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Orchestra governance should honor the founders’ intent

MinnPost photo by Corey Anderson
I propose that a membership governance structure be implemented again for the current Minnesota Orchestral Association to ensure that the board will answer to and be acccountable to a diverse group.

State Rep. Phyllis Kahn, DFL-Minneapolis, has proposed a community ownership model for the governance structure of the Minnesota Orchestral Association (MOA), with a holding corporation selling shares in the MOA to the community, similar to the Green Bay Packers’ model.  On Feb. 25, she introduced H.R. 1930, a bill that would set in motion a change in governance structure that was never intended by the MOA’s founders.

During my research into MOA’s governance for a three-part series on my  Eyes on Life blog, I learned that the founders had something very different in mind.

Article II of the Articles of Incorporation, filed in 1907, created a membership of the association, one in which anyone could join as long as he or she paid the annual dues. This ensured that people dedicated to artistic excellence and classical music governed the association. Loss of membership occurred if the member stopped paying annual dues. A membership governance structure for nonprofit corporations is governed by Minnesota Statute 317A

Each member held the right to one vote, either in person or by proxy. The members elected a board of directors out of their diverse membership to govern the association. And the board, out of its membership, elected the officers. The founders meant for the officers and board to be accountable to the membership, as well as serving the wider community in Minneapolis and Minnesota.

In Minnesota, nonprofit corporations can choose whether or not they want a membership governance structure. I propose that a membership governance structure be implemented again for the current MOA to ensure that the board will answer to and be acccountable to a diverse group.

‘No capital stock’

The dues could be $100 annually for adults, perhaps offering other levels such as student, family, and institutional (for companies, businesses, and schools). Unlike Kahn’s idea, it respects and obeys the founders’ Article III: “There shall be no capital stock of this corporation.” They showed they wanted the association to be solidly nonprofit, with no possibility of anyone to own any part of it or have expectations of a monetary return on their investment. The membership structure preserves the association’s nonprofit status.

Originally, members benefitted simply by being members of an association dedicated to the performance of the best in classical music and to the creation of education programs about classical music. The founders didn’t specify any other benefits in the original articles.

Today’s association, however, could offer additional benefits, such as single ticket or subscription package discounts, attending rehearsals, periodic receptions with the musicians, and so on. A student benefit could include a “concert card” that would give the holder one ticket to a subscription concert for a substantial discount. A family benefit could include discounted family concert series subscriptions. For an institutional benefit, perhaps offer a block of free tickets to a specific number of concerts each season.

Currently, anyone can buy tickets to any concert they want to attend. That would not change under the membership model. In addition, anyone would be able contribute to the MOA, either to the endowment, for operating expenses, or specific artistic initiatives, be they members or not. I propose that guest artists also receive an invitation to become members of the association.

Preserving accountability

Under this governance structure, the board would be accountable to the membership, without an expectation of a monetary return on investment, but with a sense of ownership and governing participation in the future of the MOA. 

Technology eases the logistics of communicating with a large local, regional, national and international membership. Voting could be done via the internet – many corporations already do this for their shareholders.

The Articles of Incorporation would need to be re-stated in compliance with Minnesota Statute 317A and re-filed with the Secretary of State, and the association’s bylaws revised. I propose that the bylaws include specific job descriptions for the board and officers, including conditions under which they can be removed.

It could also take some time to re-establish the membership structure. I believe, however, that it is the strongest governance structure for the MOA for the future of the Minnesota Orchestra. 

If you agree, please contact MOA Board Chair Gordon Sprenger, and your state legislators, including Rep. Phyllis Kahn.

Minnesota writer Gina Hunter blogs about the Minnesota Orchestra, health care, and other topics of current interest at Eyes on Life.

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Comments (13)

  1. Submitted by Steve Titterud on 03/08/2014 - 06:16 am.

    Your proposal makes perfect sense and would promote…

    …the fundamental interest of the community as a whole – the artists, the ticket buyers, the donors (remember that capital campaign), and the public at large (remember that bonding and lease business) through the direct accountability of the Board to all these parties.

