Why do Corporations Decide to Build Art Collections?
Reasons behind corporate rationale for establishing institutional art collections
Weekly writing about the art market and the convergence of art and technology. By day, I’m an art dealer at the Robert Fontaine Gallery and a data science consultant. By night, I write Artxiom, ideas at the intersection of art, technology, and finance.
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Why do Corporations Decide to Build Art Collections?
In the 1950s, then president of Chase Manhattan Bank (JP Morgan Chase today), David Rockefeller, initiated an art program aimed at enriching the corporate environment and demonstrating the bank’s commitment to cultural and social engagement. His vision went beyond simply decorating office spaces; Rockefeller believed that art could enhance the workplace atmosphere, reflect the company’s values, and improve its image. Not only was he convinced that an art collection could act as a legitimate and valuable component of corporate identity and culture, but also as an instrument for financial appreciation. What began as a $500,000 investment in art at Chase Manhattan Bank has grown to be worth over $1 billion. At the time, this initiative was considered unusual and risky; however, the success of Chase Manhattan’s art collection set a precedent, inspiring other companies to build their own collections.
To begin with, corporate art collections can significantly enhance the workplace atmosphere by improving the aesthetic and well-being of employees. Art adds color, texture, and visual interest to otherwise sterile and mundane office spaces, making them more attractive and stimulating to work in while also bringing a level of comfort and sophistication. In addition, it can positively influence employees’ moods and reduce stress levels. Studies like the one conducted by the Harvard Business Review, “How Art Can Improve Mental Health at Work”, have shown that exposure to art can lead to lower anxiety and improve overall well-being. This is one of the main reasons hospitals, places of overwhelming emotions of stress and fear, choose to display art in order to bring calmness and aid to the healing process. Furthermore, artistic environments can stimulate creativity and innovative thinking which in turn increases productivity. Microsoft, Facebook, and Google have stated employee’s well-being as the main reason behind their art collections. According to Microsoft Officials, “The mission of the Collection is to create a positive work environment through the exhibition of diverse contemporary artworks. And to foster creativity and innovation for our employees, while supporting the art community.”
Secondly, throughout history, companies have collected pieces that reflect their values and reinforce their culture, which, accordingly, improves the company’s image. A wide-range art collection can celebrate diversity and promote inclusivity by featuring works from artists of different backgrounds, cultures, and perspectives. These ideas promote cultural dialogues by placing art as a catalyst for conversations and interactions among employees, fostering a more collaborative, innovative, and open-minded workplace culture. Moreover, companies can show they are aware of what is happening in the world in an effort to stay current and relevant. Well-curated collections tend to impress clients, partners, and visitors, demonstrating the company’s commitment to culture, quality, and social responsability. This can enhance a company’s reputation and brand image, helping to build relationships, strengthen ties, and foster long-term partnerships.
Lastly, the concept of corporate art collection as a form of investment has gained traction over the years. For instance, Lehman Brothers raised $12 million by selling their art collection in 2010, and AT&T made $30 million in 1999 after auctioning part of theirs. Initially, these collections were primarily seen as means to enhance the workplace environment and reflect the company’s values. However, as the market evolved, and art sales boomed in the 80s and 90s, many corporations came to view their art holdings as valuable financial assets, ultimately, cementing art as a form of investment. As a result, a new, alternative way to invest was born, and institutional art collections started to help diversify the company’s portfolio beyond traditional financial assets such as stocks and bonds. In addition, art is usually classified as a unique asset class, uncorrelated to other market instruments; even during a downturn of the global financial market, art can still hold and even increase its value. Hence, many companies see collecting art as a way to mitigate risk like inflation. It is valid to mention that the art market can be unpredictable, and the value of artworks can fluctuate based on trends, economic conditions, and changes in an artist’s reputation. Also, art is not a liquid asset, which means selling artworks can take time. This duration includes finding a buyer, negotiating terms, and completing sale logistics.
In summary, corporate art collections play a multifaceted role in enhancing the workplace atmosphere. By improving aesthetics, promoting employee’s well-being, fostering inclusivity, and creating positive impressions, art can significantly contribute to a more dynamic, engaging, and productive work environment. Additionally, corporate art collections can serve as valuable investments, offering significant returns and diversification benefits that complement traditional asset classes. Major auction houses like Sotheby’s and Christie’s, highlight in their regular reports the steady appreciation of art values, reinforcing art as a strong alternative investment. Indexes that track art sales, such as the Mei Moses Art Index, also show positive long-term returns. This approach to art acquisition reflects the evolving role of corporations in society where success in increasenly measured not just in profit but in cultural capital and social responsibility. Ultimately, corporate art collections are a testament to the enduring power of art to create value in the business world.
Summary of the top corporate art collections in the world, estimated value, description, and notable artists in the collection:
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