The principles of effective, proactive governance are the same for all organizations, from public health systems to for-profit medical groups. CEOs and their boards must be in open dialogue around the key principles of effective governance before, during, and following the many challenges healthcare delivery presents.
In order for a board to govern effectively, three key areas of governance must be in place: 1) proper board structure; 2) process; and 3) development.
Board structure
Members of an effective board should be recruited based on a defined matrix of desired governance skills, experience and term limits. The matrix criteria should reflect the unique characteristics and needs of the healthcare institution and may include several of the features listed in the illustration below.
Sample board composition criteria
The cultivation and recruitment of outstanding candidates is an ongoing responsibility shared by the CEO, board chair and Governance Committee — a committee that should be established, as recommended by the Sarbanes-Oxley legislation, to oversee bylaw compliance, board recruitment and development and conflict of interest statements, among other key duties. Additionally, a critical role for this committee is the identification of gaps in board competency as members leave and join the board. Successful boards should develop potential board candidates year round and remain in dialogue with members of the medical staff, community and other board members to identify and cultivate the best potential candidates.
An effective healthcare/hospital board delegates more than half of its responsibilities to standing committees. Successful boards delegate strategic oversight to their Finance Committee, Quality Committee, Strategic Planning/Growth Committee, etc., to support the institution’s mission and strategic plan. Standing committees are chaired by members who then report the committee’s actions and accomplishments at the full board meeting. Each board member should serve on at least one committee and meet attendance requirements.
Board process
Board meeting agendas should follow an annual board calendar to ensure that the most important elements of the strategic plan are receiving proper focus. Agendas revolve around standing committee reports documenting meaningful accomplishments that support the strategic plan. Opportunities and challenges the organization faces are managed most effectively when the board spends half of the meeting reviewing past performance and the remainder of their time together focusing on the future. A consent agenda provides the structure to support strategic discussion. Management should provide performance-based metrics to assist board members with quantitative and qualitative measures of accomplishments. A balanced scorecard that cites key strategic plan metrics, accomplishments, and shortfalls is often the first page of the monthly board meeting packet and visually aligns board discussion around areas of progress and risk.
Board development
Given the complexity of healthcare leadership, successful boards have elevated member development beyond just organizing retreats and distributing article reprints. The Governance Committee of a successful healthcare board also assumes responsibility for education, cultivation, and evaluation. The core of effective governance is a well-defined education plan that begins with a thorough orientation and is designed specifically to each member’s needs and interests. New members may bring a wealth of governance and business experience to the board room, but the complexity of a healthcare enterprise requires a thoughtful and staggered orientation to assist new board members in reaching their full potential as contributors. An effective board education program considers skill/competency gaps within the board and includes an annual retreat with management, medical leaders, and board leaders. There are highly regarded conferences, materials, and specialized training opportunities either on-site or in resort venues that offer board and management leaders the chance to break away from day-to-day management and focus instead on strategic issues and opportunities.
Two final elements to effective governance and board development are board conversations and evaluation. Good board members value feedback and opportunities for growth. The CEO and board chair should share the responsibility of meeting with each board member individually at least twice a year. These conversations are not part of member evaluation, but should instead help cultivate members and form the framework of future board education. Evaluation is equally important, and many boards have moved beyond self evaluation and have adopted a 360 degree evaluation to improve board performance, collaboration, and participation.
Summary
In order for a board to govern effectively and serve as a strategic asset to a healthcare organization, the board must recruit and retain members that complement and balance each other, responsibilities must be delegated to committees in support of the strategic plan, and the continuing education and cultivation of members must be pursued.
For additional information on ways to ensure effective governance, please contact Blair Contratto at (310) 320-3990 or bcontratto@thecamdengroup.com.
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