What Makes A Great Board Chair?
By Beverly Behan and C.J. Bolster
Board chairs have the potential to affect virtually every aspect of their institution positively. They may influence: the future direction and performance of their hospital or health system; the leadership team’s careers; the organization’s physicians, patients, and employees; the overall health and social fabric of the community; and the economic vitality of the communities they serve. The position carries tremendous weight and responsibility while offering the opportunity for personal fulfillment. It can be tremendously challenging , but recognizing some fundamental precepts can help pave the way for success.
The chair creates the climate in which the board operates. Great board chairs typically create an environment characterized by openness, candor, positive energy and commitment to the mission of the organization. They often begin by creating a set of board expectations shortly after taking office.
While it is often relatively simple for a chair to develop a list of his or her own expectations, this exercise is most powerful when the chair gets input at the outset from the CEO, fellow trustees and other members of senior management, asking, among other things: What does the board expect of management? What can and should management expect of the board? What are individual trustees’ expectations?
Setting these types of board/management expectations is key to achieving organizational success. Not only does this activity demonstrate to trustees and senior executives how they are likely to work together under the new chair’s leadership, it can also provide the incoming chair with important insights into board-management dynamics.
One chair with whom we have worked discovered that his trustee colleagues were confused about their responsibilities for donations and fund raising. Always a thorny subject, his predecessor had avoided dealing with it because of the awkwardness inherent in conversations about these issues. The new chair, however, refused to ignore the topics. By addressing donations and fund raising in an open board discussion, he accomplished two things: first, long-standing issues that had confused and concerned many trustees were resolved; and second, he garnered a huge measure of respect from the board because he was willing to confront sensitive topics.
Establishing the right board committees is another aspect of the board environment that an incoming chair should address. One experienced hospital chair says she believes that two vitally important committees are the board’s human resources, development and compensation committee, and the patient services and satisfaction committees. “The most important ingredient in a hospital are the people who serve our patients, and the board needs to focus on these issues through an HR committee,” she says. “And a patient services and satisfaction committee can assist management both in considering new services and overseeing how patient services—especially those in the emergency room—are being handled.”
Great Board Meetings
If board meetings ramble, become bogged down in unproductive issues or are marred by a lack of participation or preparation from directors, the chair must realize that a significant measure of responsibility lies at his/her door. Ultimately, the chair is responsible for conducting board meetings, setting agendas, typically in conjunction with the CEO, determining the nature and quantity of the information fellow board members receive before meetings and—to a lesser extent—the format for communicating that information in meetings.
Information. Because the content of data provided to the board in agenda materials is driven largely by management (such as performance and financial data), some board chairs neglect this critical area. Indeed, while the content of meeting materials does need to be driven by management, the best chairs take the board’s pulse on that content and provide useful direction to management. For example, one board chair who received a lot of informal feedback from fellow trustees that they were feeling overwhelmed by the amount and level of technical data they were receiving, let the CEO know and asked for three things:
- • That all pre-meeting reading materials include a one- to two-page executive summary giving an overview of the issues, as well as questions trustees should be prepared to address at the next board meeting. Although this request required that management spend more time preparing for meetings, it paid big dividends in terms of the board’s focus and engagement.
- • That trustees be given a glossary of key technical terms and commonly-used abbreviations in their orientation packets to help them understand health care industry terminology.
- • That 45-minute-long “death by Power Point” presentations be cut down to 15 minutes of highlights, followed by more time for Q&A during the meetings. This required creating more comprehensive, but also more focused pre-meeting reading material along with the executive summaries. It also required that the chair be clear about trustees’ responsibilities for reading pre-meeting material and coming to meetings prepared for discussion. Otherwise, long didactic presentations could not be eliminated.
While these changes were being implemented, the chair regularly sought feedback from trustees on whether they were helpful: What was working? What wasn’t working? What still needed to be done? The net result was that changes in how information was communicated led to dramatic improvements in the overall effectiveness of board meetings, which benefitted both the board and senior management.
