How to sit on a third-sector board | In conversation with Sir Paul Ruddock, former Chair of V&A and Susan Boster, CEO of Boster Group

Sir Paul is Chairman of Oxford University Endowment Management Limited and Chair of the Oxford University Investment Committee, a Trustee of the Metropolitan Museum of Art, New York and Co-Chair of the International Council, a Trustee of The British Museum, a Fellow of the Society of Antiquaries, Bancroft Fellow of Mansfield College, Oxford University, a member of The Bard Graduate Center Executive Planning Committee, a member of the Bard Graduate Center Board, a member of the Getty International Council and an Ambassador for AfriKids.

Sir Paul is the former Chairman of the Victoria and Albert Museum having served two terms. His second term ended September 2015.

Why did you choose to join the board of a cultural organisation in the first place?

It was serendipity. I'd been supporting the V&A as a patron, and while I was sitting next to the then-Chair, Paula Ridley, at a dinner she just said, “You'd make a great trustee, would you like to join?” It was a weird time; there was no interview [or formal application] process, so they just said, “Oh, Paul looks okay,” and so I was appointed to the V&A in May 2002. I had served on one of their fundraising boards before then. Immediately [after I was appointed] I chaired the Development and Finance committees; I also chaired Collections for a while.

I hadn't even thought about applying to be Chair in 2007, because I was so busy with my business. Both the outgoing Chair and then-Director Mark Jones asked if I was applying; I thought about it, spoke to my [business] partners, and applied - and then I didn't get appointed! They appointed John Tusa, but he had a conflict of interest (because he was also Chair of the University of the Arts), so he recused himself and DCMS asked if I would, in fact, be the Chair. It was a bit of an odd series of events. I ended up serving as a Trustee for 13 years and Chair for 8.

As someone who sits on prominent boards in both the UK and the US, what are the principal differences between third sector boards in both countries?

The primary difference between the US and the UK boards I'm on is that in the UK, Trustees are appointed based on skillset [for Government-funded Museums]. On the British Museum’s board, we've got archaeologists, academics, businesspeople, writers; at the V&A I had Sir David Adjaye, Tom Dixon, Edmund De Waal, people from the fashion industry, etc.

For big arts institutions in the U.S., the boards are primarily donor boards. Now, most of those people are very successful and have a lot to add [in terms of skillset]; the Vice Chairman of Blackstone is on the board of the Met, along with other people who run big financial institutions, senior real estate people, and Mayoral appointees. But the main difference is that [U.S.] boards are there to give money and raise money. There are three types of trustees in a US organisation: Elected Trustees, Honorary Trustees (which normally means you wrote a big check), and Emeritus Trustees.

In the UK, that’s a bit problematic. I always read my job as being to raise money for the institutions [I serve]. A lot of trustees, however, are financially in a position to give meaningfully, but don't think it's their role. They're giving their time for free, so they don't necessarily view it as their role to raise money. I think that is changing, but that is a major difference.

The other difference is that in the U.S., you don't really have term limits. I'm coming to my third five-year term at the Met, and I become an Emeritus Trustee when I’m 75. I'm 62. I will have been on the board 20-something years by the time I get there.

I think there are pros and cons [to both systems]. When Jeremy Hunt was the Culture Secretary, he wanted to move more towards a philanthropic model, which I think was very admirable. I think in this country, a lot of philanthropists have not been very generous in the arts. [If you look at the donors of] the British Museum, the National Gallery, the Tate, the V&A, the Opera House, etc., the same 50 or 100 names crop up - and in terms of the biggest giving, it’s the same 10. You don't have the breadth of giving that you have in the US. The flip side is that when you're completely donor-driven, like US institutions, and you go through a pandemic, you are really struggling. US arts institutions are much more vulnerable to economic downturns, despite our endowments.

At the Met, we've got a $4 billion dollar endowment, and we're doing what we can [to use it], but a lot of the endowment has very tight legal restrictions on how it can be used. If you start eating into your endowment meaningfully, it absolutely does mortgage your future. 10 years ago, I helped Jeremy Hunt put together the Catalyst scheme, where the Heritage Lottery Fund [HLF] put up £100 million for museums on a matching basis to help kickstart endowments. The V&A was the only large institution that was successful in its bid. It is very hard raising money for endowments. Donors would rather put it towards capital projects, scholarships, or what have you. It's very rare that somebody says, “I want to give you £5 million for an endowment.” The advantage of an endowment is that it then throws off income. At Oxford, our endowment throws off a dividend, typically, of 4% (or around £180 million) a year towards funding the colleges and universities. So, building up these endowments is incredibly important, but it takes a long, long time. The Met has been doing it for 150 years, and Oxford’s been doing it for about 800 years.

There was definitely a view in the Treasury [10 years ago] that if you had significant excess reserves, you would use your reserves if times got tough - and also, if you have those reserves, why [should the Treasury] give you money? I think that has changed, and that there is an understanding now that building significant reserves is actually good for the long-term health of institution, though it is still the case that the endowments of British cultural institutions are tiny compared to those in America.

How does governance vary between US and UK third-sector boards?

I think in many respects, operating governance is very similar. At the Met, we've got audit committees, legal committees, revenue committees, membership committees, acquisitions committees, etc. the same way you have in British institutions. The difference in the UK, of course, is that [certain institutions] also report to Government - so you effectively have DCMS and/or Arts Council, the Treasury and the National Audit Office overseeing everything. There's an extra level of supervision, compared to a US institution.

