Governance Practices Disclosure Statement
ARTS ORGANIZATION

Principles of Organizational Sustainability

A. The Board of Directors of the (arts organization legal name) shall support the business management of the organization.

This requires an explicit responsibility assignment in the form of organizational bylaws or written job descriptions for board members. It must be clear to management that while many duties are delegated by the Board to others, ultimate responsibility for the organization rests with the Board.

B. The Board of Directors of the (arts organization legal name) explicitly acknowledges that stewardship of its organization is its primary responsibility. As part of stewardship, the Board has responsibility for:

  1. The development and adoption of a continuous strategic planning process;

    Board members are expected to inform themselves of the mission, resources and environment of the organization.

    Through an integrated, comprehensive planning process, overseen by the Board, the organization will regularly produce an updated, long-term (3-5 year) strategic plan. The strategic planning process should, at a minimum:

    1. analyze the environmental factors affecting the market in which the organization operates (competition, audience, opportunities for sponsorship, and donors) with appropriate use of data;
    2. assess the risks and opportunities arising from the analysis and determine action and artistic plans which mitigate risks and exploit opportunities consistent with the resources of the organization;
    3. explicitly identify the level of financial risk in financial forecasts flowing from the action and artistic plans, and a mitigation plan to deal with the risk.

  2. The adoption and monitoring of a financial operating scale appropriate to the organization's revenue base. In support of this: the Board

    1. will use reasonable efforts not to approve a budget with an annual operating deficit nor will it approve a budget which it believes to be unrealistic;
    2. requires a budgeting process which approves expenditure levels based on a forecast of expected revenue, with appropriate contingency for risk;
    3. receives from management and reviews on at least a quarterly basis financial reports that include balance sheets and income statements with variance reports and cash flows covering the financial contributions of all major activities, including productions, special events, fundraising, marketing and promotion, etc;
    4. shall require management to take reasonable steps to implement adequate mechanisms of internal control and management information systems;
    5. supports a policy wherein management maintains the objective of developing an adequate level of working capital.

  3. The monitoring of succession planning: performance assessment, appointing and training of new board members, and executive management.

    1. The Board is responsible for ensuring new board members and executive management comply with the practices outlined herein.

For the applicant professional arts organization

  • Chair/President of the Board
  • Signature
  • Date

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