By James E. Orlikoff and Mary K. Totten
Over the past decade, we have learned much about board effectiveness. A growing body of research has systematically confirmed the intuitive link between board and organizational performance: higher-performing boards are associated with higher-performing organizations.
Thus, anything that improves the quality of governance will improve the performance and success of the organization—across all dimensions. We also have learned that a key to continuous governance improvement is to focus on improving the board as a team.
In this context, two simple truths of governance are abundantly clear:
- a significant part of a board’s effectiveness depends on the quality of its leadership; and
- no one has more influence on board culture and performance than the board chair.
Ironically, while many health care organization boards have worked to improve the selection, development and performance evaluation of individual board members, less attention has been paid to applying the same approaches to board leadership. When their organizations are facing the need for a new CEO, few boards would ask “Whose turn is it?” or settle for a “learn-as-you-go” approach for the incoming executive. Yet, far too many boards do little more than this when appointing the board’s next chair. Most boards work hard at establishing performance objectives and evaluation systems for their CEOs, yet shy away from doing this for their chairs. For these and other reasons, many board chairs are less effective than they could be and actually inhibit their boards from achieving maximum governance effectiveness.