FRU obituary: Mike Dearham


Mike Dearham, one time CEO of the Film Resource Unit (FRU) offers his assessment of the demise of this important industry organisation


The recent announcement of FRU’s demise has not come without surprise. For most of the past 2 years the organisation under “new management’ has found itself in varying states of crisis – it was common knowledge in the industry that FRU was in a state of turmoil – faced with a complex combination of simultaneous challenges: high staff turnover, internal conflict, funding and cash flow crises – FRU’s energies and resources were subsequently redirected “inwardly’ in desperate attempts to defuse staff conflict and organisational paralysis.

The resultant lack of continuity and erosion of institutional memory led to FRU attempts to re-invent the proverbial wheel, resulting in a “gaggle’ of uncoordinated activities and endless staff meetings. Many filmmakers like Ross Devenish will bear witness, that FRU ultimately lost touch with its very reason for existence – i.e. serving the filmmaker community in whose name funds were raised.

This sad prognosis and end game of FRU tends to mirror exactly the same pattern of entropy ? and erratic? decline observed in many other civil society organisations in the rest of the developing world. The different aspects and stages of NGO organisational crisis and obsolescence in SA have been well documented (e.g. refer case studies of Apollo Development Association, SACHED, CVET, SITHENGI etc.) From a civil society perspective, the primary pitfalls/traps for rapid NGO decline; essentially boil down to the sectors’ general inability to deal with the environment changes-some of which include;

1. re-direction and re-prioritisation of post 1994 – foreign donor funding especially in the arena of film and media

2. managing the ever evolving relationship between civil society and new SA democratic state

3. the departure of senior (NGO) leadership to fill government and private sector positions

4. cost reduction and ability to deal with competition

The principal reasons for FRU success during the post 1994 period was precisely its ability to engage each of the aforementioned areas with precision, coordination & vigour.

Notable indicators of FRU’s historical achievements during the period 1995-2005 are amply documented – some examples include:

• Successful and high profile theatrical releases of a number of African films (e.g. Lumumba, Mapantsula, Sankofa, Drum, Rue Princesses, Hyenas, Jump the Gun, etc)

• Co-founding and launch of Sithengi in partnership with SABA (Southern African Broadcasters Association)

• A profitable and well-oiled Video & DVD distribution department – that was virtually self sustaining

• Timeous & regular royalty pay-outs to independent filmmakers & producers

• Successful launch and implementation of a shared partnership with Government Communication and Information Service (GCIS) for delivery of audio-visual services to Multi Purpose Community Centres (MPCCs) countrywide.

• Publication of 3 high quality SA & African film catalogues – catalogues that are still used by numerous academic and film institutions in the world today

• Uninterrupted fund-raising achievements each year, excellent relationships with key donor groups (Hivos-Dutch donor & Henrich Boll Foundation – German donor – FRU’s principal donors for 12 successive years – donor loyalty was based on quality results and unqualified annual financial audit reports submitted each year without fail)

• The training of scores of unemployed youth to become successful film entrepreneurs

• FRU was awarded the Prince Claus Fund Award (prestigious European cultural award) in 2000, for excellence in field of film development and distribution.

None of the aforementioned indicators of success can be regarded as merely “coping’ or “avoiding checkmate’ or for that matter “managing decline’, but instead mirrors organisational dynamism, innovation and effectiveness.

So then….just how is it possible for a once thriving (blue-chip) NGO to be reduced to imminent? liquidation and abject failure in so short a space of time?

In my view the principal reasons are (some of which have been previously stated by other commentators):

1. Poor FRU Board Management of handover process:

1. Having resigned my post as FRU coordinator in April 2005 – the FRU board failed to timeously recruit a replacement coordinator to fill the leadership void – this leadership void continued for a period of close on to one year – a new replacement CEO was eventually recruited a year later!

2. A comprehensive “FRU board-approved handover plan’ was initiated by myself and presented to FRU board for input – a “handover contract’ was signed between FRU and myself. All pertinent FRU records were presented, discussed and handed to the newly appointed CEO (in electronic format).

3. The quality and depth of FRU informational transfer from the newly appointed CEO to the current “new FRU management’ is not clear to me – however, given the internal staff conflict it is unlikely that the handover process was sufficiently robust.

