They should extend beyond the arm and curve down preventing the owl from hovering close to the entrance of the outer gourd. The ultimate goal is to prevent the owl from hovering near the rack, seeing the martins and trying to get a foothold on your gourds. Owls must be blocked out. If you have a commercial aluminum house, the manufacturer may make owl guards for it. They usually consist of a network of bars that attach to the front of the house.
Some people make their own by attaching wire to the front of their houses with a type of clip.
This is fine as long as the openings are large enough for the martins to enter the compartments. Below is a picture of my colony with owl guards. Both of these predators are easily controlled. A baffle is usually attached to the pole. There are several different types made commercially or you can make one yourself.