dislike the ethos they are preserving). The board will then recruit a CEO/AD/ED or whatever positions they deem suitable and those appointments will take care of running the organisation. It's very insular and (funding bodies aside) there's nobody holding the trustees to account.

This is all best demonstrated by the example of firing a popular Artistic Director. In an organisation with shareholders, if the shareholders dislike the board's action they can vote to remove a board member (or even the whole board). However, in the typical charity structure there is no recourse. At best, a board member could propose a motion to remove another board member but there is no wider body than the trustees with the power to influence the organisation.

There is a charity structure that allows for members to vote on important decisions: the Charitable Incorporated Organisation (CIO). Not widely used by established charities because it was only available from 2013 and is expensive and complicated to convert to, the CIO is not technically a company (no registration with Companies House required) but offers legal entity for the organisation and limited liability for trustees. It also allows for wider members to influence issues such as where money is spent, how the organisation is run and how trustees are appointed. The charity must not exist purely for the benefit of members (so needs to welcome anyone to join) or membership must be linked to charitable purpose (for example, an amateur sports team requiring membership to participate).

For the purposes of this blog at least, Emma Rice stepping down reveals an ethos/structure problem with arts organisations: audiences are increasingly encouraged (rightly) to feel a sense of ownership over organisations (particularly those in receipt of public funds) but ultimately have no influence in how the organisation is run.

Perhaps the question we should ask is 'when will an abundance of audience owned spaces oust 'our' lofty boards'?

* Without wishing to sound like another theatre blog, things are better in Germany: football clubs must be at least 51% fan owned to compete at the top level.