Strong, capable hospital and health system governance has never been more important than it is now. I serve on three public company boards and one nonprofit pediatric health system board and work with outstanding board members in each case. I made a list of the best board members and identified seven qualities that health care organizations might seek in their directors, qualities easily overlooked both in recruiting new directors and evaluating existing ones. The directors on my list have all of these qualities. Illustrating each quality is a profile of a real person (names have been changed):
- Depth and breadth. The best board members typically have deep knowledge in one or more domains — for example, finance, investment banking or marketing — and in one or more sectors of the economy, such as manufacturing, retail, health care or government. Many also have leadership experience as a chief executive, chief operating or chief financial officer. Excellent board members are able to apply their deep knowledge broadly across a range of issues; they are both specialists and generalists, rather than one or the other. Tom, president of a major hospital system, has dealt with most of the issues challenging the leaders of the pediatric system on whose board we serve. He is so knowledgeable about health care that he could comment on virtually every topic that arises, but he doesn't. He is sensitive to being sure that the board looks to management for answers, not to him. He selectively comments on issues that can most benefit management. Tom's deep knowledge of health care is invaluable, but so is his broad range of wisdom gleaned from managing a complex organization. Even if he weren't in health care, he would be an excellent member of this board.
- Conceptual ability. The best board members see the big picture; they see a pattern forming in a discussion before others see it. They can synthesize a board discussion and bring closure to it. Synthesizing well requires listening well, and excellent board members are excellent listeners. No board member with whom I serve is a better listener than Mark. A former senator, Mark has had extensive experience in trying to put a puzzle together when the pieces didn't want to fit. This requires creativity, pattern discernment and careful listening. It also requires the patience to wait to speak until the pattern begins to form. Mark helps to put puzzles together — he is a great "closer."
- Self-confidence. Self-confidence is a crucial quality for a board member as long as it doesn't manifest as self-importance. Excellent board members have the self-confidence to challenge management when necessary, to be the minority voice on an important issue and to offer a contrary point of view. They also have the self-confidence not to speak when nothing more needs to be said. Ben is perhaps the most experienced business person with whom I've served on a board. He has been CEO of several major companies and has extensive board experience. Ben is bold — he does not hesitate to speak up when something concerns him. He is direct, but his directness is rarely viewed as abrasive because his commitment to the company is unquestioned. Ben often will be the first to broach a sensitive topic, but just as often, he may be one of the few not to comment on another topic if others already have discussed it adequately. He is a role model for other board members. I've served with him for years and am a better board member because of my exposure to him.
- Respectful. Board chemistry requires respectful behavior. Excellent board members invariably are respectful; they respect differing viewpoints, an organization's leaders even when disagreeing, the meeting agenda and allotted meeting time, the governance role, and the high stakes associated with a board's actions. Susan's content and tone are thoughtful when she speaks. She is quick to praise when praise is due, reinforcing an atmosphere of management-board teamwork. She is capable of disagreeing with another board member or management, but never disagreeably. She also is good at moving a conversation off-line if a board discussion is running long.
- Sense of calm. The best board members bring a sense of calm to the boardroom. They typically speak softly, even when tension may be high, and they avoid emotionally charged language. They are good at bringing perspective to a discussion and, when necessary, good at easing tension in the room. They often have a sense of humor, which is handy in the boardroom. Ralph is an investment banker who knows a calamity when he sees one, but he is never rattled in the boardroom. He exudes calm and freely uses his wicked sense of humor. He is smart and wise, a powerful combination, and he skillfully establishes his points by asking questions rather than making speeches. His serenity helps to keep the meeting's temperament productive.
- Singular organizational focus. Board effectiveness depends upon trust in the room. Board members do not always need to agree, but they do need to be confident that each director is focused on the organization's best interests. When a director's personal agenda conflicts with the organization's goals, it undermines a climate of trust. Steven and Jonathan both are retired corporate CEOs who became business school deans. Both serve on multiple boards. They epitomize laser-like focus on what will strengthen the organizations they serve. That is their singular role: to help create a stronger, more viable and valuable organization for stakeholders. These directors have no agenda other than the organization's agenda and people in the boardroom know it.
- Credibility. A director who brings deep and broad knowledge to the table, who listens well and connects the dots, who is self-confident and respectful, who is a calming influence and who is singularly committed to the organization's welfare will be credible. Fellow board members — and management — will listen to a board member who possesses these qualities. Board members do not need direct health care experience to be credible. They earn their influence in the boardroom through their behavior, their wisdom and their commitment to good governance. Credentials help them get recruited to the board, but it is their performance over time that gives weight to their voice. Kathryn is an engineer by training and CEO of a company that annually makes Fortune magazine's "100 Best Companies to Work For" list. Like the other board members mentioned, she possesses each of the qualities enumerated, earning her maximum credibility. When she speaks, the rest of us in the room listen intently. Indeed, the best test of a director's credibility is the intensity with which others listen to him or her.
Set High Standards, Search Hard
A good board works as a team; like any team, performance depends primarily on the players' qualities. Boards should be as rigorous in selecting new members as in selecting a new CEO and use a similar process. Identifying candidates who have the desired qualities requires a thorough assessment of skills, experience, general background and references in addition to in-depth personal interviews and private discussion of the candidate's potential strategic and cultural contributions to the organization. Assessing the fit between a candidate's personal values and integrity and the organization's expectations is an important step. Choosing a director in haste may mean a missed opportunity.
Health systems should cast their net widely in searching for director talent. Boards should reflect genuine diversity not only in race and gender, but also in background and experience. It takes only one director with a unique view of a problem to suggest the perfect solution that others did not see. Universities, government agencies and the clergy are fertile sources of prospective directors in addition to the business and health care sectors.
Setting high standards for directors and searching hard for the best candidates represent essential investments in effective governance. A board is a body of wisdom that brings a spectrum of perspectives to the table. It is a collective of capable voices that contribute expertise, vision and insight from outside the organization. Choosing high-quality members who will be strategic advisers is essential as health care faces momentous change.
Leonard L. Berry, Ph.D. (BerryLe@tamu.edu) is University Distinguished Professor of Marketing and Regents Professor at the Mays Business School, Texas A&M University, College Station, Texas.