Background Notes:Queen Victoria Museum & Art Gallery Governance

27/03/2011

NOTE: This paper is premised on the fundamental principle in corporate governance being that a governing body's primary role, indeed only role,  is to determine policy. As a consequence of this management's role is to carry out the conduct of the corporation's/institution's/organisation's operation in absolute accord with the governing body's policy determinations. 

 INTRODUCTION

In November 2010 Launceston City Council (LCC), in its role as the Queen Victoria Museum & Art Gallery’s (QVMAG) governing body, set up the QVMAG Governance Working Group to review the institution’s governance of QVMAG. The initiative to establish the Working Group was taken against the background of observations of weaknesses and failures in the institution’s governance and the impact this was having on the effective management of the institution – concerns such as an apparent lack of accountability, inadequate planning, staff disenchantment and management malfunctions were evident.

Towards this end, the Group held five meetings in 2010 & 2011 to:

• Assess the institution’s current governance arrangements;
• Review governance models in comparable institutions in Australia and overseas; and
• Provide LCC with advice on establishing a governance model relevant to 21st Century circumstances.

It was expected that the GWP would report to Council with its recommendations by 1 March 2011. The reporting date is currently under review.

BACKGROUND

The Launceston Mechanics’ Institute that was formed in Launceston in the 1840s provided the basis of the QVMAG’s collections. QVMAG has been operating as a Council operated museum since the 1890's and is now the largest regional museum in Australia. It not only provides a cultural centre for northern Tasmania, as a museum and art gallery, it has national significance and it has attracted national and international visitors. Furthermore, the institution has developed valuable networks relevant to its collections in the national and international arena. With the reopening of the Royal Park campus as the institution’s dedicated Art Gallery space mid 2011 public interest is expected to increase. In accord with this development the Inveresk campus will be undergoing further development in 2011/12.

Currently LCC, the QVMAG’s governing body has determined that the institution be managed as a part of the overall] management of Launceston City Council (LCC). Here the Council is divided into 5 Directorates that all report to the General Manager. The QVMAG is one of the 5 stand alone Directorates. The QVMAG Director is a member of LCC Executive Management Committee and participates in broader Council management issues. The Council’s management structure provides ancillary support to QVMAG through Directorate sections such as Human Resources, Finance and Parks.

In September 2009 a QVMAG Advisory Group was established to:

• Provide support and advice to the QVMAG Director on the management of the institution;
• Review reports from the QVMAG Director including but not limited to finance, operations and strategic development;
• Provide advice direct to Council, as and when requested.

Committee membership comprised two Alderman, LCC General Manager (or delegate), two general community members and a further two members representing Friends of QVMAG and QVMAG Foundation.

Importantly, this Committee has no delegated authority as thus it falls under the aegis of LCC’s management and operational structures. Furthermore, QVMAG management may establish other complementary advisory committees or reference groups as and when it sees fit.

QVMAG FUNDING

For the year ending 30 June 2010 the QVMAG’s operating budget was $4,937,436. Council is the major contributor to the institution’s recurrent operating expenses and for the financial year 2009/2010 this amounted to $3,603,960. Given that Launceston City Council has 29,500 rateable properties, the city’s ratepayers are contributing to the QVMAG at the level of approx $122 per property in the form of a subliminal levy within their rates. It is also noteworthy that ratepayers’ contributions to the QVMAG’s recurrent expenditure budget have increased by something in excess 350% since Y2000.

Importantly, LCC has received a commitment from the Tasmanian State Government towards the institution’s annual recurrent budget, which stood at $1,208,800 for the financial year 2009/20010. As a part of the Council’s agreement with the State Government the State Government’s contribution increases annually in line with the CPI.

Capital expenditure for the institution is provided separately by LCC but typically some of this funding comes to Council via capital grants from the State and/or Federal Governments. For the calendar years 2009,2009, 20010 & 20011 Council has secured $4.06 Million towards the refurbishment of the QVMAG’s Royal Park campus. The total cost of the refurbishment project is anticipated to be in the order of $9.3 Million. This represents a ratepayer investment of between $170 and $180 per rateable property come the reopening of the refurbished QVMAG’s Royal Park campus.

In addition to government funding, the institution from time to time receives project and research funding from State and Federal funding agencies. Sometimes this is supplemented by private and corporate donations and sponsorships – typically as funding for the acquisition of works for one or other of the institution’s collections. In recent years this has become less significant in the QVMAG’s annual recurrent budget. Also, the institution’s ‘operation Income’ is relatively insignificant given that 2009/2010 it hovered around $3,500.

Furthermore, the institution by and large relies upon private and corporate funding and sponsorships to support its acquisitions program either directly or via the QVMAG’s Foundation.

Overall the total ongoing operation of the QVMAG as an institution is dependant upon an admixture of government funding – Local, State & Federal – with the lion’s share of recurrent funding being provided by LCC.

Nonetheless, the institution is dependant upon private and corporate donations, sponsorships and in-kind support, all of which depends upon the institution presenting as one that is truly accountable and equivalent to like institutions elsewhere – an adherent to best practice in both corporate management and museum practice.