Setting Agendas. Board time is precious. Many boards meet only a few times a year, typically with much to accomplish and strict time limits for each agenda item. Making sure that this time is focused and productive is one of the chair’s most important responsibilities. And yet, as with board information, it is typically an area to which chairs fail to devote enough attention. If the organization is putting out the same type of “cookie cutter” board agenda it has used since 1987, the chair needs to take an active role in reviewing that agenda with fresh eyes.
Equally important in designing agendas is the discipline of time allocation—ensuring that the time set aside for discussion of a particular item is realistic and sufficient. Often this necessitates having to cut an item from the agenda because of a lack of time, and it may require that the chair and CEO resist the temptation to try to “squeeze in” items that there is simply not enough time to discuss properly. To avoid this problem, it can be useful to create a board calendar that drives board agendas throughout the year. Those agendas should reflect the board’s and the organization’s key priorities over the next 12, 18 and 24 months, in addition to the standard items that might be outlined on an annual calendar.
The best board chairs poll the members to find out whether there are items that they feel are important and yet are never discussed—organizational strategy, CEO and executive succession planning, and executive compensation typically top this list—and probably represent the most important responsibilities the board has. Not only is it critical for these issues to make it onto board agendas, it is equally important that the chair and CEO decide how to engage the board effectively in discussing them.
Leading the Meeting. Great board chairs not only design good meeting agendas and ensure that trustees get the right information, they also run great meetings. The best chairs are adept at keeping the meeting moving, while encouraging all board members to participate in discussions. Highly effective chairs also try to bring out contrary viewpoints so that all sides of an issue are vetted before the board makes its final decision on an agenda item. They are equally skilled in knowing when and how to intervene gracefully to keep a meeting on track when board discussion meanders off point, or bogs down over one issue.
It is often difficult for a board chair to gauge how productive meetings are. That’s why chairs should regularly seek out trustees’ assessments. However, there are a few warning signs that meetings are not proceeding effectively:
- The chair does most of the talking. The best chairs introduce agenda items and then engage the board and management in dialogue, drawing out different perspectives and encouraging trustees to speak who may be reluctant to express their views in a group. Less effective chairs eat up board time expounding on their own opinions, become uncomfortable when contrary positions are expressed, and are seldom willing to change their minds.
- Meetings always run over time. This could be a result of bad planning, a bad agenda design or both. Either way, great chairs don’t, as a rule, allow meetings to run over their allotted time and seek to remedy the problem when it does occur.
- Meetings have low energy. Highly effective board meetings are usually stimulating. Flagging energy may be an important sign that a different approach is required to keep trustees and management actively engaged.
- Decisions are consistently delayed. The best chairs are able to drive their boards to reach consensus, even on difficult issues. Boards that keep putting off decision-making can be a nightmare for management, which finds itself stalled in making progress on important issues until the next board meeting, months down the road.
The Chair-CEO Relationship
Building a great chair-CEO relationship can take time, which is why we recommend term limits of more than three years. Regardless of the term, however, incoming chairs would do well to meet with their CEOs at the outset of their terms to talk about how they want to work together. If role descriptions have been crafted by the organization, the chair and CEO should review them to determine if they are workable or need to be modified given the working relationship they wish to forge. The chair also needs to establish regular, ongoing meeting times with the CEO to discuss various issues, review agenda items for upcoming meetings, and keep in touch between meetings.
The best CEO-chair relationships are characterized by honest, candid, two-way dialogue and mutual respect. But fostering too cozy a relationship can have significant drawbacks. For example, if the board has a problem with the CEO, the chair should be able to tell him or her, and the CEO, in turn, should be able to trust the chair to do so—even when it might be difficult or awkward. Chairs that refuse to confront “the tough stuff” with their CEOs do them a disservice and ultimately mar the relationship.
