Friday, February 28, 2014

"Governance is Governance"

Around the time that I published my three-part series here on the Minnesota Orchestral Association governance last November, my friend Julie gave me a copy of an article by Ken Dayton entitled Governance is Governance.  Mr. Dayton, who died in 2003, had served as Chairman of the Board and CEO of the Dayton-Hudson Corporation, as well as a director on the boards of non-profit organizations all over the country.  Mr. Dayton also served on the MOA Board.  He had deep experience with non-profit governance as well as being a volunteer and philanthropist.  Needless to say, I was intensely curious what he had to say about non-profit governance and how it would apply to the MOA.

Kenneth Dayton (MPR file photo)
The article started life as a speech Mr. Dayton gave in 1986 to an Independent Sector Leadership/Management Forum.  He founded the Independent Sector, a nonprofit, nonpartisan coalition of over 700 national nonprofits, "to promote, strengthen, and advance the nonprofit and philanthropic community to foster private initiative for the public good."  The complete article can be found at the Independent Sector website and includes a follow-up interview with Mr. Dayton.  I urge anyone interested in nonprofit governance, and especially members of the MOA Board and musicians, to read this article.  My comments in this post are an overview of the article and my response to it.

Governance is NOT Management

Mr. Dayton makes this point on the first page: "...first of all that governance is not management, and second, that governance in the not-for-profit sector is absolutely identical to governance in the for-profit sector."  Managers manage, or CEO's in this case.  Boards of Directors or Trustees (Mr. Dayton uses "Directors" and "Trustees" interchangeably) govern.  There are two sides to being a trustee for a non-profit: governance and volunteering.  I love the way he deconstructs the role of trustee on the first page, and I really love the term "trustee" because it captures the stewardship responsibility of a board member much better than "director."  He provides job descriptions to define further the duties and responsibilities of CEO, Board Chair, and Board of Directors.

A serious problem arises when the volunteer Board Chair thinks he/she is the CEO. Mr. Dayton points out that when the Chair is also the CEO, a dictatorship is established.  The Chair needs to be hands off regarding management tasks and responsibilities and focus on the Chair's tasks and responsibilities.  Second, the CEO becomes only a functionary, and then it will be difficult for the board to attract or keep an "imaginative and creative innovator, leader and motivator."  In other words, when the Chair also manages the organization, it's not good for the organization.  A similar situation arises when the CEO is a weak manager and delegates management duties to the Chair in order to keep his job.

What is the Board of Trustees function?  According to Mr. Dayton's job description for a non-profit board: "As representatives of the public, be the primary force pressing the institution to the realization of its opportunities for service and the fulfillment of its obligations to all its constituencies."  The board member's first loyalty is to the organization.  Board members promote, strengthen, and advance their non-profit organization to achieve its mission and serve the public good.  Their responsibilities are not to manage the organization's operations.  That's the CEO's job.  The Board serves more as an oversight committee and guide.

The Board Chair and CEO must have a good working relationship in order for the organization to enjoy health and success.  An overbearing Board Chair paired with a weak CEO can destroy the separation of management and governance, and this combination means the organization is in trouble or heading for it.  I immediately thought of former MOA Board Chair Jon Campbell and his partner former Past Chair Richard Davis.  Both these men are strong corporate leaders in the banking industry and accustomed to taking charge.  Their CEO was, and still is, Michael Henson who has not demonstrated strong leadership, being able to motivate people in healthy and effective ways, or being an effective, honest spokesperson for the MOA.  He is by all accounts an excellent fundraiser, so I tend to think he's missed his calling in the CEO role.  He should perhaps be leading the Development Department and all fundraising campaigns. (Note: Mr. Campbell and Mr. Davis are no longer on the MOA Board.)

