Competency-Based Succession Planning

By Barry S. Bader

Building a board with the right skills, diversity, and culture

Even before the Enron scandal, which featured directors who didn’t understand the company’s complex financial transactions, and before the Sarbanes‐Oxley Act required publicly owned corporations to disclose whether their boards include directors with financial expertise, it should have been self‐evident that relevant knowledge and experience are prerequisites for effective governance.  

Until recently, though, many governing boards, including those  at community hospitals and health systems, approached the  nominating process without a great detail of precision or  planning. Community hospital boards filled vacancies from the same social and business circles as current members. 

Without question, many visionary, dedicated, and accomplished  individuals have joined boards through this pathway over the  years. However, as the expectations for governance  accountability and effectiveness have increased, the limits of  traditional, informal board recruitment are becoming apparent. 

To