Key Arts Organisation Funding Guidelines - part 9

Governance

artsACT considers strong governance of an organisation essential to the strategic leadership, sustainability and vibrancy of KAOs. KAOs are responsible for meeting national best practice standards for board governance and board-member conduct. This is particularly important in the context of five year public funding.

Strong governance is achieved by, amongst other features, board members having a clear understanding of their role and responsibilities, particularly their legal/fiduciary obligations to act in good faith and in the best interests of the organisation. The Australia Council for the Arts has published a useful information booklet on governance called On Board External Link  

Collectively, the board should have an appropriate mix of business/professional skills including financial, legal, strategic, governance and artistic expertise to achieve the objectives of the organisation. Ideally, boards should have six to nine members. artsACT strongly encourages KAOs to co-opt board members where there are any skill gaps, particularly for financial and legal skills. 

Boards should set the strategic direction of the organisation; have a leadership role in setting the culture, values and ethics for the organisation; monitor and review the organisation's financial and operational performance, including the performance of the board and CEO; identify, monitor, and mitigate potential risks; and ensure adequate internal controls to ensure the organisation's activities are compliant and in line with the expectations of the board.

In the context of public funding, artsACT requires board members to be independent of business, management, employment and/or artistic relationships with the organisation. 

While board members can be ordinary members of the organisation, they should not have a material or pecuniary relationship with the organisation that could interfere with the exercise of a board member's independent judgement.

This is to ensure that board members do not, and are not seen to, unfairly influence or benefit from opportunities that may arise through their participation in decision making for the organisation. It is also important when managing perceptions of conflict of interest in the broader community. To allow organisational members and the community to have direct input into board decisions, boards are encouraged to establish sub committees to provide advice and inform board discussions.

An important aspect of robust governance and management is succession planning for board and staff members, particularly senior management positions. Boards are strongly encouraged to carefully consider succession planning, including identifying key competencies and appropriate length of service, particularly in relation to the chair, deputy chair, artistic director and general manager, to ensure an appropriate turnover of suitably experienced members and staff in order to keep the organisation dynamic and relevant to contemporary practice.

Conflicts Of Interest

The ACT Government requires all KAOs to have in place formal conflict of interest management policies and procedures. The policy/procedures need to include that any board or staff conflicts are declared, discussed and a decision made on how the conflict will be managed at board meetings. Conflict of interest policies and procedures should be submitted as part of your organisational business plan and reported against in acquittals.

In general, KAOs should limit, to the maximum extent possible, actual or perceived conflicts of interests for board and staff members and their immediate family, particularly regarding any governance or programming conflicts. Sub-committees including external representatives can be used to assist with avoiding conflicts of interest. Artistic input can also be provided through an artistic sub-committee rather than through board members.

KAOs should carefully consider any board or staff member accessing the programs or services offered by the organisation. This is particularly relevant where any member receives, or is perceived to receive any preferential treatment or receives a benefit not available to the broader community.

Within this context, board members cannot also be employed by the organisation and this forms part of the conditions of funding in the Deed of Grant.