Fewer hospitals and health systems are conducting full board evaluations than a decade ago, even as governance demands on the industry intensify, according to an August report from Spencer Stuart.
Here are five things to know:
1. Only 51% of hospitals and health systems surveyed for the American Hospital Association’s 2025 National Governance Report conducted a full board assessment in the prior three years, down from 57% a decade earlier. Just 19% conducted individual board member evaluations, compared with 1 in 3 a decade ago.
2. That differs from public companies, where board evaluations are standard practice: 99% of S&P 500 boards reported conducting some form of annual performance evaluation, per Spencer Stuart’s U.S. Board Index.
3. The decline comes as health systems face financial strain, workforce pressures and the challenge of safely deploying AI — all while operating at a scale increasingly comparable to public companies. Spencer Stuart argued that scale requires governance models to evolve so that health system and subsidiary hospital boards have well-defined authority, responsibilities and skill sets.
4. Hospital boards have historically prioritized donors and community leaders for board seats, which served fundraising and mission goals but often left directors less versed in corporate governance practices. Spencer Stuart said thoughtful evaluations give boards a chance to benchmark against best practices and modernize — citing one hospital board assessment that uncovered gaps in its quality committee’s charter, agenda and reporting structure despite having highly skilled directors.
5. To get real value from an evaluation, Spencer Stuart recommended boards clarify goals upfront, use in-depth interviews alongside surveys rather than surveys alone and follow through: assign ownership of recommendations, have candid conversations about hard issues and deliver individual director feedback confidentially. Without visible follow-through, the firm warned, boards and stakeholders may start to question the value of the process altogether.
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