Leaders of art institutions and big businesses find themselves in surprisingly similar situations. For decades, their performance – and very often their job tenure – were largely determined by a single group: In the corporate world, that was shareholders; in the art world, the board of trustees.
Both groups remain powerful, but neither exert the lopsided influence they once did. Instead, leaders and their organisations are facing a wave of activism from a wider group of constituents that have not traditionally been considered.
For businesses, that’s meant increased scrutiny from employees, consumers, and local communities, while a diverse group of protestors have targeted some of the art world’s most hallowed institutions – from The British Museum to The Louvre, The Whitney to the Royal Shakespeare Company, The Natural History Museum to The Metropolitan Museum of Art.
Both art and business leaders find themselves in uncharted territory, yet corporate executives have an advantage in one sense: decades of experience preparing for, and engaging in, public battles with activist shareholders. Our experience helping clients navigate activist shareholders situations shows that these skirmishes carry lessons for art institutions as well.
Know your shareholders (and stakeholders). In addition to their traditional engagement with shareholders, companies are also increasingly “stakeholder mapping,” identifying every group that touches their business: customers, employees, local communities, and widening out to include media, trade groups, politicians, and NGOs. Museums and cultural organisations should similarly clarify the lay of their land – beyond their professional peers and board. The more rigorous and comprehensive the map is – social media has rewritten the rules for where pressure can come from – the more useful it will be.
Engage with those stakeholders. This doesn’t necessarily mean talking at groups or targeting them with advertising, but rather being open to hearing from them. What do they think of management’s actions, what changes do they want to see? Their opinions exist whether you are aware of them or not; knowledge at least allows you to prepare and possibly take action. An added benefit of engagement is that it ensures the first time these stakeholders hear from you isn’t in the midst of a crisis.
Consider your board composition. A prize for an activist investor is often a seat on a company’s board; art activists often seek the opposite outcome, removing a trustee or funder whose business interests or political affiliations they deem unethical. Both cases warrant similar preparation. First, look at your current board. Does it represent the strategy and values of your organisation? Does your institution reflect the people you’re serving? A more forward-looking step was put succinctly by Darren Walker, President of the Ford Foundation, earlier this year: “Boards (of museums) need to include members from more diverse perspectives and backgrounds. After all, no institution in a democracy that aspires to reflect society, or serve the public, can do so without representing the communities that constitute it.”
There are, of course, important practical and tactical differences between activists in the corporate world and the art world – differences that, if anything, make the challenges facing art institutions even greater.
Shareholder activists tend to follow a fairly well-defined process: buy shares, outline desired changes, then pressure management and the board to institute those changes. The way those changes are presented are also familiar: put resolutions or a slate of new director candidates at the AGM for other shareholders to vote on.
No similar governance process exists in the art world, and stakeholders are less defined. They can be outsiders with no direct ties to the art institution who simply disagree with the political views of a trustee. That makes it much harder for an art institution to navigate a clear outcome with these activists, while also rendering them more vulnerable to public pressure – making preparation all the more critical. In such a charged environment, it might be tempting for companies and institutions to say nothing or to seemingly react in a defensive manner. Yet given how much of today’s scrutiny emanates from groups that revel in stating their case publicly; silence is a risky option. For art institutions, being proactive, of course, bears risk, but it can also communicate that those organisations, which depend upon both trustees and public support to survive, genuinely care about both.
Amelia Pan is a Partner in Brunswick’s London office, focused particularly on investor engagement, environmental, social, and governance (ESG), and shareholder activism. Prior to Brunswick, she was an Executive Director with J.P. Morgan.