Principle 2.1 Drive strategy

The board should drive and oversee your organisation’s strategic direction. 

‘The more uncertain and shifting the environment becomes, the more important it is for arts organisations to have a clear sense of purpose: to think and act strategically’ – Charles Leadbeater, author of Arts Organisations in the 21^st Century: Ten Challenges 

How boards should drive strategy 

The board should:  

• guide and oversee your organisation’s strategic plan to deliver identified outcomes and vision
• account for key stakeholder expectations 
• determine priorities to ensure organisational stability and financial viability 
• work with your Chief Executive Officer (CEO) to revise the strategy as needed 
• ensure decisions are aligned with strategic priorities and risk
• celebrate your organisation’s achievements with staff and stakeholders.  

 
What’s a strategic plan?

A strategic plan is a ‘road map’ explaining what you’re doing, why you’re doing it and how. It basically  
summarises ‘where you want to play’ and ‘how you will succeed’.  

In developing a strategic plan, start by analysing your environment, both internal (strengths and weaknesses) and external (opportunities and threats). Based on this you can determine the best opportunities to pursue, and strengths you can leverage and must develop to deliver on your mission. 

It should include: 

• your mission and vision 
• your target audiences 
• your strategies and related goals and activities 
• measures of success and an evaluation framework 
• a financial summary that explains your financial model and forecasts 
• your board or governance, staff and collaborators. 
   

Principle 2.2 Define clear roles and responsibilities

The distinction between the role of the board and management is fundamental to good governance. Yet, this is often difficult to get right. Your board of directors should act as one in decision-making to govern your organisation. Management should focus on delivering the strategic plan and day-to-day operations. Board members should not be involved in day-to-day operational and management matters. 

To make the distinction, you need clear roles and responsibilities.  
 

How boards clarify roles and responsibilities

The board should:  

• adopt a formal charter outlining its principal functions and responsibilities 
• recruit, support, evaluate and, when necessary, replace the CEO and/or artistic board member  
• create a skills matrix to identify diverse and relevant skills and experience needed to support your organisation to deliver on its mission and strategy, including at least one board member with financial expertise 
• appoint board members on merit through a transparent, ordered succession process, ensuring continuity of appropriate skills, experience and knowledge 
• support new board members with comprehensive induction, including expectations of behaviour
• clearly define and differentiate the roles and responsibilities of board members and management 
• document delegated authority to management and periodically review delegations 
• understand board member obligations under legislation, policies and rules
• consider maximum board member tenure (for example, 10 years) to ensure the board refreshes for diversity of thought while retaining corporate knowledge
• ensure key management have formal job descriptions describing their term of office, duties, rights and responsibilities and entitlements on termination 
• ensure board members bring independent thinking, question assumptions and constructively challenge management.