    Question #1: why on earth would this clubby Board, high $$ donors who bought their seats, agree to give up control of “their baby”, the MOA ? The Board imagine they are better suited to make the important decisions than ordinary riff-raff, and obviously, accountability is not very high on their list of priorities. Don’t hold your breath waiting on the MOA Board to voluntarily give up its power and control.

    Question #2: Can the state of MN actually TAKE OVER the MOA and its Board ?? That’s what Rep. Kahn’s bill seems to presume, but is there a basis in law for this ?? How do you “acquire the Minnesota Orchestra” (the bill’s words) if the MOA Board is unwilling to be taken over – except by force of law ?? Is Rep. Kahn’s bill even feasible – as law ?? If so, and if passed into law, would it act as precedent for the state to take over other non-profit entities ?? Maybe there is a history of this in MN, and I just don’t know about it. Someone please pipe up here on this point.

  2. Submitted by Paul Brandon on 03/08/2014 - 09:24 am.

    For better or worse

    This is not 1907.

    Did the original MOA own and maintain a building?
    How many musicians were there? Were they world class?
    How much money (in current dollars) did the original MOA raise?

    By honoring the original MOA’s intent would we not perform any music not in the repertoires of the musicians in 1907?

    The analogy has its limits.

  3. Submitted by Michael Wunsch on 03/08/2014 - 02:35 pm.

    Excellent proposed changes

    These proposed changes to the governance structure are deeply needed; the current structure of the MOA has become an impediment to the orchestra’s long-term success and its ability to generate donations from patrons. I would love to support the orchestra with regular donations (I gave generously to the musicians), but it’s extremely difficult to justify donations to the MOA under the current governance structure.

    The current board has made it clear that it does not respect the opinions of patrons. This disrespect was on clear display during the lockout when the MOA invited “important” donors to closed-door question-and-answer sessions, turning away other “non-important” but deeply dedicated patrons at the door, and refusing to answer most of letters or e-mails sent to them by concerned patrons. This disrespect is still on clear display as the board decides the leadership of the orchestra behind closed doors without engaging patrons. A telemarketer from the orchestra actually hung up on me without so much as a polite good-bye when I indicated I would only donate and purchase a subscription if Vanska were rehired.

    There is clearly deep interest in the community in supporting this orchestra, as witnessed by the surprising amounts of pledges that attorney Lee Henderson was able to generate with a simple op-ed piece in the Star Tribune. We need an organization that respects and engages patrons and inspires people to donate through its vision of excellence in classical music performance and outreach.

  4. Submitted by Gina Hunter on 03/08/2014 - 03:15 pm.

    Reply to Steve Titterud

    Hi, Steve,
    Question #1: No one can force the MOA Board to do anything although I believe that’s what Rep. Kahn’s bill is designed to do. What I am hoping is that the current Board will find it more in the MOA’s best interests as well as their own to consider and implement a membership governance structure. They probably won’t want the State to be involved in the process and take it out of their hands. Do they have the courage? The wisdom? It takes more than $$ to be the best stewards of an arts organization.
    Question #2: Rep. Kahn’s bill is the first step in making her proposal law. So yes, I believe if it becomes law, the state will create an organization that will “take over” the MOA. But why would the State want to become so involved? Wouldn’t it just be easier to give megabucks and demand, in exchange, a change in the governance structure? I still think that if the Vikings can take Minnesota for millions, the state should consider more financial support for the arts above and beyond the Legacy Amendment.
    Gina

  5. Submitted by Hiram Foster on 03/09/2014 - 08:45 am.

    The Money

    The problem that threatens the orchestra’s future isn’t it’s structure, isn’t it’s accounting or it’s accountability,isn’t that somebody is making a profit from orchestra operations. The problem is that it’s operating at a loss in a fundraising environment that is deteriorating for this kind of charity.

