A strong, nimble and stable board is integral to the viability of a health system. This governing body, which could oversee a number of hospitals, integrated health systems or philanthropic foundations, must effectively manage numerous fiduciary duties and core responsibilities.
Integrated Healthcare Strategies, a healthcare consulting firm, has developed 50 behaviors and practices that constitute an effective board. The behaviors are drawn from 10 years of client experiences and publications by The Governance Institute and the American Hospital Association's Center for Healthcare Governance, according to Integrated Healthcare Strategies.
The list is divided into nine categories: a board's three fiduciary duties and its six core responsibilities. Here are some highlights from each.
Fiduciary duties
Duty of care
- The board routinely seeks the advice of independent, outside experts when evaluating its performance
- The board regularly monitors organizational performance against both board-approved goals and industry benchmarks (where available) for finance, quality, customer service and business strategy
Duty of loyalty
- All board members receive a detailed orientation and updates on the obligations associated with the duty of loyalty
- Board members who knowingly violate conflict-of-interest and confidentiality policies are subject to removal from the board
Duty of obedience
- The board takes identifiable steps, such as a mission integration assessment, to ensure the organization's mission and core values are visible throughout the enterprise
- The board or a board committee routinely reviews compensation for executives, board members (if applicable) and physician leaders (medical directorships, etc.) to ensure appropriateness and alignment with statutory and regulatory guidelines
Core responsibilities
Financial oversight
- All board members receive ongoing education on the financial management and health of the organization
- The board demands corrective actions in response to under-performance on long-range and annual capital and financial plans
Quality oversight
- The board routinely reviews a performance "dashboard" or "balanced scorecard" with quality indicators that highlights trends and variances requiring celebration, corrective action or follow-up reports
- Proposed program/service additions or enhancements are required to meet specific quality-related performance criteria (for example, volume requirements and effective staffing levels)
Setting strategic direction
- The board is involved in establishing the organization's strategic direction, including setting priorities and approving the strategic plan
- The board has adopted criteria for evaluating proposed new programs and services to assess key factors (e.g. financial feasibility, market potential, impact on quality and patient safety, etc.)
Board self-assessment and development
- An annual board self-assessment and goal-setting process are treated as top priorities by all board members and senior executives
- The board has a committee that routinely assesses the organization's bylaws and recommends areas for improvement/best practices in structure, composition and performance
Management oversight
- The CEO has written performance goals that are mutually agreed upon with the board prior to the evaluation period, and the board commits to invest in supporting executives' competency enhancements
- The board requires the CEO to maintain a current, written succession plan for her/him and the senior executive team
Advocacy
- The board requires a periodic community health needs assessment
- The ability to advocate on behalf of the organization is a board membership criterion used in the selection process of new board members
To view the entire list of 50 board behaviors, click here.