INTERNATIONAl JOURNAl OF ARTS MANAgEMENT4

Johanne Turbide (PhD, University of Warwick, England) is professor of accounting at HEC Montréal Quebec, Canada, where she teaches financial management in the arts. She is the lead-ing researcher for the project Financial Crises in the Arts Sector.

Claude Laurin (PhD, University of British Columbia, Canada) is professor of accounting at HEC Montréal, where he teaches undergraduate and graduate courses in man-agement accounting and corporate governance. He has published extensively on public sector management and on corporate governance issues in European and North American journals.

Laurent Lapierre holds the Pierre Péladeau Chair in leadership at HEC Montréal. He teaches courses on leadership, management of arts enterprises and cultural industries. His research inter-ests include leadership and the influence of managers’ personalities on their man-agement style and the role of management behaviour in an organization’s performance. He has served as editor of the journal Gestion: Revue internationale de gestion. He is a board member and an executive committee member of the Canada Council for the Arts.

Financial Crises in the Arts Sector: Is Governance the Illness or the Cure?Johanne Turbide, Claude laurin, laurent lapierre, Raymond Morissette

aNagEMENt aNd orgaNizatioNsM

Introduction

Not-for-profit organizations (NPOs) in the arts and culture sector in Quebec are internationally renowned for their

creativity, innovation and performance stan-dards. Numerous organizations in the perform-ing, visual and multimedia arts have earned critical praise, recognition and honours both nationally and internationally. Quebec is prized for its cultural effervescence, of which its people are very proud.

However, many arts and culture NPOs have found to their dismay that artistic success does not automatically translate into financial health. The tension between artistic success and finan-cial health, which has been the subject of much debate in the arts and culture sector, has now come to the attention of the public. In the last five years, financial crises have struck several key arts and culture NPOs, both large and small. Crises at Théâtre du Rideau Vert and Musée du Bas Saint-Laurent have been the subject of extensive media coverage. These organizations are artistically viable yet find themselves with large accumulated deficits.

Could weak governance be one of the causes of these crises? If weak governance is in fact an illness permeating the arts and culture sector, then it might be argued that many of the financial crises we are witnessing today could have been avoided. It is possible that through better governance the stakeholders1 of these

organizations could have anticipated the finan-cial and organizational problems.

This article constitutes a first step towards our ultimate goal: to understand the role that governance could have played in preventing the financial crises now facing arts and culture NPOs. In this first step, we define a preliminary governance framework for NPOs and describe the research strategy of a major project2 centred on governance in the arts and culture sector and its role in the financial stability of various organizations.

The article is organized as follows. First, we review the literature on governance of NPOs. Next, we outline the governance framework that will serve as a basis for the subsequent empirical research. Finally, we describe the research strategy that will be used for the empirical investigation.

Governance of Arts and Culture NPOs

The interest in governance shown by eco-nomic and management scholars over the

last few years is linked to a conviction that the health of any type of organization depends on sound governance. In the neoclassic economic literature (Bushman and Smith, 2001; La Porta et al., 2000; Shleifer and Vishny, 1997), gov-ernance is defined primarily as a means of pro-

VOlUME 10, NUMBER 2 • WINTER 2008 5

tecting investors. In the last decade, myriad articles have addressed issues related to the governance of for-profit organizations.

The literature has also addressed issues related to the governance of NPOs, but the issues have not been as thoroughly investigated for NPOs as they have for commercial enter-prises (Mordaunt and Cornforth, 2004). Before engaging in an in-depth examination of gov-ernance in arts and culture NPOs, let us look at the key topics covered in the litrature.

Accountability, or the Need to Identify a Principal

For many scholars interested in NPO govern-ance, the first issue – and this is one of the main differences between for-profit and not-for-profit organizations – is the difficulty of identifying the “true” owners of NPOs. In the absence of direct ownership, many scholars argue that even if we cannot identify a true owner, we still need to identify the stakeholders represented by the board of directors (Houle, 1989). Addressing this question in terms of agency theory, Miller (2002) argues that in order to discuss NPO governance we need to identify a principal. In the not-for-profit gov-ernance literature, identifying the group of stakeholders that function as the equivalent of principal seems to be an open question.

Youssofzai (2000) argues that the principal should be the beneficiaries of the NPO’s servi-ces. Hafsi, Séguin and Toulouse (2000) adopt a different perspective. They argue that the principal should be the funders. They suggest that the survival of NPOs is underpinned by resource dependence theory and hence their success relies on their ability to raise funds (see also Speckbacher, 2003; Olson, 2000).