    It may well be the case that this current board is inept, I don’t have enough information to evaluate that. But I am pretty sure they are good people, trying to do the best they can, and they are putting a lot work into something that provides them with no monetary reward, and a whole heck of a lot of aggravation. They are the furthest thing from being the bad guys here.

    The lockout is over. It really is time to put aside the grievances, the hurts large and small and focus on the future of the orchestra. The orchestra needs to put together a united front visibly committed to outstanding artistic excellence while maintaining financial stability It’s that image, that will serve the orchestra best going forward. It won’t solve all of the orchestra’s problems but it’s one sure way to start.

    • Submitted by Steve Titterud on 03/09/2014 - 12:53 pm.

      Who is responsible for this disaster, if not the Board ?

      The ultimate responsibility, legally and every other way, resides with the Board.

      There is no doubt that financial stress is a root problem, but I disagree with your thesis that an operating loss is the one and only problem threatening the Orchestra’s future. And even if it were, the Board is ultimately responsible for managing this threat as best it can.

      Do you really think this was the best they could do ?

      To say the Board is ultimately responsible is not to contradict your surmise that these are good people. I don’t doubt there are Board members who bit their tongues and held their noses while voting to support the headstrong executives and their legal counselors, who nearly destroyed the Orchestra, supposedly to save it. But there were also those who stubbornly hewed to the party line that the musicians’ salaries were the biggest problem the Orchestra had, whereas in fact there was previous poor performance in financial matters that raised the urgency. Regardless of any internal doubts, the Board doggedly supported all the actions of the MOA executives. Those executives act only on authority of the Board. The Board must own it all.

      Although the qualifications, selection, and approval process (if any) for persons to take a seat on the Board are murky (anyone who knows as a fact, please pipe up here), I can’t find anywhere what those qualifications are or what the selection process requires. Maybe it’s like a true club, in the manner of, say, the Masons – you must be invited by someone already a member, to get, you know – unit cohesion.

      If someone on the Board knows what these critieria are, why don’t they pipe up here and let us all know ? It would illustrate a spirit of opening the doors to the Boardroom to let the light of day in. This Board at present is opaque. In the meantime, and until someone on the Board opens up about this, money would appear to be the sine qua non of Board membership.

      • Submitted by Hiram Foster on 03/10/2014 - 08:30 am.

        Operating loss

        I have no doubt that the orchestra has a number of problems to deal with and overcome, but the financial problems it faces are the ones that threaten it’s existence.

        “Do you really think this was the best they could do ?”

        Not by the longest possible shot. I thought the course of action chosen by the board was beyond disastrous. The board, faced with a difficult labor solution, hired for themselves and English tough guy whose view of labor relations seemed to have been left over from the Thatcher era. The result was a long and bitter lockout which did serious and potentially irreparable damage to a cultural institution already in extreme jeopardy. This was pretty close to the worst they could do, but it’s done, and it’s up to the rest of us to pick up the shattered pieces of this orchestra, and find a way to put them back together.

        As they used to say back in the day, everybody in the orchestra community, it’s audience, it’s patrons, it’s board members, it’s musicians, it’s managers and employees, can pick one of two choices. They can be part of the solution, or part of orchestra’s already immense problems.

        • Submitted by Gina Hunter on 03/10/2014 - 03:21 pm.

          Osmo is the Solution to Financial Issues

          Hiram, there’s no doubt that the financial issues continue, although the settlement did alleviate some of them. I’d like to point out that Osmo’s popularity, and his national and international reputation, will go much further to help raise money than Henson will. With Osmo back at the helm, the healing begins and the restoration of the MO’s reputation also begins. With that will come far more opportunities, far more willingness to donate, far more willingness to buy tickets, I think, than if he’s not there.