How can a board most effectively support a cultural organization to navigate disruptions ranging from COVID to streaming over the next 10 years?

I think that boards bring a lot of expertise. I don't think you can underestimate the expertise that these big institutions have - take the British Museum. We have some of the country’s top academics, like Mary Beard, to help moderate the discussion around issues like Black Lives Matter. We've got people like me, Lord James Sassoon and Sir Deryck Maughan, who have advanced financial skillsets. We have people from the arts, like Muriel Gray, and Grayson Perry. We have people who run businesses (which I think is very important, because running any cultural institution is like running a business), and then we have people like Dame Vivian Hunt who are looking at the future. So, I think the expertise that we bring is very important. Trustees also bring their contacts; digital technology is very complicated, and nobody really gets it right, but we can bring in our contacts at Google and Bloomberg, for example, to help.

I interviewed people for many years to go on the V&A board, and a lot of applicants were successful in their [private sector] career and upon retirement say they want to flesh out their portfolio of directorships. That is immediately an absolute “No.” You want people that have an enthusiasm for whatever it is [that the institution does]. I think that some people don't quite understand what the role is or the time commitment. The role is there to be a sounding board, give advice, etc., and if you're active, it's not four board meetings a year - when I joined the V&A, it was 10 board meetings a year! It's also all the committee meetings, and other stuff… There's a lot of work involved.

You currently serve as the chair of the board of the Oxford University Investment Committee. What are the specific challenges and learnings of being involved in an academic institution, compared with the cultural one?

My role at Oxford is twofold: I chair the board of the management company, which is like chairing any other financial institution; and I chair the Investment Committee. The Investment Committee always has the Senior Proctor, and that role rotates; you may have someone who knows nothing about finance. Where it is interesting is looking at how we respond to environmental, social and governance issues. The university has passed various resolutions about this. For a long time, we've not been able to invest in arms, munitions, tobacco, thermal coal, tar sands, etc., and now we can't invest in any fossil fuels. More than that, though, how we engage with the managers we allocate money to [is changing]. We've just set up a new subcommittee that is responsible for this oversight. As part of this process, we were in talks with academics in Oxford Martin School - who are world leaders on climate change - so there was input of a different type than you might have in a normal financial institution. Any university, of course, has students and academics pushing [for certain policies], and there's a process to go through before things get mandated. Yet, it's very different from being in a purely commercial organisation which, at least until recently, would be purely profit-motivated.

How does your experience as the co-Founder and Chief Executive of Lansdowne Partners inform the way you advise and lead the organisations you now serve?

When you run your own business, you do everything - and in finance, that's complicated. I think the main thing about running your own business is that you have to drive it hard; you've got to be quick, you've got to be out there, and you've got to have a clear story. Running your own business makes you very clear on your USP, and I think that is very useful for fundraising. I think U.K. arts institutions, with a few exceptions, don't quite understand how to raise money.

I was at a function 20-odd years ago and a rather grand speaker stood up and said, “It is your duty to give money to this” and we’re all thinking, “Give me a break.” It's nobody's duty. You’ve got to excite people; it’s a courtship, not a quick sale. You've got to embrace people, and when you think they're ready you can ask them - but it's got to be something they care about. Fundraising, I think, is something that the average academic or curator has no experience of whatsoever. A lot of people think people give lots of money because they want their name on the wall. I haven't met anybody who is going to write a check for several million pounds to get their name on the wall. That's the least of it; that's just a thank you to those people for what they've done.

How do your organisations’ boards work to achieve diversity, equity and inclusion goals?

At the British Museum we have a very diverse board - we're about 50/50 male/female and we have good representation of people of different ethnic backgrounds. It's harder in other areas. The Oxford Investment Committee has a few women, a few people with different ethnic backgrounds, but first and foremost you want people that have the calibre to be on a board at that level. So sometimes, we're pushing hard; it is not always easy to fill the specific roles that you want as quickly as you'd like. That’s what Nurole is good at.

When have you gotten it wrong, and what did you learn?

In around 2010, Mark Jones and I decided that we wanted to have some younger people on the board [of the V&A]. We brought on about four or five people, and they had a variety of issues. One was time. If you want to be on a senior board like the British Museum, the Met or the V&A, you need to have the time. Often when you're younger, even if you're very successful, you don't control your own time - which meant that many times, it was hard for them to be reliable. The second issue was that they didn’t necessarily have the experience to work with a group of diversified individuals. It's quite useful to have young people in board committees, but those younger people found it harder to be trustees. On committees, they don’t have the same time pressures, but they can give their input. That's what we ended up doing.

Susan Boster is the Founder and CEO of Boster Group Ltd., a strategic marketing consultancy that creates innovative and sustainable brand partnerships for corporations, foundations, cultural institutions and artists to achieve revenue, marketing and social impact goals. Distinctly, Boster Group measures return on investment for clients and is focused on the impact of its creative campaigns; extensive, senior-level networks allow Boster Group to help its clients to navigate the complexities of multiple sectors and to broker strategic and sustainable partnerships at the right level. Clients have included Goldman Sachs, Disney, Moët Hennessy, Gap Inc., Bacardi, EY, American Express, Montblanc, and Insight Investment. Previously a CMO for News International, Susan currently sits on the boards of the Donmar Warehouse and The Representation Project, and serves on the Enterprise Committee at The Design Museum. Susan also served two terms as Vice Chairman of the Board of the English National Ballet.

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