[MSN] Yes, you can be too rich. What separates the Getty Trust from its stakeholders in L.A. and the art world? $6 billion.

[Museum Security Network Mailinglist]

Yes, you can be too rich
What separates the Getty Trust from its stakeholders in L.A. and the art
world? $6 billion.
  

By Christopher Knight, Times Staff Writer


The J. Paul Getty Trust has a problem. I'm not talking about the possibly
looted Greek and Roman antiquities in its museum collection or the
investigation by the state attorney general's office of past financial
shenanigans in the executive suite. Those are certainly problems, widely
reported in these pages, which the Getty is now addressing with sobriety.

I'm talking about something else. I'm talking about a predicament at least
as big, if not bigger. Think of it as the meta-problem — the one that helps
to drive the others.
  
Simply put: The Getty is too rich.

Sounds crazy, I know. How could such a thing be possible? Don't they say you
can't be too thin or too rich?

Well, yes, they do. But everyone also admits emaciation is bad for the
health. It's time to acknowledge that damage can be done by excessive
wealth.

This occurred to me the other day when the Getty Trust announced the
formation of a search committee to find its new president and chief
executive officer. The art world promptly took a deep breath — and rightly
so.

The Getty is an art institution, not a business or a profit-making
corporation, yet businessmen and corporate chieftains have held the top job
there for the last 25 years. If you're wondering why the place has not lived
up to the highest expectations — in spite of inarguable successes and an
endowment now approaching $6 billion — the misplaced faith in corporate
leadership is an excellent place to look for answers.

The last time the nation's wealthiest art philanthropy went down the
CEO-search road, in 1996, it drove into a ditch. It would be hard to imagine
a worse fit for the job than the man they chose. Barry Munitz abruptly
resigned the Getty presidency in February with several years left on his
contract, under a dark cloud of ethical strife and legal suspicion.

By contrast, Munitz's predecessor in the top job was benign. Harold
Williams, who held the post from 1981 to 1997, was a very different kind of
leader. Instead of cronyism as an organizing principle, which Munitz seemed
to favor, Williams addressed the Getty's future as a straightforward
management problem. He assembled a cogent team of art experts and forged
ahead.

Despite these sharp differences, however, the résumés of Munitz and Williams
share critical similarities. The likenesses explain a lot. And where they
intersect is at the giant dollar sign.

First, both Getty chief executives were former businessmen. They held top
jobs at powerful corporations.

Munitz trained at the knee of Texas takeover tycoon Charles Hurwitz. (At
Maxxam Inc., a Fortune 200 holding company, he presided over one of the
largest savings-and-loan failures in U.S. history.) Williams worked for Hunt
Foods & Industries, rising to the chairmanship of Norton Simon Inc. He came
to the Getty via Washington, where he was head of the Securities and
Exchange Commission.

Second, neither man had a shred of professional experience with art. Norton
Simon, Williams' erstwhile boss, was arguably the greatest art collector of
the last half-century. But neither Williams nor Munitz could claim a robust
history of private enthusiasm for painting and sculpture.

Third, both had university administration on their résumés, Munitz coming
directly from the Cal State chancellor's office. I dare say that, for former
Getty search committees nervous about turning over All That Money to the art
crowd, the university link offered a humanistic veneer to a pair of
corporate tycoons.

Therein lies the source of the money trouble. The Getty Trust is blessed (or
cursed) with billions, and the enormity of its bank account catapults the
institution into an art league by itself. Its endowment dwarfs the runner-up
Metropolitan Museum of Art by a factor of more than six.

Why is that a problem? Ask Adam Smith.

In "The Wealth of Nations," the Enlightenment moral philosopher and
economist recognized a quandary that bedevils the corporation concept. It's
as much a problem today, in our foul era of Enron, Tyco, WorldCom, Adelphia,
ExxonMobil and the rest, as it was when Smith published his book in 1776. He
characterized the formidable conundrum as "other people's money."

As businesses, corporations are distinctive because they separate ownership
from management. Stockholders own the company, but they do not run it.
Boards of directors and their hired executives do.

That means corporate managers are using other people's money, rather than
their own. Smith warned that "negligence and profusion" — profusion meaning
extravagance — were an inevitable result.

The structural flaw in the corporate ointment is this inherent lack of
functional accountability. Among the directors of such companies, he wrote,
it "cannot well be expected that they should watch over it with the same
anxious vigilance with which the partners in a private guild frequently
watch over their own."

