Choosing Wisely: Succession Planning for a Down-Sized Board

By Barry S. Bader and Pamela R. Knecht

Several events can lead to a decision to down-size a board. In some cases, the trigger is a merger or an acquisition in which seating all legacy directors would result in a large, unwieldy board or produce an imbalance favoring one of the combining parties. In other cases, a large board simply decides its present size is an impediment to efficient and effective governance.

Governance experts generally recommend that not-for-profit hospitals or health systems aim for a board size of 11 - 17 members. That range is small enough to run productive meetings and make decisions efficiently, but large enough to encompass the range of competencies and diversity desired for effective governance. According to the latest AHA survey of hospitals and health systems, the average sized board is about 12 and 68% have between 6 and 18 members, but many are larger, ranging as high as 65 members (according to survey respondents).

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