For the purpose of constructing our prelim-inary governance framework for arts and cul-ture NPOs, we take a balanced position. We argue that the leaders of NPOs are account-able to a variety of stakeholders but that fund-ing bodies should be central to the organization’s governance practices.3 In fact, in recent research on how performing arts NPOs measure their performance, leaders of arts and culture NPOs in Quebec ranked funding agencies as the stakeholders to whom they were most account-able4 (see Turbide and Laurin, 2007; Chiapello, 1991). Our proposed framework reflects this position.

Relationships between Staff and Board

Another key topic in the literature is the “pat-tern of board-staff relations and their determin-ants” (DiMaggio and Useem, 1978; Zolberg, 1981, in Ostrower and Stone, 2006). Studies that analyse this issue are concerned mainly with arts boards. They find that relations between staff and board are both complex and evolutive.

The literature suggests the emergence of two types of staff-board relationship. In the “hierarchical authority relationship,” the board is the ultimate authority in matters of account-ability and organizational direction (Carver, 1997; Houle, 1989). In the “partnership model” (Drucker, 1989), governance is exercised via a “team of equals.”

However, many authors argue that these two models are inadequate to explain behav-iours and dynamics driven by power relations that differ according to type of individual, time and circumstances (Golensky, 1993; Heimovics and Herman, 1990; Murray, Bradshaw and

Raymond Morissette (PhD, University of Waterloo, Ontario, Canada) is professor of accounting at HEC Montréal, where he teaches under-graduate and graduate courses in management accounting and auditing.

In the Canadian province of Quebec, tension between the artistic success and the financial health of not-for-profit arts and culture organizations is becoming increasingly apparent. In the past five years, several organiza-tions that have been recognized worldwide for their artistic accomplishments have been struck by financial crises. The authors ask what role governance could play in resolving such crises. In this preliminary investiga-tion, they propose a framework for analysing the strengths and weaknesses of the governance practices employed by not-for-profit organizations in the arts and culture sector. The authors conclude by describing the research strategy that will be implemented in order to launch an empirical investigation based on their framework.

governance, financial crises, conceptual framework

aBSTRaCT

KEYWORDS

INTERNATIONAl JOURNAl OF ARTS MANAgEMENT6

Wolpin, 1992). In the empirical phase of our study, we will attempt to define types of board-staff relationship and examine the impact of each on governance practices.

The Features of an Effective Board

Another branch of the literature is concerned with describing the main features of an effect-ive NPO board. This literature is often quali-fied as mainly normative (Bradshaw, Murray and Wolpin, 1992; Gill 2002; McCambridge, 2004; Miller 2002; Turbide, 2005). A large proportion of it is aimed at using the “trad-itional responsibilities” of boards – that is, the responsibilities entrusted to the boards of com-mercial enterprises – to define the responsibil-ities of NPO boards. Through this process, many authors end up prescribing a set of best practices for NPO boards. Although this best practices approach is vigorously challenged by some (see Ostrower and Stone, 2006), it still dominates the literature.

In terms of board responsibilities, Bertrand (2004) makes a sound contribution by carrying out an in-depth review of the NPO governance literature. Inspired by the references she found (e.g., Carver 1997; Fletcher 1992; Herman and Renz, 1997, 1999a, 1999b; Houle, 1989; Malenfant, 1999), Bertrand provides a good synthesis of the numerous roles that a board should, in theory, play as the NPO’s governing body. She identifies five traditional roles and responsibilities: (1) reviewing the organization’s mission and strategic planning, (2) defining long-term objectives, (3) focusing on external issues to clearly identify threats to the organiza-tion, (4) understanding the needs of the various stakeholders, and (5) assessing the risks facing the organization. Bertrand (2004) agrees with

many other authors that the board should not interfere with the operations of the organization (Carver, 1997; Fletcher, 1992; Wolf, 1984).

In terms of board composition in NPOs, Malenfant (1999) sums up the literature by stating that, once again, there are many differ-ent opinions. The opinion that boards should comprise as many external members as possible seems to be shared by many authors (Drucker, 1989; Houle, 1989; Olson, 2000; Wolf, 1984). Some authors stress the importance of having members with a professional or business back-ground, while others assert that external mem-bers should have a background related to the organization’s mission.