4. Questionable Recruitment process of new FRU Coordinator

FRU board allegedly discovered weaknesses and flaws in the newly appointed CEO’s management capability & style and proceeded to institute a protracted disciplinary/legal process to remove the CEO from office – during this process the newly appointed CEO was suspended with full pay for an extended period of time – a very expensive labour/legal exercise ensued, which had an exacting toll on FRU financial resources and staff morale

5. Cash Flow management

It is common practice that within NGO/donor relations fund transfer to NGO’s are delayed for long periods of time– the ability to skilfully manage cash flow in anticipation of pending funds becomes an essential and required skill within the NGO recipient community – historically FRU faced similar challenges – yet managed to find innovative ways (securing bridging loans etc) to avert cash flow crisis. At all times exercised great caution not to utilise funds earmarked for other purposes without written consent from donors. It will be interesting to learn if FRU’s use/misuse of donor funds earmarked for production of “Nothing but the Truth’ had written approval/consent from the actual donor? Was the FRU board aware of donor consent for FRU to use/not use this fund for purposes other than production of the film?

6. Outstanding Debts & Overdue SARS account

The Companies Registration Act of South Africa requires Section 21 companies (by law) to undergo an annual financial audit by an independent auditor. Classically, audited financial statements allow “company directors’ to assess the financial status, debt, tax and asset status from year to year. During my tenure at FRU, FRU’s board was diligent in its assessment, scrutiny and final acceptance of auditor reports of FRU annual statements each year. A FRU Board Finance/Audit sub-committee (comprised of FRU board members) met regularly to ensure close monitoring and redress of FRU finance and audit matters.

How then is it possible for long overdue debt to go undetected by FRU board, Finance sub-committee and duly appointed auditors without any plan to resolve? Within this context, how is it possible that FRU’s board allowed debt to accrue to such unacceptably high levels so as to lead the organisation to ruin? In the same vein, how is it possible for an organisation that is audited annually not to have a clear and updated understanding of its yearly tax status with SARS? – then, to suddenly discover a long outstanding SARS debt during an internal management audit in 2006?

7. Failure to deal effectively with Competition – e.g. The M-Net African Film Library

Since its inception, FRU has never had to deal with serious competition from within the SA and African film industry (specifically as it relates to distribution of African Films). At that stage, the acquisition and distribution of African Films in South Africa was largely the preserve of FRU. In post apartheid SA, we have witnessed marked proliferation and improvement in SA -African socio- political and economic relations. Award winning African Films were/are increasingly recognised as important “media and cultural assets’ – consequently the acquisition of these assets are presently pursued by groups/persons other than FRU.

In a past e-mail (prior to my resignation as FRU CEO), to the then FRU Chairperson, I carefully explained the potential benefit and threat of this new Pan -African expansion trend to an organisation like FRU. In my e-mail, I presented a rationale that argued for FRU to form a strategic partnership with M-Net in its plans to curate an African Film Library (AFL). I argued the imminent and pressing danger to FRU if FRU was not to partner with an initiative of this nature. My proposal to the FRU board was rejected on grounds that M-Net’s acquisition strategy to procure extended license rights for African Films was counter to FRU “corporate values’.

Subsequently, and in a more recent meeting between M-Net and FRU – M-Net once more extended an open invitation to FRU to explore possible partnership modalities aimed at promoting and distributing M-Net’s African Film Library. Rather than adopting a co-oerative stance in this meeting, FRU became confrontational.

8. The Advent of Digital Technology

In a prophetic article (1995) written by previous FRU coordinator Mr Richard Ishmail – Ishmail warned the then FRU board of the imminent threat and danger to FRU if the organisation failed to aggressively embrace digital technologies in its distribution and archiving strategies. He argued that failure and FRU neglect to digatilise would be a recipe for certain disaster – Ishmail’s prophecy has regretfully come to pass, FRU has not kept pace with new media trends & developments much to its detriment

9. The Role of the State & SA National Film and Video Foundation

The Department of Arts & Culture (DAC) and National Film and Video Foundation (NFVF) have served as long-standing supporters and financial contributors to FRU. Millions of rands of tax payers’ money have been channelled to FRU from these organisations over the past 12 years. These organisations played a critical role in supporting FRU’s audience development initiatives in township and rural countries. The sheer efficiency of FRU’s management & implementation of the outreach projects and financial prudence exercised in each project spending cycle – has literally guaranteed uninterrupted and long-term financial support from these agencies. It is thus curious to learn that the same agencies are now hesitant to continue their support of FRU in its most needy hour? It will be interesting to learn their reasons for discontinuing support to FRU.

I think there is general consensus that FRU’s demise is nothing short of a national tragedy. That FRU has now to lay down its “spear in defeat’ alongside the “fallen spears’ of many other similar worthy film initiatives is regrettable.

At this alarming pace of national NGO demise, what is to become of audio-visual representation in SA’s civil society sector? How does this steadily deepening void impact on the National Growth & Development Strategy for the SA Film & Television sector? The African Film industry has lost another important player. Yet it should not be our part to lament FRU’s passing, but our collective duty to rally, support and find means to restore FRU to its former position of dignity and strength – we need FRU, we need many FRU’s in the world today – but we need FRUs that actually operate efficiently, with impact and in an sustained manner.


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