Leveraging Committees

By Pamela R. Knecht

As health care field changes become more complex, savvy board and executive leaders are intentionally increasing the time that their boards spend in robust discussions of strategic challenges and opportunities. Whereas the typical methods for freeing up the board’s time continue to be utilized (e.g., using a consent agenda; providing better materials in board packets), the highest-performing boards focus on another vehicle for board effectiveness— leveraging their committees.

Increased Committee Competencies and Objectivity

Great boards now demand that their committees are structured and function in the same disciplined manner as the full board. For example, the best committees use a competencybased approach to recruit, select and reappoint their members. Each committee develops a matrix that identifies the skills, experience, attributes and perspectives needed to fulfill that committee’s responsibilities. The competencies required include gender and race/ethnicity diversity to ensure that committees reflect the populations served by the organization. Interestingly, the Securities and Exchange Commission (SEC) is now requiring mandatory disclosure of board matrices for publicly traded corporations. This expectation may soon become the norm for not-for-profit boards and their committees as well.

In addition to using a competency-based approach to their committees, diligent boards assess their committee members’ potential conflicts of interest and ensure sufficient “independence” on each committee. Such a rigorous approach to committee membership often requires difficult conversations among board leaders and committee members. For instance, it may be hard to inform board members who are employed physicians that they cannot serve on the Executive Compensation Committee because they should not approve compensation for themselves, their physician colleagues or their boss (for 501c3 organizations, especially). However, these tough decisions can increase the likelihood that key external parties like State Attorneys General will consider the committee’s (and board’s) decisions regarding executive compensation to be sufficiently objective.

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