Please click on the image to enlarge

GOVERNANCE MODELS

Members of the QVMAG Governance Working Group have consulted several papers on museum governance and visited a number of museums to investigate and research examples various museum and art gallery governance models. Several members have direct museum and arts experience.

The role of an institution’s governing body is to determine the policies that give it shape and substance. Conversely, management’s role is to administer the institution in accord these things through effective planning processes, program delivery and promotion strategies.

The literature provides governance options that are in place across Australia. They range from appointed Boards of a company or incorporated association who report to shareholders or members through to employed officers who manage the institution and who report directly to an organisation or authority, such as local government. Fundamentally, governance bodies are representative of and thus are accountable to a constituency – here in respect to the QVMAG, primarily ratepayers, government funding agencies, taxpayers, donors, sponsors, et al – and thus on its behalf governance bodies determine the institution’s:

1. Purpose for being – its raison d’être;

2. The scope of the operation;

3. Objectives and goals;

4. Policy sets to do with such things as accession & deaccession, research & publication, ethics, security, etc.; and

5. Determine the operational standards pertaining the operation against which the performance of the institution can be measured and assured.

Given that QVMAG operates under the aegis and custodianship of Launceston City Council the institution falls under the Local Government Act 1993 and under the Act Council has the ultimate responsibility for:

1. The custodianship of the institutions publically owned cultural property;

2. The custodianship of the institutions its publically funded collections; and

3. The operation of the institution for the benefit of the wider community.

In this sense Launceston City Council is seen as the institution’s governing body that is both representative of the institution’s Community of Ownership and Interest and directly accountable to it via the city’s electorate.

Over time LCC Aldermen have become functionally less and less engaged with the institution’s governance and neither has Council established a governance mechanism nor delegated its governance role to a subordinate group or Committee of Council under the Local Government Act. Consequently, the institution’s governance and operational roles have become blurred – and sometime ambiguous.

As a result of its relationship with LCC the QVMAG, as an institution, is bound by policies determined by Council and a governance structure plus a set of agreements broadly determined in accordance with Tasmania’s Local Government Act.

Accordingly, the QVMAG’s staff members are employees of Council and as such they work under the LCC Enterprise Agreement 2010. In this, the QVMAG is not so very different to many local government institutions funded similarly to the QVMAG or indeed Tasmanian Museum and Art Gallery. The TMAG has the status of being the ‘State museum’ and as such the Tasmanian State Government directly funds it with its staff falling under the aegis of the Tasmanian Public Service.

THE QVMAG’S STATUS AS AN INSTITUTION

The QVMAG is a not for profit community cultural enterprise and research institution that is currently auspiced, governed and managed by Launceston City Council.

The QVMAG is not a company, incorporated association or statutory authority and as such it does not have a board of trustees – in effect the LCC Aldermen are the institution’s trustees. It is nonetheless a distinct ‘corporate entity’ accountable to a set of constituents and contributors who are ratepayers, taxpayers donors and sponsors. All of these contributors are funding the operation together and are thus owed similar levels of accountability that other corporate/incorporated bodies are obliged to deliver to their constituency/memberships/shareholders.

While the QVMAG is not a State Government institution, such as TMAG, and institutions that commonly have a Board of Trustees, it is nonetheless an institution of similar scale and complexity to the TMAG requiring a high level of sophistication in respect to its governance. Given the importance and value – cultural, scientific & fiscal – of the cultural property held in the QVMAG’s collections it is an imperative that it is unambiguously accountable to its Community of Ownership & Interest.

There is however a range of regional or specialist museums that have developed associations and societies that are bound by relevant constitutions and/or articles of association. These institutions normally have 'not for profit' status, as does the QVMAG, and are not directly owned and operated by any level of government albeit that many/some/most would the recipients of government funding – Local State & Federal – for projects they are engaged with if not for recurrent expenditure. In this category are many of the historical society museums, heritage trusts and club associations.

It is important that QVMAG is accountable to its Community of Ownership and Interest and consistent with this it needs to embrace and engage in a more consultative process than it has in recent years.

Governance is fundamentally to do with the determination of policy and ultimately accountability accountability and with this in mind it is now an imperative that a governance mechanism be established via a standalone group with formal rules, proceedings and terms of reference – see the draft Charter for a QVMAG Museum Governance Advisory Board and the attached charts.

In order to ensure accountability it is proposed that a governance advisory board be established. It will need to be charged with the tasks of either to determining or formally advising LCC – the Aldermen – on:

• The institution’s scope and purpose as a museum and art gallery
• The institution’s objectives and goals;
•  The institution’s expected operational standards; and
• The establishment of performance indicators relative to these things.

It must not be a management committee in any sense as its function is to determine, or advise on the determination of, institutional policy. In an advisory role, it will be the QVMAG’s penultimate governance body (Museum Governance Advisory Board? MGAB) and it would report directly to Launceston City Council’s Aldermen, the QVMAG’s ultimate and definitive governing body.