In terms of board size, some advocate large boards (Olson, 2000; Smith and Shen, 1996) while others argue that boards exceeding 10 members quickly become dysfunctional (Houle, 1989; Malenfant, 1999). Ostrower and Stone (2006) point out that not-for-profit boards are often larger than corporate ones. Ostrower (2002) notes that this seems to be particularly true in the arts and culture sector. The main reasons for having a large board are the need for full representation of multiple constituencies and the importance of having big names for fund-raising purposes (Ostrower and Stone, 2006).

Finally, in terms of the optimal length of the tenure for board members, we also found conflicting views. An opinion that seems to be shared by many authors is that overlapping tenure will ensure that the board maintains a degree of coherence over time (Houle, 1989; Olson, 2000; Wolf, 1984).

As part of our empirical investigation, we will document the governance practices adopted by a sample of NPOs and contrast them with the best practices defined in the literature (roles, board composition, size, length of tenure, etc.).

acknowledgementsThis study is funded by the Social Science and Humanities Research Council of Canada and the Chair in Arts Management of HEC Montréal.The authors wish to thank Christine Harel, coordinator of the project at HEC Montréal, and Wendy Reid for commenting on an earlier version of the article.

Dans la province de Québec, il semble qu’il soit difficile de remplir le mandat artistique d’un organisme artistique ou culturel

sans mettre à risque la santé financière de ce dernier. Au cours des cinq dernières années, des organismes à but non lucratif du

secteur des arts et de la culture de toutes tailles ont connu de graves problèmes financiers et ce, malgré une très bonne recon-

naissance artistique. Dans cet article, nous nous interrogeons sur le rôle de la gouvernance dans un tel contexte. De fait, ce

document de recherche constitue le premier volet d’un vaste programme de recherche dans lequel nous souhaitons bâtir un

cadre de gouvernance adapté aux organismes artistiques et culturels, cadre qui pourrait permettre d’évaluer les forces et les

faiblesses des pratiques de gouvernance de ce secteur. Nous terminons l’article en présentant notre stratégie de recherche

empirique définie en trois temps.

gouvernance, crises financières, cadre d’analyse

RéSUMé

MOTS CLéS

VOlUME 10, NUMBER 2 • WINTER 2008 7

En la provincia de Quebec cumplir con el mandato artístico de un ente artístico o cultural parece ser difícil sin poner en peligro la

salud financiera del mismo. En los últimos cinco años las organizaciones sin fines de lucro en el campo de las artes y la cultura

de todo tamaño han experimentado graves problemas financieros, a pesar de gozar de muy buena reputación artística. En el

presente artículo nos interesamos sobre el papel que desempeña la gobernanza en este contexto, de hecho, este documento

investigativo constituye la primera parte de un amplio programa de investigación con el cual deseamos construir un marco de

gobernanza adaptado a las organizaciones artísticas y culturales que permita evaluar las fuerzas y debilidades de las prácticas en

materia de gobernanza de este sector. Terminamos el artículo presentando nuestra estrategia de investigación empírica definida

en tres etapas.

Gobernanza, crisis financieras, marco analítico

rEsumEN

PALABrAs CLAVE

We will also attempt to go beyond the struc-tural aspects (Bradshaw, Murray and Wolpin, 1992) in order to capture some of the less for-mal aspects of governance.

Governance Practices

Our review reveals that many authors tend to prescribe best practices for managers of NPOs and that a significant portion of these practices are borrowed from commercial enterprises (see Tirole, 2001; Denis and McConnell, 2003). However, many authors specializing in NPO management cite important distinctions between business enterprises and NPOs (Speckbacher, 2003; Miller, 2002; Malenfant, 1999). Carver (1997) argues that a very small number of NPOs actually adopt best practices drawn from commercial firms. The fact is that the prescriptions described in the literature do not adapt well to the NPO format (Malenfant, 1999; Miller, 2002; Sawhill and Williamson, 2001; Turbide, 2005). These observations show that it is essential the concept of governance be adapted to the realities of NPOs.

In a recent empirical investigation involv-ing three community NPOs, Bertrand and Turbide (2007) found that governance was driven by spontaneous mechanisms associated with organizational culture, the sharing of val-ues and member commitment. Competition for resources5 and legitimacy were also import-ant characteristics of the boards’ functioning. Traditional roles and responsibilities were less apparent, since the NPOs struggled to cope with the day-to-day reality of cash-flow prob-lems, staff turnover and the difficulties associ-ated with serving ever more constituents.

