Resource Library

Mergers and acquisitions (M&A) are occurring throughout health care, with transactions happening among entities of all provider types and sizes.(According to the latest analysis by Kaufman, Hall & Associates, LLC, 49 transactions were announced in the first half of 2015, up from 43 transactions in the first half of 2014.)

The highest-performing boards across the country share certain key characteristics that can be grouped into five categories - visionary, nimble, intentional, competency-based and objective.

Securing board approval for a major new project can be a long and tricky process when the CEO proposing it isn’t sure which criteria trustees will use, and the board is equally uncertain what the yardsticks ought to be. At Adirondack Medical Center in Saranac Lake, N.Y., President and CEO Chandler Ralph asked her board to write down and agree on project evaluation criteria. In a two-hour workshop, trustees came up with 14 points that they now apply to every decision about whether to implement a new program.

Board self‐evaluation is an important process. Surveys by The Governance Institute have shown that making self‐assessment a board priority is associated with high performing boards. Yet, amidst seemingly more important board business, it’s easy for self‐assessment to become a rote exercise.

Patient satisfaction scores are important metrics; they draw attention to the subjective experience of patients who received care from a hospital.

This is a sample committee charter: people and culture committee.

Despite the importance of the role, many boards do not give selection and preparation of the board chair the attention they should. In a recent survey by The Governance Institute, 64% of boards said they had established an explicit process for selection of the board chair but these processes often are little more than a thoughtful conversation among the executive or governance committee about the next chair.

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.  

In 2009 the AHA’s Blue Ribbon Panel on Trustee Core Competencies identified two sets of competencies that focused on the knowledge, skills and personal capabilities needed by trustees of hospitals and health systems to govern effectively.

The trustees of one health system were divided over how to structure the board. Some favored proportional representation from its acute care, nursing home and elder services divisions; others wanted all at-large members with no interests to promote. The CEO of another health system had restructured so facility executives were directly accountable to corporate management for finances and operations. He wanted local boards to focus on strategic direction and oversight of quality, but local boards continued monthly monitoring of finances as they’d always done. Some trustees wondered what their role was.

In industries where safety is critical and quality must come first, such as airlines and nuclear power, “red rules” refer to protocols that must be followed “to the letter” – all work stops until they are. A commercial airliner doesnʼt leave the gate if the pilot spies a possible leak or flat tire; a nuclear plant operator or even a Toyota assembly line worker can “stop the line” when he spots a critical flaw.

The governance challenges raised in the post-Enron environment are motivating many boards and their general counsels to draft new board policies and tighten up existing ones.

Great organizations have great leadership— at the top and throughout their ranks. 

These documents are based on CHP’s core values, the CHP board’s roles and responsibilities, and the expectations established for CHP’s board members. They may or may not fit other boards’ situations. Each board should adopt its own individual competencies and evaluation instrument. Reviewing others’ efforts is a helpful reference point, but no sample should be used without modification.

Increasing diversity in health care leadership and eliminating care disparities are critical to ensuring high-quality care for all. The renamed Institute for Diversity and Health Equity has created a new model for the American Hospital Association’s (AHA) continued work on these issues and is engaging broader participation.

A critical need exists to elevate the discussion about workforce planning and development to ensure it becomes a standing, rather than crisis-driven, component of comprehensive strategic planning for hospitals and health systems.

Because of this generation’s size and increasing influence, Millennials are being surveyed and studied to better understand what makes them tick and how they may play a role in fundamentally reshaping how we live, work—and govern—our organizations.

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.

While most organizations conduct annual board self-assessments, it seems that few boards actually use the results of those assessments to develop specific plans for improvement. According to PriceWaterhouseCooper’s 2017 Annual Corporate Directors Survey, board members’ dissatisfaction with their fellow trustees has reached an all-time high.

As strategic planning becomes a more intense focus for hospital boards, lessons from publicly traded companies may be instructive.