Chairs will know they have set the right tone in their relationship when their CEOs voluntarily use them as a sounding board, and they are able to discuss different perspectives on issues. Similarly, the CEO should be able to discuss a director’s performance with the chair, confident that the chair will maintain the confidentiality of the discussion and address the issue with that director if necessary. The chair should never impede other trustees from forging their own relationships with the CEO.
On the other hand, the most dysfunctional chair-CEO relationships typically suffer from personal agendas. In one instance, the chair was an unsuccessful contender for the CEO’s position. This led to tremendous strife in their working relationship, which ultimately became unworkable. Anyone taking on a chair’s role in these circumstances should reconsider.
In another scenario, the chair was paid a large one-year retainer to integrate two health systems and their boards. Wanting to justify maintaining the same fee for another year, the chair became overly involved in operations, leading to problems with the CEO. This chair’s agenda was readily transparent to other board members, who refused to endorse the continued retainer and asked the chair to step down the following year.
Selecting a CEO is arguably the board’s most important job, and it is the chair’s responsibility to ensure that both an emergency and a long-term succession and development plan are in place that effectively engage the board in this critical process should the CEO and/or other key executives need to be replaced.
Strong Self-Awareness
Self-awareness is one of the hallmarks of a great board chair—and never more important than when the chair is so highly qualified and respected that he or she is treated with inordinate deference by the other trustees. While this can be flattering, the most seasoned board chairs recognize the downside to this phenomenon—namely, that other board members may refrain from expressing their own views and may give the chair’s opinion undue weight. Great board chairs recognize when they are being treated as “the smartest guy in the room” and take steps to balance the relationship between themselves and their fellow board members. Typically, they try to foster a diversity of perspectives and withhold expressing their own opinions until a thorough debate has ensued. To do this, many chairs try to broaden board composition, recruiting more knowledgeable members.
Feedback is the key to self awareness. The best chairs formalize an annual evaluation of their performance. When well-implemented, these reviews typically generate very useful insights for the chair, often highlighting areas of strength that the chair took for granted, as well as identifying areas for improvement, including small changes that the chair might never have thought of that can dramatically enhance his or her overall leadership.
Leveraging Trustees’ Talents
Highly effective board chairs recognize that their success depends to a large extent on the whole board’s effectiveness, and so they continuously seek to improve their board’s performance. Frequently, this involves conducting an in-depth board assessment, interviewing trustees and senior executives who work with the board regularly. This helps them understand where the board is performing well, where it is genuinely adding value for the organization, and where it may be missing the mark.
The best board chairs go out of their way to leverage the talents around the boardroom table, making sure, not only that the board is adding value for the organization overall, but that board service is a fulfilling experience for each trustee. This requires knowing the backgrounds, capabilities and interests of all trustees. A good chair typically meets with each trustee individually once a year—or once every two years for very large boards—provided that his or her term is at least three years. These meetings help the chair form a better understanding of what each member can contribute and where a trustee’s interests lie.
Leveraging board talent involves developing highly effective new directors as well. One chair was delighted to recruit two new trustees who could provide much needed financial skills, as well as membership diversity to the board. Neither had served on a board before, and the chair not only needed their expertise, he also wanted to boost their confidence as strong members of the governance team. During their first year, he would routinely call both of them prior to meetings to discuss the agenda, asking them which agenda item they were most interested in and wanted to discuss in the meeting. He even developed one or two questions for each to consider raising in the discussion. These conversations also gave the new trustees an opportunity to ask what they considered “dumb questions.” Once they had gone through this process with the chair a few times, they quickly developed the confidence to continue on their own—but each sincerely appreciated the support the chair had provided them.
Health care organizations will see great changes in the coming years, and those boards led by great chairs will be a true asset to their organizations and stakeholders.
Beverly Behan is managing director of the Board Effectiveness Practice for Hay Group, New York City. She can be reached at beverly_behan@haygroup.com; C.J. Bolster is vice president and general manager for the Hay Group Southeast Region. He can be reached at cj_bolster@haygroup.com
This article 1st appeared in the May 2007 issue of Trustee Magazine.
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