The Wordsworth Trust: an MMM3 case study

www.missionmodelsmoney.org.uk

The Wordsworth Trust
a Governance Case Study for

Mission, Models, Money
Catalysing a more sustainable arts and cultural sector Case study focus: GOVERNANCE IN A TIME OF TRANSITION The Wordsworth Trust was one of several arts and cultural organisations to receive ACE stabilisation funding. A commitment to developing governance was a requirement of the funding agreement. This case study outlines how the board responded to financial crisis and succession issues brought about by the unexpected death of their much respected, long serving Director Robert Woof. MMM would like to thank Charles Waddington, Operational Director - Wordsworth Trust, Lord Smith of Finsbury, Chair – Wordsworth Trust, and Sara Robinson, freelance arts consultant, for their work in producing this case study.

Background information: Mission Structure Age Turnover Centre for British Romanticism and the home of William Wordsworth. Registered charity / Company limited by guarantee 115 years (founded in 1891) Revenue Income £1.2 million (40% earned income / 60% funded income) Endowment Fund Income £120,000 (the fund currently stands at £2million built up over 5 years) Capital Funding £520,000 46 (including 10 volunteers) Chair plus 13 trustees who are aged from 37 to 78 There are 2 women, 11 men, and all are of white UK origin Length of service ranges from 1 to 10 years. Skills include legal, fundraising and finance (x3), governance and administration, museum/heritage, education (x4), historic building, academia (x 7). 4 board meetings annually; two in Grasmere, two in London. At the Grasmere meetings, the board meetings and strategic discussions are given an entire weekend, aspects of which involve the senior staff. 4 x subcommittees: Collections (acquisition strategy, policies, museum related matters), Finance (open to all trustees, operates an additional 'Investment Committee' to look specifically at the endowment fund), Nominations (succession planning, appointments and dismissals) and Estates (own 26 properties, meets twice yearly and more frequently on an ad hoc basis).

Staff Wordsworth Trust board: the headlines

The Wordsworth Trust: an MMM3 case study

www.missionmodelsmoney.org.uk

Positioning: In 1995/96 the Wordsworth Trust hit a financial crisis due to the protracted illness of the Director who was the principal fundraiser. Whilst this was overcome in late 1996/early 1997, the Trust’s financial planning processes were generally weak and it also faced the prospect of a major capital project which required substantially more funding than it had managed to raise. The Trust's long serving CEO Robert Woof was exceptionally respected for his vision and development of the centre, but was less experienced at financial planning. Stepping out of a financial crisis and into stabilisation It became clear that increased financial skill and scrutiny was required within the staff and board teams. Charles Waddington (a former partner in KPMG, who had previously worked on the Trust's auditing procedures) was asked to become Operational Director in order to establish financial credibility for the centre. He agreed, on the understanding that he would have direct access to the Trustees whilst sharing financial decisions with the overall Director. Charles had the respect and trust of the Director so this worked well and enabled the financial developments to happen swiftly and with full co-operation of the board, Director and management team. New controls and forecasting systems were developed and the board began to receive full quarterly management accounts with short and long term projections, helping them make informed, effective decisions about the future. The executive and board then agreed to enter into a stabilisation programme with Arts Council England, and employed AEA consultants to work alongside Robert and Charles in the production of a business plan. Following this, a capital stabilisation grant was made, a private foundation gave a threeyear revenue funding commitment to facilitate change and substantial capital funding was awarded by HLF towards the capital project (The Jerwood Centre). The stabilisation process revealed a number of other areas requiring change, particularly in the light of the major capital build and its additional costs, ongoing revenue requirements and new objectives. The advisors appointed under the stabilisation process suggested that the board shrank in size from over 20 to a maximum of 15 trustees in order to become: a) more effective at decision making processes, b) more active and c) more composite of the new skills required to take the Trust into its next phase. The long serving Chair (a descendent of Wordsworth), moved into the position of President and Chris Smith was asked to take up the reins of Chair. The smaller board was comprised of people with specific skills reflecting the core needs of the trust; i.e. a former finance director of a leading bank, high profile individuals with strong funding and political networks, academics, investment banker, conservation and property specialists and so on. They are also passionately committed to the work of Wordsworth and therefore the organisational aims. Outgoing Trustees were properly, publicly thanked and awarded Fellowships in recognition of their service. Crucially, these changes were handled by the board’s Nominations committee. It was felt important to have effective mechanisms in place to enable these changes to occur following due process and in a sensitive, non-personal way; seemingly, no-one left 'under a cloud' and the transition was handled without disruption to the organisation. The next identified area to tackle was the funding. The board strengthened and expanded the Development team with a remit to set up an endowment fund, generate new funding streams and establish multi-year funding agreements with existing and new funders. In addition, the Development team greatly enhanced the revenue fundraising capability of the Trust. In becoming more adept at long term strategy, the board also recognised the need for succession planning within the staff. The centre's biggest asset was its Director, who for almost 30 years (first as

