In surveying the contemporary art ecosystem in 2022 at its close, a novel initiative appears to have been largely overlooked, which merits wider exposure and consideration: a Code of Conduct for Contemporary Art Collectors (CCCAC). Primarily adopting a professional ethics approach, CCCAC focuses on a collector’s honour and integrity and reputation – with occasional references to good art business and legal practices.
CCCAC’s authors are an international network of ‘like-minded’ collectors who formed an organisation in 2020 they named Ethics of Collecting, which developed a draft code that was posted online, inviting feedback from those interested and involved in the contemporary art ecosystem. After considering readers’ online suggestions and amendments, the resulting CCCAC was published (at ethicsofcollecting.org) in 2022. CCCAC is intended to be ‘a proactive voluntary set of standards to guide contemporary art collectors in their interactions with artworks and the various stakeholders of the art ecosystem’. It is meant ‘to encourage collectors to think about ethical issues around their actions and become agents toward a more fair and socially just art world’.
CCCAC has to date received around 200 international endorsements from named individuals including artists, arts professionals, collectors, curators, and dealers. This modest number of early supporters is encouraging, but their number is not as important as the changes in collecting conduct that espousers of the code may be influenced to adopt. The code’s preamble gives reasons for its key purpose.
Why a code of conduct for contemporary art collectors? The authors answer their question by stressing the valuable role collectors have played ‘throughout the centuries supporting and encouraging artists and their ecosystems … and continue to contribute in many positive ways to what art is today’. They then contend that, in recent times, the art world has faced an increasing number of ‘ethical questions around the role of art and art workers’ including a degree of disconnect between: on the one hand, key art world players with power and influence operating opaquely; and on the other, the need for a successfully reputable global marketplace to operate with ‘transparency, accountability, integrity and fairness.’ Recognising such disconnection and the authors’ ‘powerful economic position within the sector’, they believe it is now urgent that collectors espouse ‘a set of ethical duties’ towards works collectors currently (and will in future) own, to their artist-creators, and to the professional environment surrounding both.
CCCAC deserves credit for highlighting and addressing, in modest and sensitive ways, some key issues and challenges that have surrounded the contemporary art ecosystem for decades. Many individuals and organisations operating in what is now a global industry have largely avoided, or silently ignored, such matters. A notably rare exception in recent times was the intervention by leading world economist – and occasional contemporary art collector – Nouriel Roubini, who publicly attacked the global art industry at the World Economic Forum in 2015. ‘While art looks as if it is all about beauty, as a business it is full of shady stuff,’ Roubini said, adding ‘We should correct it or it will be undermined over time … Inside information is considered standard in the art market; in other markets, it is thought of as being illegal … The art market is prone to fads, passions, manias, booms and busts, because art works have no clear financial value and the art market is opaque … Regulation is required in the art market because it suffers from tax evasion, money laundering, price manipulation and trading on inside information.’
In subsequent years, Deloitte and ArtTactic’s joint Art & Finance annual reports have addressed Roubini’s regulatory criticisms, from their perspectives as respected art-related business intelligence services. These reports have often conducted qualitative surveys of key opinion formers and stakeholders in the art ecosystem, amongst whom there has evidently been strong agreement about ‘serious problems undermining trust in and credibility of the art market, including top price manipulation, conflicts of interest, lack of transparency, secret commissions, and authenticity’.
Furthermore, two reported findings have stood out. That art transactions ‘are moving from informal arrangements toward a market where careful due diligence and written agreements are becoming more common’. And that ‘there are few professional and qualification standards imposed on art market professionals … one way to improve the current situation is to invest in educating art market professionals on behaviour that is illegal, and making it a requirement that they should inform themselves on the law’. Unfortunately, having identified such key weaknesses in the annual reports, art professional respondents could evidently not agree on constructive improvements or ways forward.
CCCAC represents a modest constructive step towards improving contemporary art collecting practices. Perhaps ethics training and education for contemporary art collectors could be a valuable next step.
A call for action by collectors is CCCAC’s fundamental raison d’être: being a ‘thought-provoking text for professionals in the artworld and beyond’ – as well as being used as a tool to bring about change. CCCAC’s text undoubtedly offers much food for thought, and perhaps could have benefitted from including more utility – especially by suggesting ways in which T&Cs of written collecting agreements could aid realisation of many of the code’s objectives. That said, the authors were evidently mindful of not appearing to be too radical and disruptive of the status quo.
When ‘interacting with artists’, the code proposes that collectors should always ensure artists are compensated fairly and promptly, and especially should not solicit gifts of artwork from them. Collectors should advise artists only when asked, only in artists’ best interests, and communicate with them always respectfully and transparently.
