A Revolution in Governance
A remarkable revolution is taking place in the American theatre today. Led by the pandemic and long-pent-up demands for racial and social justice, this revolution is challenging the basic assumptions, structures, and values that have dominated the field for decades. Although we are familiar with how these powerful forces are affecting our theatres, we are less familiar with how they are affecting our boards. But our boards are also undergoing a revolution, a revolution in their membership, in how they structure and use power, and in the foundational values of their work. I want to explore this revolution by looking first at our historic model of governing, then at the challenges to that model, and, finally, at some of the exciting early responses to those challenges.
The Historic Model
More than any time I can remember, I believe that, in order to understand where boards are today, we need to understand their past, their origins, their purpose, and how they have developed over time. Since most of our current problems come out of this past, the more clearly we see it, the more creatively we can move forward.
Seventy years ago, when our founders were creating the regional theatre movement, their goal was to create great theatre at accessible prices for audiences across the country. To do this, they realized they would need sources of funds beyond ticket sales, as the cost of producing theatre was more than most people could afford. To raise more funds, they made the decision to adopt the legal, nonprofit model already being used by universities and social-service organizations to support themselves. Legal, nonprofit status is part of the United States tax code that provides two tax benefits to organizations that contribute to the public good. One is that these organizations are exempt from paying taxes themselves, and the other is that charitable donations made to them are tax deductible for donors.
In exchange for this charitable support, organizations agreed to accept oversight of their activities by creating boards of trustees that held them in trust for their communities and ensured they actually provided the public goods defined in their missions, maintained financial integrity, and obeyed national, state, and local laws. Although this exchange looks straightforward, it actually has had complex implications for how theatre boards developed.
With the nonprofit model, theatre boards are responsible for maintaining three relationships: their relationship with the community they represent, their relationship with the organization they govern, and their relationship with the public good they are protecting and championing, in our case the artists and their art. What I believe happened is that, over time and under constant financial pressure, the values and priorities of theatres developed in ways that strongly supported the relationship between the board and its theatre institution but undermined the potential relationship between the board and its community on one side and the board and its artists on the other.
First, as theatres grew, the need for fundraising, marketing, and planning developed into a complex institutional structure that needed to be supported with staff and funding. These institutional needs became the fixed costs of the theatre, which were difficult to change, while the art and artists became the variable costs, able to be changed from show to show. Always operating in an environment of scarcity, too often the art and artists were cut to maintain the institution. As a result, over time, theatres inadvertently began to prioritize the institution over the art, and most artists became itinerant workers, hired for individual shows. Because of this, board members rarely encountered artists, so they knew little about their lives or their work, and, since few fellow board members were artists, there was little artistic presence around the board table. Often artists were brought to board meetings for what were “show and tell” performances to educate board members about the art, but, mainly, the board’s relationship with artists became mediated by the institution.
The board members who are directly involved in setting the agenda and passing the budget hold much of the power of the board. Underneath most of the challenges facing boards today is the issue of who holds these positions of power.
The second thing that happened was that, again over time and under financial pressure, boards’ relationships with their communities changed. Rather than being the community’s main representative in the oversight and operation of the theatre, boards started to see communities as a prime source of donations, and fundraising became a dominant function of boards. At the same time, communities were increasingly looked at as sources of audiences and became the targets of growing marketing campaigns. Since board members are generally chosen for their abilities to help with the work of the board, wealthy or connected board members with fundraising and marketing experience became particularly desirable, and the broad-based connections between the board and the community were eroded. Membership on boards became increasingly narrow, representing only a small part of the community. Boards began to no longer serve the communities they were supposed to represent or the art they were supposed to champion.
In contrast to these two relationships, theatre boards did develop strong relationships with the institutions they were charged with governing, which created the model of governance we are so familiar with today. I think the most striking characteristics of this model are that it is hierarchical in form, that its membership is determined by the needs of the theatre rather than the needs of the community or the artists, and that board power is concentrated in a few vital functions.
We inherited our hierarchical form of governance from the corporate world where power is concentrated at the top and flows down through a pyramid structure from presidents to vice-presidents to department heads to general staff. Within this structure, decision-making is goal oriented and tends toward linear thinking, which means that most of the decision-making power is held by a small group of people with similar mindsets. Theatres and theatre boards are patterned after this model. For theatre boards, power flows from a chair to a vice-chair, an executive committee, other committees and subcommittees, and then the general membership of the board. Within this structure, board thinking also tends to be goal oriented and linear.
In addition to mirroring their theatre’s hierarchical structure, boards mirror its administrative structure. Theatre staff are organized around administrative functions, such as finance, marketing, fundraising, and education, and boards organize their committee structure the same way. Most board members are elected for their expertise in these areas, so membership of the board is, in large part, determined by these administrative functions. Additionally, many of the qualities looked for in board members—professional expertise, personal talents, financial resources, previous board experience—are qualities that serve these functions well. Although most theatres also have artistic and production departments, these departments are not represented on the board except by the artistic director.