Michael Henson

For the MOA, an orchestral association, the leader charged with fulfilling the mission, an artistic mission, is the Music Director, not the CEO, and not the Board.  The CEO and the Board work in support of the mission and the Music Director.  Here's what Mr. Dayton says about that: "As a director of the Minnesota Orchestral Association, I came to the conclusion that the only role of a trustee of an orchestra is the care and feeding of the music director.  By that I mean everything the board does is done to enhance and support the vision and mission of the music director."  That statement made me gasp.  How has the MOA Board in the last six years worked to enhance and support the vision and mission of Osmo Vanska?  How could they and the CEO focus on the artistic needs when their attention had been pulled in the direction of renovating Orchestra Hall and fundraising?  How does the Orchestra Hall renovation help to fulfill the artistic mission of the MOA?  So the true leader of an arts organization is the artistic director, not the CEO and not the Board Chair.  They do need to be able to recognize and respect each other's role and work together.

Another passage also took away my breath: "...each board (for-profit or not-for-profit) must organize itself and conduct its affairs in such a way that it can attract, keep, motivate, evaluate, and reward -- and if necessary change -- a CEO who, with the chair's help and the board's support, will lead the institution to fulfillment of its mission and enable the board to fulfill all of its responsibilities."  It's important how the board of a non-profit conducts itself in service to the non-profit and its mission in order to attract the best people to work at the organization.  In the case of the MOA, that includes musicians for the orchestra.   Leadership is important.  The leadership's policies and expertise will reflect the health of the organization.  A leader who does not encourage open communication and consider opposing views, and creates an unfriendly or hostile work environment will reflect the organization's dysfunction.

So, I'm now wondering: why has Gordon Sprenger, the new MOA Board Chair, been doing all the public speaking on behalf of the MOA?  Where's Michael Henson?  Is the management and governance roles being blended again?  Has Mr. Henson delegated his responsibility as spokesperson for the MOA to Mr. Sprenger?  Or has Mr. Sprenger taken it upon himself to step into that role?  Neither is a positive sign. 

Gordon Sprenger (courtesy MOA)
Mr. Dayton believes strongly in defining roles, and to that end, he provides job descriptions for the CEO, the Board Chair, and the Board of Trustees for a non-profit organization.  He suggests that they be reviewed and updated annually.  They are the foundation on which the relationship between the Board and management can be established, clarified and optimized.  He urges every organization to clearly distinguish between governance and management if it wants them to work together well to achieve the organization's mission.

My concern as always is accountability.  A healthy Board working well with the CEO and the artistic leader will be in the background, advising, helping the CEO, and fundraising as needed.  We've just come through a damaging lockout conceived and executed by the Board and management of the MOA.  I fear that, as the Board exists today, the rebuilding work that needs to be done cannot be done.  Are their minds on classical music or money?  Are they blinded to their CEO's shortcomings?  Will they have the courage to take the steps necessary to put the MOA back on track to artistic excellence?  Will they now be open to listening to their constituents, i.e. the musicians and the community they serve? 


George (Jake) Jaquith said...

Thank you again for the analysis. The words of Mr. Dayton say it all, that the care and feeding of the artistic vision and mission of the music director is the proper role of the board. May all MOA members reflect on his comments and your conclusions. It becomes all the more clear that we need maestro Vanska, without Mr.Henson. Let us consider the will of the musicians who are the backbone of the operation. Remember their vote of no confidence and their devotion to OSMO.

George (Jake) Jaquith said...

Gina, What is the latest on OSMO and HENSON? Could you do a post on Rep. KAHN and her proposed bill to change the governance of the orch? The need seems greater than ever given the clandestine nature of the Board. Other orchestrs, such as the OREGON, have models that involve the community. Thanks for your excellent work.
george jaquith

Gina said...

Hi, George! Thanks for your comments. The latest about Osmo Vanska and Michael Henson is that the MOA Board met a week ago, apparently came to agreement about the Music Director position but made no public announcement regarding what that agreement/decision was, only that a great deal of work needs to be done before they make a public announcement. Regarding Rep. Kahn and governance, I plan to publish a post today (3/7) that deals with membership governance structure, and there'll be an article by me published at today about membership governance.

You can write your state rep. if you live in Minnesota, write Governor Dayton, or write MOA Chairman Gordon Sprenger with your concerns, thoughts and ideas. Their addresses are available online at the MN State Legislature website, the Governor's office website, and the MOA website.