In our research project, rather than try to improve upon the many best practices that

have been proposed, we attempt to identify which governance practices might meet the needs of arts and culture NPOs. We argue that there are substantial differences between busi-ness enterprises and NPOs in terms of govern-ance. Table 1 summarizes those differences in the arts and culture sector with respect to tak-ing external contingencies into account when adapting governance methods.

Given these differences, we agree with Ostrower and Stone (2006) that NPOs oper-ating in a specific subsector should be exam-ined in context and that the examination should consider “both external and internal contin-gencies” (p. 612). Our preliminary governance framework suggests that an arts and culture NPO should take into account its own charac-teristics and dynamics in terms of external and internal environments and develop governance practices that reflect its own organizational reality.

Our proposed research strategy is aimed at examining the governance practices of arts and culture NPOs. By examining these practices in relation to our preliminary framework, we may be in a better position to evaluate their viability.

Preliminary Framework for Governance of Arts and Culture NPOs

W ith the differences between NPOs and business enterprises in mind, we pro-

pose a preliminary governance framework for arts and culture NPOs. Figure 1 illustrates our adaptation of governance principles to the real-ities of these NPOs. From this perspective, gov-ernance directly and indirectly influences the

INTERNATIONAl JOURNAl OF ARTS MANAgEMENT8

organization’s ability to fulfil its mission and remain financially healthy. The direct rela-tionship between governance mechanisms and financial and organizational health comes mainly from the organization’s awareness of the importance of the governance concept and how this awareness is reflected in its actions.

First, the organization must take into account a number of contingencies in its external environ-ment. Among these, we argue, dimensions such as market competition and competition for funding are crucial for the future of the organ-ization. The same might be said for the pre-vailing socio-economic conditions, the cultural climate and the legal environment. Although managers can have only a modest influence on these external contingencies, systematic mon-itoring should be part of the organization’s governance practices. Through such monitor-ing, leaders of NPOs can quickly be made aware of any change in their environment and can react to threats or opportunities as soon as they arise.

Second, management must have a sense of the nature of the organization’s relations with its stakeholders. Does management believe it can influence an important stakeholder such as a funding agency, or is the relationship hier-archical, with influence being exerted by the board alone? The bidirectional arrow between

the organization and the stakeholders illus-trates that, because the managers of the organ-ization have a two-way relationship with their stakeholders, they can have an influence on the stakeholders.6 In many instances the nature of this relationship will allow the NPO’s leaders to influence the stakeholders, which is particu-larly important in terms of funding agencies. We argue that the ability to appreciate the board’s and the leaders’ influence on the stakeholders is essential to governance.

Third, establishing an efficient and well-oriented board of directors is a concrete way of operationalizing governance. Besides having a board structure that fits the needs of the organ-ization, making sure that the board is func-tional, that board members know what their roles and responsibilities are, and that the board has a good relationship with the organization’s leaders is essential for sound governance prac-tices.

Fourth, the framework underscores the importance of strategic planning. For example, creating a management team committed to a strategic plan that reflects the organization’s mission and that will gain the board’s approval indirectly ties governance to the organization’s financial and organizational health (Siebart, 2005). Such rigour takes the shape of formal strategizing, which includes detailed planning

COMPARISON OF gOVERNANCE IN BUSINESS ENTERPRISES AND IN ARTS AND CUlTURE NPOS

External contingencies Business enterprise arts and culture NPO

Competition in the sector Competes for customers. Competes for customers and funding sources.

Socio-economic environment Its relatively large amount of economic power means that it influences the socio-economic environment in which it operates.

Its relatively small amount of economic power means that it is influenced by its socio-economic environment more than it influences it.

Partners and stakeholders governance is aimed mostly at protecting the interests of shareholders, particularly minority shareholders.

The concept of governance must be adapted to take into account the interests of a larger number of stakeholders, who often have diverging interests.

Cultural environment If it makes an effort to adapt, it can function in a variety of cultural environments.

Can survive only in a relatively rich cultural environment that encourages and values creativity.

legal environment given the economic interests at stake, it must meet formal institutional requirements in order to ensure accountability.

The exercise of accountability is generally less structured.

tablE 1

VOlUME 10, NUMBER 2 • WINTER 2008 9

of the actions needed to implement a strategy and the controls needed to ensure that the organization meets all of its objectives.

