A Social Value Judgment Model of Corporate Governance in Performing Arts Organizations

Abstract

Abstract This chapter theorizes the importance of social value judgments as a primary framework for understanding effective governance in performing arts organizations. Social value judgments are assessments of worth or value based on a specific set of assumptions contained within the value system that defines the status order in a given community. Status, reputation, legitimacy, and authenticity are each different categories of social value judgments. Prior theoretical approaches to corporate governance—agency theory, resource dependence theory, stakeholder theory, and institutional theory—show how governance practices in arts organizations help signal economic accountability through legitimacy. However, these theories fail to show how arts organizations signal artistic excellence through authenticity. The article reviews prior research on governance practices and strategic decision-making in performing arts organizations through the lens of social value judgment theory and offer a set of summary propositions that demonstrate the importance of adopting governance practices that effectively manage the essential tension between conflicting demands of legitimacy and authenticity.