As the QVMAG’s penultimate governance body, aided by key Council officers and QVMAG staff, the MGAB would adopt a primary role in regard to:

• Advising LCC on the determination of QVMAG policies;
• Advising LCC on the QVMAG’s Strategic Plan;
• Advising QVMAG management on its annual business/enterprise planning; and
• Advising QVMAG management on its annual programming, marketing and promotion issues where appropriate.

Governance’s fundamental role, here LCC Aldermen’s role, is to:

• Determine policy and thus the nature and scope of an operation under its control/custody;
• Set in place the policies under which the QVMAG operates; and
• Establish the standards against which that operation’s performance will be measured, assessed and assured.

Set against all that, management’s role, under the direction of the institution’s Director, and here reporting to LCC’s Aldermen via the city’s General Manager, is to deliver on these things via the operation’s planning processes, programming – annual & beyond – and its promotion/marketing.

Governance’s and management’s roles are distinct and fundamentally different and in recent years in respect to the QVMAG the distinctions between the two roles has become blurred and counterproductively ambiguous.

It is anticipated that the MGAB could/may replace the current Advisory Group and assume some of its role. However under the Tasmanian Local Government Act the current Advisory Group may well remain in place in support of the QVMAG Director in her/his management of the QVMAG as an institution. Furthermore, it would be appropriate for the QVMAG’s Director to put in place other special purpose stand-alone advisory groups.

Arguably, the QVMAG needs an Aboriginal Advisory Committee to advise the Director and staff on all matters relevant the inclusion of the Tasmania Aboriginal community in the institution’s strategic and enterprise planning processes – as does the Tasmanian Museum & Art Gallery. Given Tasmania’s colonial histories and the institution’s custodianship of the Tasmanian Aboriginal community’s material cultural production, and other research material, this should be seen as an imperative.

Likewise, it can be argued that the QVMAG similarly could profitably use the advice of similar and distinct groups offering support on such matters as funding and income generation, research, marketing, community engagement etc. Such committees/reference groups may well have a very limited life and relevance and some may have a longer-term relevance.

It should be acknowledged that under the Tasmanian Local Government Act, Council already has the power to authorise the QVMAG’s management to assemble such management advisory groups – ad hoc & formal – as the need and occasion arises.

In regard to the MGAB, it membership should comprise of people that have administrative, marketing, financial, academic and cultural experience relative to cultural and educational institutions in order that they can provide advice to LCC Aldermen on all matters relevant to the governance of the QVMAG as a cultural institution.

This would be in addition to the QVMAG Director who has a similar role from a management and operational perspective.

Ideally the MGAB should also take on an advocacy role and assist with developing partnerships and expanding the QVMAG’s funding options in concert with management advisory committees the QVMAG Director may set up from time to time.

It is recommended that the MGAB members will be appointed for a fixed term by the Council’s Aldermen following a selection process that takes into consideration relevant expertise and areas of interest.

It is an imperative that appointments to the MGAB are made solely on the criteria of what skills, expertise and experiences a member will bring to the MGAB. It will be important to ensure that the MGAB members contribute to the QVMAG and do not see themselves on the committee to simply represent another interest group given the QVMAG’s Charter.

MARKETING & MEMBERSHIP

In order for the QVMAG to engage more effectively with its Community of Ownership and Interest (COI) and other audiences, arguably it will need to reappraise not only its governance mechanisms but also its marketing strategies – that is ‘marketing’ in its broadest context rather than ‘advertising.’ If the institution is to fulfil the QVMAG’s potential commensurate with the community cultural capital invested in the institution – $230 Million in collections plus the capital value of the infrastructure – it is important that the institution be proactive in its engagement with its COI – ratepayers, taxpayers, researchers, funding agencies, sponsors, donors etc. – and other audiences – tourists and other visitors.

An important way of achieving COI engagement is to develop relationships – formal & informal – with the individuals and groups who have a sense of ownership for and interest in the QVMAG. Memberships of various kinds, and in various contexts, would be a useful policy based strategy in achieving such a goal. Directly, it is unlikely to contribute to the institution’s income stream in any significant way. Nonetheless, as a component of a broad based marketing strategy, ‘institutional memberships and/or associateships’, have the potential to deliver a variety of tangible and intangible benefits of mutual benefit to the institution and its COI.

The QVMAG already acknowledges researchers who in one way or another have formed formal and informal relationships with the institution. Indeed, these associates raise the QVMAG’s research profile considerably and so much so that it points to there being a largely unrealised potential to be proactive in recruiting research associates across the various research and collection units in the institution.

In similar and quite different ways a QVMAG membership network has the potential to raise the institution’s profile in both the Tasmanian community and the national (international?) museum cum arts community. Interestingly, it would go some way towards restoring the kind community engagement with the institution’s collections that Launceston Mechanics Institute aimed to do in the mid 19th C.

Membership is an issue that is both a governance matter relative the institution’s Strategic Planning process and an operational issue in that it will have impacts upon the institution’s planning, programming and promotion requirements. It is presented here as an exemplar of the kind of ‘policy initiatives’ that might well fail to win managerial support, or even any attention, without truly accountable governance and management mechanisms in place – and a governance mechanism that is proactive in policy development.

CHARTS & DIAGRAMS