Finally, one of the most elusive—and difficult—aspects of governing is how power is structured on a board and how it is used. The two most powerful roles on a board are setting the agenda and passing the budget. A board’s agenda determines which issues are considered to be important and which will be discussed and addressed. A theatre’s budget is a blueprint of the theatre’s values; it tells the story of what the theatre is choosing to do and how it plans to do it. The board members who are directly involved in setting the agenda and passing the budget hold much of the power of the board. Underneath most of the challenges facing boards today is the issue of who holds these positions of power.
Challenges to the Model
Today, theatre boards are being challenged to change both their narrow membership and their hierarchical structures of power.
The challenges to their membership are obvious and reflect the historic failure of theatre boards to develop strong relationships with the communities they represent and the artists they champion. Because boards represent only a small slice of their community and have little knowledge of the lives and needs of artists, they are now being asked to fundamentally change this by creating new relationships with both their communities and their artists.
Overshadowing these challenges, however, is the deeper challenge for boards to understand, respond to, and embrace the demands for racial and social justice that are transforming our culture and our communities. Not only do boards not represent the rich diversity of backgrounds, values, and needs of their communities, they have continued to favor the predominately white, well-off, and older members of their communities, perpetuating the inbred racism and other discriminatory practices of the larger society. Boards need to not only diversify their membership, but to become leaders of these seismic changes.
The second big challenge facing boards today is to change the hierarchical structures of decision-making and power that have evolved in our governing model. The hope is that we can transform these governing structures into shared systems of power by decentralizing and democratizing the decision-making process.
The best thing boards can do is create stronger support systems for new artist and community board members.
Toward a More Collaborative Approach to Governance
The early responses to these challenges are exciting and focus on changing the membership, the structure, and the values of governing.
Transforming the membership of our boards has a two-fold response. The first is to change who sits at the board table by bringing artists and community members directly onto our boards, making them full partners in governing and giving their concerns a place on our agendas and status in our budgets. The second is to change the sensibilities and values of board members so that they both understand and commit to practicing racial and social justice. Many theatre boards are already undertaking diversity, equity, and inclusion training and making genuine attempts to follow these practices.
Unfortunately, making these changes in the membership of our boards is proving more difficult than expected. Many boards have ingrown cultures and ways of working that are hard for new members with different backgrounds and experiences to penetrate. Often, there is an entrenched group of board members who dominate leadership positions and perpetuate traditional thinking. New board members tend to be recruited from friends of existing board members, so boards keep replicating their membership. And it is difficult to wean boards from their focus on major donors and fundraising.
In addition, the learning curve for responding to the demands for racial and social justice have been steeper than expected. It is one thing to add new, diverse members to boards, but quite another to understand the compelling history that demands this diversity and be transformed by this understanding. Without this deeper transformation, the tendency is to socialize new members into the old ways of governing rather than creating new ways. Boards, themselves, have to change if we want new members to have stature and be effective in governing.
There is also a steep learning curve for including more artists on our boards. There are so many stories of how surprised board members are when they learn how low most artists’ income is or what it is like to live on the road, going into a strange city at night and trying to find where to stay and how to get food supplies. Or how many simple artistic needs within a theatre are often not being met, such as better tools for the scene shop or better ventilation for the props shop. The needs of the artists don’t get on the agenda and are not represented at the budget table. Becoming artistically literate is a more complex challenge for boards than expected.
To address these problems, I think the best thing boards can do is create stronger support systems for new artist and community board members. There are many ways to do this. One is to create a new buddy system like the ones theatres have used in the past where new board members are paired with existing board members who help them learn about the theatre—its history, goals, and values—as well as the organization and operations of the board. But now it could be a two-way buddy system, where new members also help older members understand the different backgrounds, values, and ways of thinking the new members are bringing to the board. This is an easy way to support new board members.
Boards can also be sensitive to how committee assignments are made, so that these new board members are placed in positions where they can genuinely contribute to governing. For example, serving on the important finance or board development committees immediately places a new board member in the center of board activity. Or, more significantly, boards could establish committees for community and for artistic development. New board members would serve on these committees where they would be in a position to help define what changes are needed and to lead these changes, immediately involving them in important work while giving them status on the board.
Even more broadly, boards could establish outside community and artistic advisory boards that would augment the influence of new artist or community board members. These advisory groups could help educate boards on community and artistic issues. They could provide support for new members while becoming a prime source of recruitment. And they could extend a board’s reach deeper into these communities. Rather than just a few artists or community members being part of the board, there would be a network of people to advise and collaborate with the board.
These are just a few ideas of how we can better support new board members. But if we really want to change our boards, we have to also change the environment in which this happens.
