Establishing and sustaining a vibrant board governance program has become essential in healthcare organizations as they navigate the often complex and always changing factors facing the industry today. The value of governance, particularly in the non-profit sector where members are unpaid volunteers, can often be underestimated and taken for granted as simple “community service”. While volunteer service should always be prized, even not for profit boards must be prepared and able to face challenging circumstances in advising their senior leaders and in fact carry a fiduciary responsibility to do so. Financial pressures, decisions regarding mergers and affiliations, discontinuing unsustainable services that may be valued by segments of the community and the prospect of a high-profile negative patient outcome all require engaged decision makers to help guide leadership. In addition, changes in federal policies on healthcare, a staff and physician workforce significantly stressed in the aftermath of the pandemic and the rapid changes promised by advent of AI will certainly require a dynamic board to assist senior leadership in coping with an increasingly uncertain terrain.
While every organization and market has its unique challenges, good governance is a common denominator to ensure quality decision-making at the senior leadership level and plotting strategy for long-term success. In most organizations, the journey is a long-term process with many phases and steps. That said, a strong program focuses on several important basics:
• Establish a strong Governance and Nominating (Gov-Nom) Committee
function: This board-level committee is generally tasked with oversite of the organization’s bylaws but also sets the tone for the critical functions of identifying and recommending incoming board members, member orientation and ongoing education, succession planning for chairs and other board positions and leading the process of board self-evaluation. The committee should also set or recommend governing board member expectations in areas such as term limits, meeting attendance, subcommittee participation rates and philanthropic participation in organizations dependent on donor support. This committee is generally best chaired by an individual who has a strong sense of organizational history and culture, but who also understands the importance of looking to the future to meet the changing needs of the community. Committee membership should reflect diverse board viewpoints to represent the full spectrum of the community served.
• Self-evaluate at least every two years: The foundation of maintaining a vibrant governance program is a solid board self-evaluation process. This can be done in a variety of ways—email surveys, personal interviews using a standard set of questions or both. Again, this process should be executed under the auspices of the Gov-Nom Committee and is usually conducted by the committee chair and board chair. The self-evaluation allows the board to address key issues. Are the demographics of the board still reflective of the community served? Is senior leadership employing the right amount of transparency in its dealings with the board? Do individual board members have an interest in chairing a committee or the board itself in the future? If the organization values a strong philanthropy program, do individual members support those efforts to the best of their ability? Are board meetings engaging enough, covering the right materials and providing good opportunities for board dialogue?
The self-evaluation process also provides an opportunity for board leaders to raise issues about individual members’ attendance, engagement and whether a member’s interest or ability to serve may have waned during their current term. This subtle yet candid conversation may avoid an awkward situation in the future and allow a non-performing (or non-interested) trustee to bow out gracefully. Survey results should be shared with the full board with an action plan developed and monitored at least bi-annually over the course of the year.
• Think ahead! The importance of succession planning: Since the board chair sets the tone for the entire board, few things can derail an effective board governance function more than a gap in a dedicated chair or, worse, a prolonged tenure by a chair (at the full board or committee level) that is no longer truly committed to the role. While this can be partially addressed by the inclusion of term limits in the board bylaws, it’s important to be on the lookout for the next chair at least one year in advance of a chair’s end of term. Above all, it is important to identify an individual who has not only the experience and insight, but the time to serve as a chair, particularly if the role is unpaid. Does the chair candidate fully understand the difference between board guidance and hands-on management? Are they able to maintain the calendar of meetings required for the role? Does a board chair candidate have the skill set and availability to meet, confer with and provide mentorship as needed to the organization’s chief executive? Assuring that an individual has not just the talent, but the time and temperament to establish a healthy and open relationship with the organization’s leader is important.
Even for those who possess these skills, consideration for taking on a board chair role can be daunting for a member who may have significant career or family commitments outside of the organization. One effective tool for diminishing some of this “pre-commitment” stress is use of a vice chair role. Allowing for this role in the bylaws provides the opportunity not just for coverage when the current chair in unavailable, but allows the prospective chair to “test drive” the role before being formally nominated to be the next chair. In general, it’s advisable for the vice chair to make their decision on serving within a year of being in the role to keep the process moving forward.
• Reassess and rejuvenate membership: How to keep the board nimble and forward thinking should be the ultimate question for any governance program. While much of this can be addressed in the board self-evaluation process, another effective supplement to that effort is a committee chairs meeting. At this annual gathering, chairs take stock of their committee membership. Are the mix of skills sets represented at the committee—information technology, human resources expertise, knowledge of local or state government—still relevant to face not just today’s challenges but those of future? Are physicians, nurses or other clinicians playing valuable committee roles? What may have been a great committee line up five years ago may be reaching obsolescence soon. These thoughts and recommendations must be circulated to the Gov-Nom Committee for deliberation and ultimate action in sourcing incoming membership.
Like any worthwhile initiative, establishing effective governance is never an overnight success. Building a high functioning board can take years, but by starting with the right core activities and adhering to them, the results can be transformative and long-lasting.
The post Establishing Good Governance: Start with the Important Basics and Play the Long Game appeared first on Becker's Hospital Review | Healthcare News & Analysis.