Efficient strategic planning calls for the involvement of key actors such as the general

manager and the artistic director. Throughout the planning process, attention must be given to risk evaluation. In that respect, input from the general manager, the artistic director and the board chair is important, because each of

External contingencies that determine the environment in which the organization operates

Governance mechanisms set up by the organization

Strategic planning

Operational planning

The organization’s financial health and fulfilment of its mission

1.Competitionin the sector

5.Legal

environment

3.Stakeholders

Composition ofthe board of directors

Composition ofthe management team

2.Socio-economic

environment

4.Cultural

environment

Control and accountability mechanisms

PRElIMINARY gOVERNANCE FRAMEWORKfigurE 1

INTERNATIONAl JOURNAl OF ARTS MANAgEMENT10

these key actors assesses risk from a different perspective. At the end of the process, approval by the board underlines the fact that although responsibility for strategic planning falls mainly to the organization’s leaders, it should eventu-ally be shared with the board.

Finally, management control systems are connected to sound governance practices. In the arts and culture sector, management con-trol systems need to balance monitoring the artistic mission with ensuring that the organ-ization respects budget constraints. Many lead-ers deplore, rightly or wrongly, the fact that financial matters often take undue precedence over artistic matters in evaluations of the organ-ization’s performance. This opinion is reflected in a variety of studies conducted through interviews, case studies or consultation work for funding agencies (Chiapello, 1991; Schuster, 1997; Turbide, 1997; Turbide and Hoskin, 1999; Voss and Voss, 2000).

In the same vein, Turbide and Laurin (2007) used an in-depth questionnaire to survey the evaluation of performance measures taken by performing arts NPOs in Quebec. Their results indicate that the more managers concentrate on financial aspects (budgets, grant applica-tions, preparation of reports and financial statements), the less they see themselves as cre-ative or as artistically innovative.

Strategy for Investigating Governance Practices in the Arts and Culture Sector

In order to examine the nature of governance practices in the not-for-profit arts and cul-

ture sector, we have launched a five-year research project7 in order to:

– document the governance approach used in the sector

– improve our governance framework– disseminate our findings to arts and cul-

ture stakeholders with the aim of balancing artistic and financial concerns in a preventive way

To do this, we have designed a three-phase project based on the preliminary framework illustrated in Figure 1.

Phase 1: Diagnosis

In the first phase, we will document govern-ance practices in arts and culture NPOs using our preliminary framework. We will address three questions: 1. How do organizations incor-porate uncontrollable variables of external con-tingencies into their governance practices? 2. Once the external contingencies have been identified and analysed, how are they taken into account, and what governance mechanisms do organiza-tions use to manage the trade-offs amongst their various stakeholder concerns? 3. What tools are put in place by the management of these organ-izations to ensure monitoring, accountability and performance measurement?

The preliminary framework developed at this point will enable us to draw up an inven-tory of the strengths and weaknesses of the governance approach used by arts and culture NPOs in Quebec.8 The research will also reveal to us how threats and opportunities arising in the external environment of an organization are taken into account. The results of this inquiry will enable us to formulate a compre-hensive description of the context in order to identify governance issues specific to certain subgroups of organizations.9 They will also enable us to better understand the bidirec-tional relationship between funding agencies and the organization’s leaders. For example, we will examine how changes to the financing methods of funding agencies affect the man-agement of organizations and, in turn, how the leaders exert an influence over the agencies.

During the first phase we will be relying primarily on semi-structured and structured interviews, as well as observations in meetings, to describe in detail the governance practices of arts and culture NPOs. After pretesting the data-collection instruments, we will begin data collection with a sample of arts and culture NPOs in Quebec. The sample will be repre-sentative in terms of both the size of organiza-tions and the subsectors in which they operate. It will include organizations located in both urban and rural areas. Throughout the inquiry, members of the research team will meet in workshops at regular intervals to assess the work completed and to determine the need for any procedural adjustments.

VOlUME 10, NUMBER 2 • WINTER 2008 11

Phase 2: Consultation

Once the diagnostic exercise is complete, we will undertake the second phase of the project, aimed at enriching the preliminary framework illustrated in Figure 1.10 In this phase, we will hold discussions and forums with members of the arts and culture community on the issues identified in the first phase, with the objective of developing a body of knowledge on man-agement and governance issues specific to the arts and culture sector. During the second phase we will adapt governance paradigm principles that seem to respond primarily to the concerns of business enterprises and will also transform the paradigm so that it also meets the needs of arts and culture NPOs in Quebec.