          My governance reform proposal is in response to my own dismay at the MOA Board’s lack of accountability and responsiveness to a crucially important stakeholder: the community. I want to see more community involvement and I think the membership structure will involve the community in a productive way. The Board needs a broader base of membership, also. I think this can be accomplished through the membership structure. And I think if the community sees the Board willing to take a hard look at itself and its governance structure, and then move to make changes, it will be a huge, huge plus for the future of the MOA.

  6. Submitted by Ben Munroe on 03/09/2014 - 02:43 pm.

    Power tends to corrupt…

    When we see other orchestras around the U.S. performing well financially, and consider the strong public support for the musicians during the lockout, I don’t think we can simply attribute the orchestra’s problems to a deteriorating fund raising environment. I agree that a united front is needed, but that unity needs to include ALL orchestra patrons, and so far I have not heard any responses from the management and board to patrons’ concerns other than, “We’re working on it.”

    I am sure the board members, or at least the vast majority of them, are good people with good intentions. But they are also people with a lot of wealth and power, and when I read about all the closed door meetings and the self-selecting membership of the board, that raises some red flags. It is not hard to imagine an ideology creeping in that, consciously or unconsciously, works to further concentrate wealth and power, similar to what we are seeing elsewhere in society (voter rights restrictions, opposition to campaign finance reform, privatization of the educational system, etc.).

    If the board members are trying to do the best they can, and feeling a lot of aggravation, why not hold a public meeting to address patrons’ concerns, and reach out to the patron groups that pledged so much support during the lockout? Why not open up the membership of the board, including some seats for musicians? Then we would finally see the united front committed to artistic excellence and fiscal sustainability.

  7. Submitted by Amy Adams on 03/10/2014 - 01:30 am.

    And they’ve had more than a week now…

    Zero statements from the board.
    Zero actions by the board.
    Absolutely nothing from the mouth of Michael Henson.

    What are they waiting for?

  8. Submitted by Hiram Foster on 03/10/2014 - 12:32 pm.

    “When we see other orchestras around the U.S. performing well financially, and consider the strong public support for the musicians during the lockout, I don’t think we can simply attribute the orchestra’s problems to a deteriorating fund raising environment.”

    I have decided not to see it that we too. We were told, in effect, that the Minnesota Orchestra’s poor financial performance was an outlier. Other, similar orchestras were thriving, and offer a model for how our orchestra should be run. Well, now that the deal is done, the musicians are back to work, I am waiting for proposals to bring the Minnesota Orchestra’s performance up to the standard of this booming industry.

    • Submitted by Steve Titterud on 03/10/2014 - 03:18 pm.

      Good financial performance is vital to the Orchestra’s future,..

      …and it would seem that cannot come from this Board without serious accompanying risk.

      What I mean by risk is that the Board and the whole MOA organization seems to be in denial that they screwed up in financial management and lost donors’ money as a result. So long as they refuse to look in the mirror and publicly accept their responsibility, we can expect the same in future. Why change financial management, if there was never anything wrong with it in the first place ??

      Add to this the Board’s awarding bonuses to the executives who nearly drove the Orchestra to its grave, and you really have to wonder if this Board, as a whole, are up to the responsibility.

      The performance of this Board of Directors is disgraceful in spite of having some fine people. I hope the community withholds its full support until there is a significant house-cleaning.

      Gina Martin has a fine hope for implementing that house-cleaning, although its legality is murky to me. Can the state legally take over such a corporation – and its endowment! – merely because it doesn’t like the way the Board runs it ??

    • Submitted by Gina Hunter on 03/10/2014 - 03:24 pm.

      Hiram

      The proposals are out there. 1) Bring Osmo back. 2) Let Michael Henson go. 3) Reform the governance structure of the MOA Board. 4) Put back the box office open during business hours during the week in the Orchestra Hall lobby so it’s super easy to buy tickets in person. 5) The Board needs to communicate better with the community it serves, and I don’t mean other wealthy donors.

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