The response to the first challenge is to change the membership of our boards; to change who sits at the board table. The response to the second challenge is to decentralize and democratize decision-making and power structures. Many theatres, such as City Theatre Company in Pittsburgh and Steppenwolf in Chicago, have started to decentralize power by creating shared leadership roles for artistic directors. Boards can follow this example, creating not only shared leadership for board chairs and committee chairs but requiring that these leadership roles rotate among traditional, community, and artist members. This starts to erode entrenched power and expand the creativity of the board. Collaboration starts to replace hierarchy.
A more radical approach is to restructure the board so it looks like a daisy with an executive center surrounded by separate advisory boards. This would be an extension of the idea of creating community and artistic advisory boards but placed in a larger, formalized framework. In addition to the community and artists advisory boards, each of the major functions of governing, such as fundraising, marketing, education, and finance, could have their own advisory board, which would explore needs, set goals, and recommend ways for moving forward. Their advice would then be evaluated by the central executive board, which would have the power to make decisions and take action. The head or co-heads of the advisory boards would be voting members of the central executive board, ensuring clear lines of communication among the various parts of the governing system.
Decentralizing the structure of the board this way would place much of the agenda setting and discussion in the hands of the advisory boards, bringing a wide range of ideas and values into the decision-making process. Power would be diffused and collaboration increased. And other issues of power could be addressed. For example, one of the advisory boards could be a prestigious patron board of donors and fundraisers who often don’t want to take on the full time-consuming needs of governing. This would create a prominent home for these important people while reducing their influence on the governing process. Theatre Communications Group, the national service organization for nonprofit theatre, has created an inspiring approach to decentralizing governing that is similar to this but more sharply focused.
If boards take decentralizing power and moving toward a more democratic form of governance as their goals, I believe they will find many creative ways to restructure themselves so that they can move from hierarchical to shared systems of power.
Finally, I think many people in the theatre world are looking for more than changes in the structure and composition of their boards. I think they are looking for changes in how we value and work with each other, in the environment in which we govern. I believe there is a deep desire to move toward a more collaborative form of governance, one that is based on shared values, such as respect, trust, and equity, and one that creates a culture that is democratic and respectful of all people and all talents. With such a collaborative form of governance, we would be both flattening hierarchy and diffusing power, and if the values inherent in collaboration became the values of our boards, many of our problems, such as discrimination and abuses of power, would start to atrophy on their own.
The early response to the challenges facing our boards is to move away from the old, traditional forms of governance by changing who sits at the board table, changing how decision-making and power are shared, and changing the environment in which we govern. Reimagining our boards this way does not change the power delegated to them in our nonprofit agreement, but it does allow us to democratize that power by building a more inclusive, humanistic, and collaborative way of governing.
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Laurie, thanks for your comments. You are right, of course, that ensemble companies differ from the classic model in that they all have artists on their boards and ensembles based in communities like Bloomsburg also have community members on their boards. A very different approach to governance. Hope all is well with you. Jaan
Aaahhh, the ongoing, ever-present, perhaps-evolving relationship(s) of board and artists and economics and mission and power and community. I offer Bloomsburg Theatre Ensemble (from which I retired as a founding member three years ago) as a model-- an artist-run company thoroughly committed to its community, with an ongoing, ever-present, perhaps-evolving, often-rocky, often-mutually-nourishing relationship with its board. BTE is currently celebrating its 45th season. Yay.
Roche, thank you for your thoughtful response to the essay. I completely agree with you that trustees need to understand the basic economics of not for profit heater, the inherent structural imbalance that Bowen and Baumol set out for us those many years ago and which your recent presentations have made accessible to so many people in the field. I wish that all trustees, particularly new trustees, were required to read a summary of your work. I also wish that, if TCG ever resumes publishing trustee material, either online or in book form, it would form one of the first chapters. This was a subject that was missing from The Art of Governance. Best, Jaan
Jaan Whitehead has always provided thoughtful comments regarding our industry. This article is no exception. At the same time, I believe there is another aspect to the governance crisis/evolution: the lack of understanding by boards (and theater practitioners) about the basic economics of our industry. Over the last seven years I have presented WHY NOT FOR PROFIT THEATER, an illustration of the economics of our industry at conferences and theaters around the country. I have been amazed that trustees don't understand why ticket price increases have occurred to fill the gap between annual contributions and expenses. Price increases obviously lead to programming changes and mission erosion. Furthermore, trustees are not really aware of how the commercial and not for profit business models differ. At the same time, in meeting trustee leaders around the country, I have been impressed by their commitment to their theater's mission and their frustration with the financial challenges they face. It is important to remember that the Ford Foundation had an overwhelming financial impact in the first decade of the not for profit theater movement. When their involvement ended, the pressure on boards to raise funds increased significantly and has continued to this day. In short, board governance issues are intrinsically linked with an understanding of the economics of the theater field. Without fully understanding the current business models, we cannot hope to change them. Roche Schulfer, Goodman Theatre