The various members of the cultural com-munity who are confronted with serious finan-cial and organizational problems too often find themselves engaged in a fruitless dialogue with funding agencies. On the one hand, managers deplore the lack of increases in their operating grants despite a steady rise in the cost of living and in their fixed expenses (rent, heating, sal-aries, communication). On the other hand, funding agencies, no longer receiving increases in their budget envelopes, claim to be distrib-uting as much if not more financial assistance, through more generous programs.

We believe that bridges between arts and culture organizations and funding agencies can be rebuilt by bringing everyone to the same table. In fact, it is our understanding that fund-ing agencies and arts and culture managers are equally concerned about the vitality of the cul-tural sector and that they share a belief that balancing the artistic mission and the financial health of an organization is a crucial issue.

To achieve this balance, the entire cultural sector must rally together to rethink govern-ance mechanisms. At the moment, organizations are having difficulty adapting their management practices to the evolving needs of their stake-holders. At the same time, funding agencies are having difficulty assessing the impact of the changes they are imposing on the manage-ment of arts and culture NPOs. At the end of the first phase we should be able to propose a set of comprehensive governance principles aimed at improving the internal control mech-anisms (description of tasks and responsibilities,

succession plan, budget monitoring, project follow-up) and external control mechanisms (grant reports, financial statements, activity reports) used by arts and culture NPOs.

Phase 3: Diffusion

The purpose of the third phase is to disseminate our findings to all arts and culture organizations in Quebec. We hope to take full advantage of our alliances with this community to dissemin-ate the results of our work following each phase. We will use a variety of communica-tions methods: publication of business and academic research articles, case studies, pro-posals for new courses specializing in cultural management11 and development of a Web site to document the progress of the project. In the fourth year we will set up online access to a Reference and Assistance Centre for Financial and Organizational Health, which will include the set of comprehensive governance principles developed in the first and second phases. With the assistance of our partners and their networks, we will promote and regularly update the site.

Conclusion

W e hope that the spin-offs from this pro-ject will be significant on both the cul-

tural and the economic front. For managers and other stakeholders in the field of arts and culture, the results could enable them to man-age artistic and financial matters in a more bal-anced manner. For the many partners (boards of directors, governments, foundations, cor-porations), the project will also foster proactive exchange, feedback and better alignment of expectations between the funded and the fund-ers, promoting sound financial and organiza-tional growth. Ideally, the research project that we have outlined will enable us to develop a set of governance principles useful for guiding financial and organizational decisions.

Notes1. The wide array of internal and external partners involved with organizations.

2. A five-year research project funded by the Social Sciences and Humanities Research Council of Canada in the amount of $978,000 through the Community-University Research Alli-

INTERNATIONAl JOURNAl OF ARTS MANAgEMENT12

ances (CURA) program. The CURA program promotes research and social innovation by funding partnerships between univer-sities and local communities, helping them to work together towards the social, cultural and economic development of com-munities (www.sshrc.ca/web).

3. For the purposes of this article, we adopt a broad definition of stakeholder. Following Atkinson, Waterhouse and Wells (1997), we define a stakeholder as “an individual or group, inside or outside the [organization], that has a stake in or can influence the organization’s performance.” According to this definition, a funder is an important stakeholder of an arts and culture NPO but is not the only important one.

4. The board of directors ranked second on the scale of stake-holders to whom the leaders felt accountable.

5. Bertrand and Turbide (2007) report that competition for resources is a key issue for NPOs. In the cases that they ana-lysed, board members were very much involved in trying to secure more human resources (such as volunteers) or financial resources (sponsors or donors).

6. Because some organizations can influence funding agencies, the nature of the relationship between the organization and the agency is sometimes perceived as more of a partnership. In any case, it is crucial for any not-for-profit organization to appreci-ate the nature of its relationship with funding agencies. Although some forms of partnership are inevitable, managers must not lose sight of the fact that they are accountable mainly to funding agencies.

7. The five-year research project (see note 3) will be conducted in the province of Quebec. It includes 11 co-researchers, of whom seven are arts managers or financial partners of arts organizations. More importantly, the project has enrolled 30 partners. These come from not-for-profit arts organizations, associations and funding bodies. The research team will be involved in all phases of the project in order to validate and optimize the findings.

