Walk inside any big company lounge. You will be impressed by the decor, the interior design, and most of all, the great artwork hanging from the walls. Is the art there to impress strangers like you and me? Or is there some intrinsic rationale behind this extravagant expense?
There are several obvious reasons why companies buy art and want to decorate their walls with visuals rather than stock photography and inspiring quotations.
But, in the last few decades, the number of huge organizations building significant art collections has skyrocketed, and it's not only because they need to cover empty walls.
The practice dates back to the Italian Renaissance, where Banks were regarded as connoisseurs of the Art, having breathtaking art collections among their holdings.
Corporate art as décor and a status symbol over time and began to spread steadily across companies. It is estimated that in the 1990s, approximately half of the Fortune 500 firms and an additional 2,000 companies across America and Europe were developing corporate art collections.
Why is it crucial to buy the perfect piece of art?
The choice of the collection is usually by the owner or CEO of the company. Still, they are immediately dispatched and managed by experts and advisors, many of whom have art history backgrounds and curatorial credentials.
These professionals assist in creating a collection that is designed to portray the company's vision, mission, and values. It can be viewed as continuing marketing and communications initiatives to develop or influence their public image over time.
How does Art help the Corporation?
To inspire Employees: Art in the workplace reduces stress, boosts creativity and productivity, boosts commitment, broadens employee appreciation of diversity, and fosters dialogues. Employees are sometimes the most expensive item in a company's budget; therefore, it pays to keep them happy and engaged. Corporate art humanizes the workplace and provides context for the company's employees' lives and actions. It demonstrates the organization's credibility to clients and visitors and how the company values its workers.
Serving the Clientele: Art on the walls can also benefit the clientele by delivering the company's vibe. Art and commerce are inextricably linked. Connecting a company's art program to its business activities can significantly benefit gaining new customers and retaining existing ones. Many companies have bought art over the last 20 years to complement their culture, brand, and viewpoint.
Investing in the local community: Companies may buy and showcase the work of local artists to invest in and nurture support in their communities. Putting money into the locality while improving that community and creating goodwill is in the company's best interest. More and more businesses see their collections as part of their social responsibility policies—-a way to interact with the larger community spread the proceeds, and possibly reduce the likelihood of a bourgeois revolution.
Art as a form of Investment: Art is a risky investment that may or may not pay off in the future. But unlike buildings, corporate art isn't necessarily going to deteriorate over time. Most businesses are not buying art to resell it for a profit a few years later. They prefer to keep their work for longer periods, making it easier for artists and galleries to sell to them. However, they occasionally sell masterpieces, as when German Commerzbank acquired 65 million pounds for a single Giacometti painting at auction in 2010!
Enhancing the Company's image: The art displayed brazenly on the wall reveals information about a company's taste, financial situation, community ties, and appreciation of the connections between business, design, and the fine arts. The art on the walls can reveal how the company wishes to be recognized. Artwork in a greeting area, waiting room, or meeting room helps visitors and clients feel at ease by creating a sense of comfort. It demonstrates the company's performance and promotes a forward-thinking and dynamic corporate culture. Sometimes companies display a whole collection of museum artwork for serving their highest clientele to maintain the brand image.
Can investing in Art be considered a way to save taxes?
The tax procedures that some corporations utilize to acquire art are quite interesting. Purchasing pricey art might be a method for postponing or even avoiding taxation for businesses. Art is frequently considered a business expense. So every hundred million dollars spent on art is a hundred million dollars that aren't taxed, which has the effect of discounting art purchases just like it makes other corporate purchases.
But whether companies indulge in such a practice cannot be claimed for sure.
Conclusion
Art is considered to be an efficient yet lucrative business practice. Increasingly so with companies adopting out-of-the-box ideas to innovate their work. For more financial insights and ongoing finance trends, visit our blog at Salt.
