Original content published in the November/December 2011 issue of Trustee magazine, Vol. 64, No. 10. © 2011 by Health Forum Inc. All rights reserved. Permission granted for digital use only.
The recent economic crisis, coupled with weekly headlines about one company after another demonstrating poor corporate governance choices, led investors and corporate watchdogs to blame boards of directors for less than-expected company performance. These stakeholders argue that directors were asleep at the wheel and not paying close enough attention to their oversight responsibilities. In response, regulators are regulating and directors are looking for additional ways to demonstrate their accountability and stay out of the crossfire.
How does this scenario relate to hospital trustees, especially nonprofit hospital trustees? The common thread is governance and how the board manages its operations. Hospital trustees should not forget that included in their key responsibilities, along with performance oversight, approving long term strategy, reviewing the CEO succession plan and overseeing risk and compensation, is determining how the board should function. Effective hospital governance is becoming increasingly important and is evident in the increased scrutiny surrounding such issues as quality processes and patient safety. In addition to uncertainty regarding the economy, health care leaders also must be concerned about the challenges and effects of health care reform. How does the hospital trustee respond?