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August 7, 2015IM -
by Steve Mosher, Associate Director, Symphonic Services AFM Canada, and Bernard LeBlanc, Director, Symphonic Services AFM Canada
A quick look at the 2014 OCSM Wage Chart indicates that 17 of 20 Organization of Canadian Symphony Musicians (OCSM/OMOSC) orchestras have at least one representative to their boards of directors. One orchestra has four representatives, and six orchestras have full voting responsibilities. The time that we’ve spent on this topic is reminiscent of the discussions we’ve had about whether musicians and other workers in the arts in Canada should be considered employees or self-employed. While there’s still no definitive ruling on the employee versus self-employed question, there is news on the matter of musicians on boards of directors.
The point here is not to argue the pros and cons of musician involvement with our boards. There are several articles in the archives of the AFM, the player conferences, and the Symphony Orchestra Institute that deal with this issue. The discussion was rekindled in November 2013, when Orchestras Canada received an opinion letter from a law firm regarding the remuneration of directors, with reference to changes in the Canada Not-for-profit Corporations Act. There are a few such opinions available on the web at sites like Canadian Charity Law. The Ontario Ministry of the Attorney General website offers the following:
“Generally a charity cannot pay a director to act in the capacity of a director. Also, a director cannot be paid for services provided in any other capacity, unless permitted by a court order. In appropriate circumstances, payment for services other than as a director may be allowed by court order or by an order made under section 13 of the Charities Accounting Act, where it is in the charity’s best interest to do so.”
(NOTE: Registered charities are often referred to as not-for-profit organizations. However, while both types of organizations operate on a not-for-profit basis, they are defined differently under the Income Tax Act. The terms “charity” and “not-for-profit” are interchangeable for the purposes of this article, since the same rules apply to both.)
The Ontario Ministry of the Attorney General further addresses the duty to avoid conflict of interest: “Directors and trustees should avoid conflicts of interest. A conflict of interest arises when a director or trustee has a personal interest in the result of a decision made by the charity.” Katherine Carleton of Orchestras Canada shared their opinion letter with the delegates at the 2014 OCSM/OMOSC Conference and it gets more to the point, “In general, if an orchestra is a charity, then any musicians who are paid directly or indirectly by an orchestra cannot sit on the board of that orchestra as a director, regardless of whether the board seat is voting or nonvoting.”
There are always wrinkles to legislation, and there is no absolute rule that covers every situation. The Canada Not-for-Profit Corporations Act applies in provinces that follow common law. A provincial court can state that a common law rule does not apply in that province. In the case of Quebec, there appears to be no restriction on board participation by employees in not-for-profit organizations, since it is the only province in Canada that follows civil law, not common law. There is one orchestra in Quebec that has taken over its board, installing musicians. They feel that this is the only way to keep the orchestra afloat and it seems to be working, at least in the short term.
But Michel Nadeau, general director of The Institute of Governance of Private and Public Organizations (IGOPP) in Montreal, is clear: musicians should not be members of boards of directors, no matter as voting member or not. He explains that decisions taken by all board members are for the long-term viability and well-being of the organization; these decisions might be against musicians’ interests and would put the musician in a difficult position facing his peers. He adds that annual activity reports from the executive director or the board to the musicians should be a priority of management to maintain good working relations and should be sufficient information from the board.
The Toronto Symphony Orchestra deals with musician representation in Article 27.7 of their collective agreement, as follows: “On an annual basis, two members of the orchestra shall be selected by the Orchestra Committee, with the approval of the members of the orchestra, to attend regular meetings of the board of directors, as permitted by the board of directors. To be clear, orchestra members are not members of the board of directors and, as such, do not have any voting or decision-making power.”
For Canadian orchestras, musician participation on boards of directors needs to end. We want to ensure that our orchestras comply with the Canada Not-for-Profit Corporations Act. At various times in the past, the AFM and OCSM have had voting representatives (or ex-officio status—also no longer allowed) to the Orchestras Canada Board of Directors. Orchestras Canada is in the process of changing their bylaws to ensure that they invite guests “fundamentally vital to our operations” so that the AFM and OCSM have voice in an informal arrangement. The same can apply to our orchestras.
There are alternatives to full participation on your orchestra’s board. Musicians should be allowed to attend board meetings as guests, with the right to speak. Musicians should also be welcome to sit on committees and advisory boards, since musicians are directly affected by the decisions made at those meetings. It’s one thing to have a voice in meetings but, according to the rules, a vote at the board is a clear conflict of interest. The message that we understand from the documents available to us is that directors cannot receive salaries, stipends, grants, honorariums, or consulting fees from a charity. The only way you can sit on the board is if you’re playing in the orchestra for free. Or you can seek a court order, but both options are rather extreme.
Employee or self-employed? We’ve probably passed the 50th anniversary of that debate, and for those of us who want to keep it going, it’s still alive. There might still be some life in the board discussion as well, but at least we now have clear parameters to guide the conversation.