8. The investigation will be conducted first in the province of Quebec and then extended to include NPOs in other Canadian provinces.

9. Subgroups will be divided based on characteristics such as the size of the organization and the subsector in which it operates.

10. It is during this second phase that researchers and partners in the field will work together to create a model that is as rich and complete as possible for the governance of art and culture NPOs.

11. HEC Montréal has offered a graduate program since 1998. The University of Waterloo offers a similar program.

ReferencesAtkinson, A.A., J.H. Waterhouse and R.B. Wells.

1997. “A Stakeholder Approach to Strategic Perform-ance Measurement.” Sloan Management Review, Vol. 38, no 3, p. 25–37.

Bertrand, C. 2004. La gouvernance dans les organismes à but non lucratif : trois études de cas. Master’s thesis, HEC Montréal.

Bertrand, C., and J. Turbide. 2007. “Boards in Small NPOs: What about Friendship and Solidarity?” Nonprofit Quarterly, Vol. 14, no 2, p. 16–23.

Bradshaw, P., V. Murray and J. Wolpin. 1992. “Do Nonprofit Boards Make a Difference? An Explora-tion of the Relationship among Board Structure, Process and Effectiveness.” Nonprofit and Volun-tary Sector Quarterly, Vol. 21, no 3, p. 227–249.

Bushman, R.M., and A.J. Smith. 2001. “Financial Accounting Information and Corporate Govern-ance.” Journal of Accounting and Economics, Vol. 32, p. 237–333.

Carver, J. 1997. Boards That Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations (2nd ed.). San Francisco: Jossey-Bass.

Chiapello, E. 1991. Accounting and Control in Arts Organizations. Paper presented at Research Seminar, Accounting and Finance Department, London School of Economics.

Denis, D.K., and J.J. McConnell. 2003. “Inter-national Corporate Governance.” Journal of Finan-cial and Quantitative Analysis, Vol. 38, no 1, p. 1–36.

DiMaggio, P., and M. Useem. 1978. “Cultural Dem-ocracy in a Period of Cultural Expansion: The Social Composition of Arts Audiences in the United States.” Social Problems, Vol. 25, p. 179–197.

Drucker, P.F. 1989. “What Business Can Learn from Nonprofits.” Harvard Business Review, Vol. 67, no 4, p. 88–93.

Fletcher, K.B. 1992. “Effective Boards: How Execu-tive Directors Define and Develop Them.” Non-profit Management and Leadership, Vol. 2, no 3, p. 283–293.

Gill, M. 2002. “Building Effective Approaches to Governance.” Nonprofit Quarterly, Vol. 9, no 2, p. 46–49. Available online: http://www.nonprofit quarterly.org/.

Golensky, M. 1993. “The Board-Executive Relation-ship in Nonprofit Organizations: Partnership or Power Struggle?” Nonprofit Management and Leader-ship, Vol.4, no 2, p. 177–191.

Hafsi, T., F. Séguin and J.-M. Toulouse. 2000. La stratégie des organisations : une synthèse. Montreal: Éditions Transcontinentales.

Heimovics, R., and R.D. Herman. 1990. “Respon-sibility for Critical Events in Nonprofit Organiz-ations.” Nonprofit and Voluntary Sector Quarterly, Vol. 19, no 1, p. 59–85.

Herman, R.D., and D.O. Renz. 1997. “Multiple Constituencies and the Social Construction of Nonprofit Organization Effectiveness.” Nonprofit Voluntary Sector Quarterly, Vol.26, no 6, p. 185–206.

Herman, R.D., and D.O. Renz. 1999a. “Board Prac-tices of Especially Effective and Less Effective Local Nonprofit Organizations.” American Review of Public Administration, Vol. 30, p. 146–160.

Herman, R.D., and D.O. Renz. 1999b. “Thesis on Nonprofit Organizational Effectiveness.” Nonprofit Voluntary Sector Quarterly, Vol. 28, no 6, p. 107–126.

Houle, C.O. 1989. Governing Boards: Their Nature and Nurture. San Francisco: Jossey-Bass.

La Porta, R., F. Lopez-de-Silanes, A. Shleifer and R. Vishny. 2000. “Investor Protection and Corpor-ate Governance.” Journal of Financial Economics, Vol. 58, no 1, p. 3–27.

Malenfant, R. 1999. La gouvernance stratégique d’un organisme sans but lucratif : sa dynamique, ses compo-santes. Montreal: Éditions D.P.R.M.