Such suggested ethical conduct could ideally be embedded within T&Cs of written collection agreements along the lines of, for example, the artwork’s not being collected or delivered into the collector’s possession until full and final payment of the agreed purchase price has been received. And if the collector agrees to lend the purchased artwork to a public-facing institution for exhibition purposes, the collector undertakes to use best endeavours to secure payment by the lending institution to the artist of fair and reasonable remuneration.
When ‘building, maintaining, and showing the collection’, the code says that collectors should always comply with laws, regulations, and codes applicable to ‘fair and transparent art-related transactions’. In particular, the code urges collectors to avoid ‘insider trading, corruption, tax avoidance, fraud, anticompetitive practices, and money-laundering’. Collectors are encouraged to use acquisition contracts including T&Cs for ‘usage, display, reproduction, conservation, resale, and artist’s rights management’. To ensure the integrity and longevity of their collection, collectors should make acquisitions available for public exhibitions, and especially question the ethical and reputational impact of artworks being stored and resold in freeports. The art market should not be manipulated by collectors, artists should always be informed before reselling, and artists’ resale rights should be supported. All provisions of the code should apply when operating in an online or digital context.
The code’s proposed use of acquisition contracts could have underlined that they should ideally be written, and only be subsequently varied by further written agreements. Moreover, T&Cs of such contracts could emphasise collectors undertaking, for example: to consult the artist on matters of suitable storage and maintenance; to give artists first option to buy back collected artwork at a fair market price; and never to resell at public auction.
When ‘commissioning or supporting the production of artworks’, the code states collectors should use clear documentation. For example, collectors should initially agree artistic content with artists, and undertake not to influence that content during its execution (unless in response to an unsolicited request by the artist). Collectors should always pay artists fair market prices for produced or commissioned artworks.
These business-like dimensions of the code could have highlighted the distinction between artists being paid fair and reasonable fees for two separate things. For example: payment for expending creative skill and labour and any material costs in executing the artwork. This payment should ideally be non-refundable if the commissioner terminates production or declines buying the completed artwork. And then a further fee for purchasing and taking possession of the completed work. In this way artists could be secure about being paid for creating the artwork and commissioners could be secure in knowing that they may terminate production or reject the finished artwork, and may control finances accordingly.
When supporting ‘not-for-profit-share public-facing institutions’, the code advocates that collectors should not influence any aspects of their ‘curatorial, acquisitional, programming, organisational, or financial autonomy’. Collectors should not support such institutions in exchange for, say, showing their collected artworks or other works of artists in their collection. Collectors should reject ‘artwashing’ (use of art and artists in a positive way to distract from or legitimise negative actions by an individual collector, family, or corporate image). Collectors should disclose sources of their financial or other resources to institutions they support.
When ‘serving as members of governing bodies of institutions’, the code recommends collectors to accept appointments only for their ‘expertise, experience, knowledge, competence, ability to advocate for the institution, and other substantive art-related skills … without expecting any direct counterpart for themselves or their collection … and only for non-commercial purposes’. Collectors should ensure institutions have conflict-of-interest processes applicable to governing members, and should disclose any of their own conflicts of interest as governors.
When ‘interacting with dealers’, the code suggests holding dealers accountable promptly to inform artists they represent about details of purchasing transactions, including: pricing, any discounts applied, buyers’ identities, and providing their artists with formal accounting documents. Collectors should not ask dealers to sell artworks below fair market prices. Collectors should not purchase artworks directly from artists represented by dealers (unless the artwork has not been consigned by the artist to their dealer, in which case the artist and dealer should be asked to clarify who is to be seller). If collectors are also dealers, or have a personal or financial interest in a dealership, any actual or potential or apparent conflict of interest in purchasing should promptly be disclosed to and resolved with the artist. Collectors should not engage in market manipulation with dealers (via, say, ‘secretive, collusive, or abusive practices … to artificially inflate prices of artworks’).
It is understandable that the code does not offer ways and means of such ethical conduct being complied with by dealers, because to do so could improperly trespass into the heart of business relationships between dealers and artists they represent. However, it could have been valuable to say that when executing a written purchase agreement, dealers should undertake to provide artists they represent with a copy of such an agreement. As for collectors who are also dealers purchasing works of artists they represent, perhaps a written artist/dealer agreement should ideally be in place with T&Cs providing, say, that works may be ‘bought-in’ at the artist’s agreed fair market price (less a discount equal to the percentage rate of commission the dealer would take for selling a consigned work to a client-collector).
When ‘interacting with other professionals such as curators, art historians, critics, other art workers, media professionals, and with the public’, the code supports respecting the independence of media professionals, contracting fairly with art professionals for services provided, and respectful and truthful communication with the public. In these objectives, as with most of the code’s other tenets, written agreements with T&Cs could aid realisation of transparency and fairness and ethical conduct, not only in collecting practices, but also in the whole art world.
© Henry Lydiate 2022