Most board chairs and their board members face extremely complex healthcare issues, as well as higher performance expectations in their roles. Collaborating on changes in medical services arrangements is expected, growing market share is a necessity, financing is crucial and ensuring community critical services access is a must. The importance of boards putting their community health first and being mission-focused in moving from volume-to-value-based care has become the basic white waters that boards must navigate.
In most cases, boards have stepped up their game in response to the multitude of challenges confronting their organization. However, most also agree their governance culture and practices still need improvement if they’re going to be a valuable partner in leading their organization through the transformational changes they face.
Where to Begin
Every board annually needs to critically assess, evaluate and determine its strengths and weaknesses in relationship to what it will take to lead their organization. Unfortunately, most boards are not used to having these types of introspective conversations with themselves.
Critical to governance success is conducting annual board self-assessments via facilitated retreats. These events should focus on board performance, action plans for improvement, and establishing educational programs.
Wherever boards are on their journey to better governance there’s no doubt that effective governance begins and ends with their CEO and how he or she views their boards relationship, which can range from nuisance to threat to thought leadership and anywhere in between.
Without CEO support, any board will have a difficult time partnering in leadership because any board action can be snubbed by the CEO as micromanaging or overstepping into management’s domain.
After the CEO, the board chair is the most influential person shaping the board’s effectiveness. It is extremely difficult, if not impossible, to overcome the problems of a weak or overly controlling leadership on the part of the chair.
Keys to Success
A shared balance of organizational power between the Board Chair and the CEO is critical to the success of their partnership.
Managing egos is critical for good governance. When one or both has a big ego, things get out of hand in a hurry in the boardroom.
According to Demb and Neubauer (1992), the following factors build trust between a Board Chair and CEO team:
Characteristics of an Effective Board Chair
The caliber of the board chair enormously influences the quality of governance. It’s not uncommon for non-profit boards members to be unclear about how a board chair is selected.
The selection process many times is either informal or improvised.
The effectiveness of the organization governance depends on the conscientious nomination process for both board members and the chairperson. It must be transparent, understood and inclusive.
The governance committee should poll their board for their thoughts and recommendations:
Chairing a non-profit healthcare organization board demands a huge commitment of time and effort. The opportunity to exercise leadership in one of the community’s most important institutions is priceless.
According to the Great Boards 2016 Fall Newsletter, half of all Board Chairs have no training or mentoring; nineteen percent learn through board progression experience. Most trustees don’t have any healthcare background and an unspecified number of hospital senior leaders think new trustees without healthcare experience take approximately three years to gain confidence in their ability to collaborate effectively.
Dr. Carla Boutin-Foster and colleagues define the medical culture as “the language [slang], thought process, styles of communication, customs and beliefs,” which is used to describe the informal and highly specialized nomenclature and vocabulary used by the healthcare industry. Trying to understand the hospital’s cultural language becomes one of the primary challenges for Trustees when managing their conversations and coming to consensus on decisions.
In a national study on the perspectives of nonprofit board chairs, Nonprofit Quarterly’s fall 2016 edition explored what preparation was done by board chairs and how they see their relationship to the board and other key stakeholders. What they found was a glaring picture of neglect with 51% of respondents doing nothing to prepare to become board chair.
Previously held board officer or leadership position in same institution, i.e., committee chair, vice chair / chair elect has some promise and limitation in preparing an incumbent for the role of board chair.
The majority of board chair respondents relayed that observing the prior chair and asking the CEO for advice was helpful. Coaches, consultants or outside resources were least likely to be considered.
Boards labeled least effective are “rubber stamped” for management recommendations, which provides basic oversight to ensure compliance; boards labeled standard effectiveness requires some thinking regarding proposed prepackaged management recommendations; the highest board performance label requires a governance leadership model that raises critical questions and requires critical thinking from its membership and reporting CEO.
The board chair leadership phenomena has intrigue to it… in the spirit of governance and organizational effectiveness, especially in rural healthcare, how can half of all board chairs assume their role with no or minimal training?
With healthcare changing very rapidly, accommodating long grace periods for board leadership positions is unacceptable. Rural Healthcare key stakeholders, medical staff providers, patients and communities expect their boards to have the skills and competencies to make timely high-stakes decisions, as well understand the best ways to shape and meet their community needs.
Boards in all sectors are being held to a higher standard of performance and accountability. They are expected to be more actively involved in setting organizational strategy, resource allocation, capital financing, investments, conflict management, executive performance, management and succession planning, clinical quality and external relations. It can be quite overwhelming.
Dennis D. Pointer, governance expert, offers this insight, “Boards are as high up in organizations as one can go and still remain inside them. They bear the ultimate fiduciary responsibility, authority and accountability for their organization’s affairs.” A fiduciary is an individual in whom another has placed the utmost trust and confidence to act for their benefit.
Many board development assessments I have conducted conclude that board members are good citizens who don’t have a clear sense of what their obligations are and what type of work needs to be accomplished. Board members role expectations, as well as, their board chair, committee chairs and their CEO roles have not been collectively discussed, understood or agreed on.
Bruce Stickler, Board Chair at the Illinois Department of Public Health, said that expectations for boards and their chairs have changed dramatically, “Board chairs have to be much more active today in every aspect of healthcare change, including collaborative arrangements and community services. They can’t leave the work to the staff; they must provide leadership and direction and be involved.”
What causes board and board chair failures? It’s a board’s tapped out choice in selecting someone who doesn’t understand what governance means and how to exercise it. In my next post, I will cover how this phenomenon can be corrected.