Negligence and extravagance — were two words ever more precise in
characterizing the rising tide of woe at the Getty Trust over the past many
years?

The Getty is not a business, of course. Nonprofit philanthropies do not have
the exact equivalent of stockholders.

What they have are public stakeholders — namely, you and me. Unlike a
profit-making corporation, the ownership of the Getty Trust is, in theory,
the same as its management. A board of trustees, which finally calls the
shots, is ideally composed from representatives of those public
stakeholders.

This is where the "too rich" part comes in. Unlike trustees at virtually
every other art institution you might name, no Getty trustee needs to put a
single dime into the place. Its huge fortune means the scramble for cash is
not pressing, setting it apart from American nonprofit art centers.

As a result, the Getty Trust is less like a typical charity and more like
the corporations Adam Smith warned about. Getty trustees only manage other
people's money. Smith's analytical model explains why, following the first
explosive story of Getty executive suite chicanery in December 2004,
trustees languished in denial, month after painful month. Even in the face
of shocking profusion, the board was negligent.

Sure, trust officials are now making a lot of the right noises to signal
that they've learned from the awful recent experience. Board Chairman John
Biggs stressed the search committee's "strong ties to the Los Angeles
community," an obvious response to widespread feelings of local alienation
from the Getty's complex, far-flung program.

Trustee Louise Bryson, who will lead the committee, also made a point of
reaching out. She cited "the incredible team of arts professionals and staff
who have made the Getty the excellent institution it is." Alienation of
staff from employer was born of eight long years of indifferent leadership.

This thoughtful rhetoric is a good sign, but it won't suffice. The search
committee will work with Los Angeles-based executive recruitment firm
Korn/Ferry International, which last year put Michael Brand in the vacant
director's chair at the Getty's art museum. But that was easy, compared with
this.

Munitz packed the Getty board with a narrow range of successful corporate
executives, making the problems inherent in a system of managing other
people's money even worse.

Getty trustees don't remotely resemble the Getty's putative stakeholders.
Five of the search committee's seven members, including cable TV executive
Bryson, hail from the corporate management suite. (Most are in the financial
services industries.) This homogeneous echo chamber has scant expertise in
the Getty's programmatic mission.

So, what to do? As it begins to search for a president, how can the Getty
Trust mitigate the prickly problem of being too rich?

Simple: Listen to Adam Smith. Stop separating ownership from management.

First, cross off "corporate leadership experience" as a search criterion; in
fact, use the résumés of Williams and Munitz as examples of what not to look
for now. Then, give priority to remaking the board. In the boardroom and in
the executive suite, let representative stakeholders run the place.

Art is the fountainhead of the Getty's mission, from which all else must
flow. The job of Getty Trust president cries out for evidence of lifelong
fervor for art. (How bizarre that such a qualification even needs to be
flagged, because it might seem unorthodox!) A muzzy enthusiasm for "culture"
or a fuzzy affection for education cannot match a deep and abiding passion
for the specific fascinations of art. For this particular vocation, academic
degrees are beside the point, but love and sensitivity are not.

L.A.'s singular perspective, characterized by its artists and art
institutions, past and present, needs asserting — and the Getty Trust could
and should be its mega megaphone. Yet the trust's first two presidents were
artistically provincial, even as the city grew cosmopolitan.

The next one needs an enlightened understanding of art in the vivid context
of today's complex cultural ecology — at the Getty, in Los Angeles and
globally.

Candidates should also be closely quizzed about remaking the board, on which
the president also sits. Typical art institutions cannot afford to stray
very far outside the moneyed classes, since fundraising is continuous. The
Getty, free from that constraint, could range far and wide. Twenty-five
years on, it is inexcusable that it hasn't.

Given the Getty's unparalleled institute for art conservation, why is there
no great scientist on the board? With an incomparable art research library,
why no brilliant historian? Why no major artist? Smart leadership could
build a vibrant board that meshes the specific demands of the mission with
the actual range of public stakeholders in it.

That's a lot to ask, I know. Something approaching a miracle will be
required.

But I suppose that's another characteristic of enormous wealth: An
expectation of miracles comes with it. The Getty might be too rich, but
finally it's too rich not to make it happen. 

http://www.calendarlive.com/