The Wordsworth Trust: an MMM3 case study

www.missionmodelsmoney.org.uk

Trustee, then as Director), had developed the organisation with vision and integrity, gaining huge respect from many people and stakeholders. However there was a growing awareness that the board needed to be prepared when he decided to retire, or if he became ill. Though he had no immediate plans to leave, Robert understood this requirement and developed his own job description to give the board a better idea of what his position involved. The Nominations committee then drew up a proposal for succession planning should the need arise. Sadly, soon afterwards in May 2005, Robert was diagnosed with lung cancer. Dealing with unexpected tragedy Robert and the Trustees made the decision to inform the staff that he would be undergoing chemotherapy and would stay in post until he felt unable to continue. He remained committed to his work throughout this process until it became clear the chemotherapy was not working and he went into hospital for the last time. He continued to contribute to the Trust until a day or two before his death. Robert died in November 2005. The board immediately asked Charles (Operations Director) to become interim Director. Charles recognised his main responsibility as enabling the organisation to 'grieve' whilst continuing to open seven days a week and operate normally. With the support of his board he did two things: Firstly, he made the heads of departments report directly to the Trustee meetings. This was the first time such a procedure had been introduced and it was so successful it remains today. It enabled senior staff to develop stronger relationships with the board to whom they could then turn for specific advice and it gave the board a greater, more direct insight into the different aspects of the trust's operations. Secondly, he stepped up the number of operational meetings in order to 'hold the team together' during this difficult time. What did the board do? They put in place an interim director and appointed a head hunter. They oversaw the appointment process which took 6 months, giving staff and Trustees space to accept the loss of Robert. Board members living in close proximity were particularly able to offer emotional and practical support to the staff. Given the legacy left by Robert and the immense respect he commanded, the Board agreed and articulated that they could not replace like with like; the new Director would be different, bringing new skills to the table whilst building on their predecessor's remarkable achievements. The outcome of a rigorous recruitment process was the appointment of former trustee, David Wilson (with clearance from the Charity Commission regarding his transition from Trustee to Director) and he began in May 2006. Outcomes: o significant transition at board level took place without disruption to the organisation; o a smaller, stronger, skilled and well informed board more adept at forward planning and articulating vision; o clearer financial systems and a more financially robust organisation; o greater communication between the board and senior management team; o a staff and board team able to deal sensitively with unexpected tragedy. Key learning points: • the formation of a business plan helped the Trust assess its strengths and weaknesses; • recurring financial crisis and an impending building project were the catalyst for change, leading to the development of better financial procedures, funding objectives and board reporting mechanisms in order to create a more stable and secure long-term funding environment; only then was the organisation able to turn its attention to issues of governance and succession planning; • developing trust and relationships amongst staff and board members enabled the organisation to deal with change collectively; • by engaging trustees who are both passionately committed to the organisation and clear about the specific skills they bring to the table has resulted in a valued and active board; senior staff

The Wordsworth Trust: an MMM3 case study

www.missionmodelsmoney.org.uk

are keen to point out that the two locally based Trustees are particularly appreciated because they are visible on a frequent basis; having a Nominations comm. with clear procedures facilitated effective succession planning.

Further resources: www.wordsworth.org.uk Advice on developing robust financial processes and board reporting templates www.missionmodelsmoney.org.uk > Learn > Other relevant Links > 'Learning from the Community: Effective Financial Management Practices in the Arts' http://www.ncvo-vol.org.uk/fm/index.asp Advice on the role of a Trustee recruitment and nominating committee http://www.ncvo-vol.org.uk/askncvo/trustee/index.asp?id=2753 Recruiting a Chief Executive: A Guide for Trustees and Chairs http://www.ncvo-vol.org.uk/publications/publication.asp?id=1461

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