VOlUME 10, NUMBER 2 • WINTER 2008 13

McCambridge, R. 2004. “Underestimating the Power of Nonprofit Governance.” Nonprofit and Voluntary Sector Quarterly, Vol. 33, no 2, p. 346–354.

Miller, J.L. 2002. “The Board as a Monitor of Organ-izational Activity: The Applicability of Agency Theory to Nonprofit Boards.” Nonprofit Manage-ment and Leadership, Vol. 12, no 4, p. 429–450.

Mordaunt, J., and C. Cornforth. 2004. “The Role of Boards in the Failure and Turnaround of Non-profit Organizations. Public Money and Management, Vol. 24, no 4, p. 227–234.

Murray, V., V.P. Bradshaw and J. Wolpin. 1992. “Power in and around Nonprofit Boards: A Neglected Dimension of Governance.” Nonprofit Management and Leadership, Vol. 3, no 2, p. 165–182.

Olson, D.E. 2000. “Agency Theory in the Not-for-Profit Sector: Its Role at Independent Colleges.” Nonprofit and Voluntary Sector Quarterly, Vol. 29, no 2, p. 280–296.

Ostrower, F. 2002. Trustees of Culture: Power, Wealth, and Status on Elite Arts Boards. Chicago: University of Chicago Press.

Ostrower, F., and M.M. Stone. 2006. “Governance: Research Trends, Gaps, and Future Prospects.” In The Non-profit Sector: A Research Handbook (2nd ed.), W.W. Power and R. Steinberg, eds. New Haven, CT, and London: Yale University Press, p. 612–628.

Sawhill, J., and D. Williamson. 2001. “Mission Impossible? Measuring Success in Nonprofit Organ-izations.” Nonprofit Management and Leadership, Vol. 11, no 3, p. 371–386.

Schuster, J.M. 1997. “The Performance of Perform-ance Indicators in the Arts.” Nonprofit Management and Leadership, Vol. 7, no 3, p.253–269.

Shleifer, A., and R.W. Vishny. 1997. “A Survey of Corporate Governance.” Journal of Finance, June, p. 737–781.

Siebart, P. 2005. “Corporate Governance of Non-profit Organizations: Cooperation and Control.” International Journal of Public Administration, Vol. 28, no 9/10, p. 857–867.

Smith, D.H., and C. Shen. 1996. “Factors Charac-terizing the Most Effective Nonprofits Managed by Volunteers.” Nonprofit Management and Leader-ship, Vol. 6, no 3, p. 271–289.

Speckbacher, G. 2003. “The Economics of Perform-ance Management in Nonprofit Organizations.” Nonprofit Management and Leadership, Vol. 13, no 3, p. 267–279.

Tirole, J. 2001. “Corporate Governance.” Economet-rica, Econometric Society, Vol. 69, no 1, p. 1–35.

Turbide, J. 1997. Management Accounting Systems and the Exercise of Interpersonal Power in Organizations: Observations from an Accounting Free Zone – The Case of Not-for-Profit Performing Arts Organizations. Doctoral dissertation, University of Warwick, UK.

Turbide, J. 2005. “La gouvernance dans les organis-mes à but non lucratif : mieux comprendre la pra-tique avant de réglementer.” Revue Gestion, March, p. 55–61.

Turbide, J., and K. Hoskin. 1999. “Managing Non-profit Arts Organizations through Management Accounting Systems: Mission Possible?” International Journal of Arts Management, Vol. 1, no 2, p. 68–81.

Turbide, J., and C. Laurin. 2007. Performance Meas-urement in the Arts Sector: The Case of Performing Arts. Working paper.

Voss, Z.G., and G.B. Voss. 2000. “Exploring the Impact of Organizational Values and Strategic Orientation on Performance in Not-for-Profit Professional Theatre.” International Journal of Arts Management, Vol. 3, no1, p. 62–76.

Wolf, T. 1984. The Nonprofit Organization: An Oper-ational Manual. New York: Prentice Hall.

Youssofzai, F. 2000. “La gestion stratégique des orga-nisations-non-productrices-de-profits, Nonprofit Organizations : une revue de littérature théorique sur les NPO.” Cahier no 005 du CRISES, February.

Zolberg, V. 1981. “Conflicting Visions in American Art Museums.” Theory and Society, Vol. 10, p. 81–102.