In today’s environment of health care transformation, hospital and health system boards must evaluate every aspect of their governance processes, practices, meetings and composition to ensure being well-prepared for the changes ahead.
Governing boards must overcome 10 common barriers to transform themselves into the nimble, adaptive, responsive and forward-thinking boards their organizations rely on them to be.
Barrier 1: Insufficient orientation
Competence depends on having the knowledge, skills and behaviors necessary to perform the work required for any job or position. Board members often have strong competence in sectors outside of health care and bring to their board service a range of skills and expertise essential to good governance.
Without an understanding of health care and the local context necessary for decision-making, however, new board members can take longer to achieve their governance potential than may be optimal for both the individual and the board. When it comes to governance effectiveness, new members need a solid orientation to health care, the local environment and their governance role. Approaches to health care board orientation can vary widely, ranging from “learning as you go” (little or no orientation) to broad-based processes where new board members engage in multiple, formal and informal learning and mentoring experiences over many months.
Boards can’t expect strong, consistent performance from their members if they don’t properly equip them for their roles. Ultimately, the collective strength of a board depends on the individual strength of each member. Boards owe it to themselves and their members to provide up front the basic information and resources each trustee will need to form a solid foundation for board service.
Barrier 2: Rubber stamping versus strategic dialogue
The board’s role has never been to rubber stamp ideas presented by the senior management team. Yet many hospital boards continue to serve limited-scope roles. A lack of robust, high-level strategic dialogue, discussion and debate takes away opportunities from the organization, and limits the diverse talent, ideas and experiences trustees bring to the organization.
It is the board’s job to question the status quo, think outside the box and engage in rich dialogue — all to stimulate higher-level thinking that ultimately elevates the organization’s performance to better serve the patients, employees and communities under the organization’s care.
One way to ensure that the board is focusing on the right topics is to design the agenda around the “25/75” rule. According to many governance experts, no more than 25 percent of meeting time should be spent discussing past issues, and on retrospective reporting and analysis. At least 75 percent of board time should be dedicated to issues in which the board has the greatest impact: planning, setting policy, making critical decisions and setting future direction.
Barrier 3: Lack of commitment to continual learning
Boards that engage in deep, strategic dialogue must have the background information and understanding necessary to do so. Health care is moving at its fastest pace in history, and board members cannot rely solely on the information presented or provided by the senior leadership team.
Making sense out of complex issues, considering a range of possibilities and offering creative solutions require having a solid foundation about the ever-evolving health care environment and how it affects the organization and the communities it serves. Leading boards don’t leave board education to chance and do not view it as a periodic, scheduled activity relegated to the annual board retreat or accomplished by bringing in one or two outside speakers to address the board each year.
Knowledge-building must be prioritized, budgeted for and take place continually through a variety of sources, including a personal commitment by every board member to keep up with issues and trends in the field. Effective boards view continual learning as a requirement for board service addressed through a written board policy and included in a statement of board member expectations.
Barrier 4: Presence of conflict of interest
A conflict of interest exists when a board member, senior leader or management employee has a personal or business interest that may be in conflict with the interests of the hospital. Conflicts of interest can be complicated. In some cases, no conflict actually exists, but the perception of a conflict of interest can be just as detrimental.
Boards should have multiple systems in place to safeguard against conflicts of interest. Every board should have a clear conflict-of-interest policy and a disclosure statement, both of which are well-understood and agreed to in writing by all board members annually. A process also should be in place for declaring real or perceived conflicts as they arise throughout the year. Many board chairs ask board members to declare any conflicts they may have related to the issues on the board’s agenda at the start of each board or committee meeting.
A board committee such as the audit and compliance committee should oversee the process for managing conflicts of interest among board members. In addition, boards must have a proper process in place for recruiting and selecting new board members and should encourage their self-monitoring of real or perceived conflicts that may arise during board meetings. As physicians increasingly are integrated or employed by hospitals and health systems, organizations may consider seeking physician or other clinical representation on the board from nonemployed physicians.
Barrier 5: Inconsistent or limited governance assessments
Despite experts’ recommendations to conduct a governance assessment annually, many boards do not conduct a self-assessment. Even those that do may not find the assessment to be as robust or comprehensive as necessary to ensure that today’s hospital and health system boards are prepared to lead their organizations through health care transformation.
According to the American Hospital Association’s 2014 National Health Care Governance Survey findings, only 57 percent of hospital boards reported having conducted a full board assessment during the past three years. Only 33 percent reported having conducted an individual board member self-assessment, and only 6 percent conducted a peer-to-peer assessment.
In addition, two in 10 of the boards that do conduct a full board assessment do not use the results to create an action plan to improve board, trustee or committee performance.
A strong and useful governance assessment process must secure anonymous, insightful trustee input on the critical fundamentals of successful governance and create an opportunity to address major issues and ideas in a nonthreatening, collaborative manner. The assessment should be conducted regularly, with a follow-up meeting or retreat dedicated to discussing the results and developing an action plan to improve governance effectiveness. Boards that take performance evaluation seriously often create mechanisms for more frequent assessment, such as asking participants to complete a brief evaluation of each board and committee meeting, including suggestions for improvement.
Barrier 6: Lack of emphasis on quality and patient safety
Quality and patient safety should be ingrained throughout the organization’s culture. This entrenchment begins with the board. Yet, boards of trustees sometimes assume that quality and patient safety problems are not an issue unless they hear otherwise.
The board’s actions set the tone or culture for the organization, including setting patient-safety guidelines and priorities and dedicating the resources necessary to provide appropriate, effective and safe care. The board must understand health care’s complex systems, and physicians and clinical staff must be held accountable for providing high-quality care.
The concept of a “just culture” represents the combination of understanding the board’s role in quality and patient safety and fixing systemic issues that have the potential to cause patient harm, while also holding staff accountable when there are instances of inappropriate behavior (for example, not washing hands). This cultural concept encourages the reporting of all mistakes, regardless of severity, in order to learn and thereby improve systems and processes.
Boards should monitor key quality and safety metrics regularly through the board’s quality and safety committee as well as through the full board, and review results of annual organizational culture surveys to ensure that a culture exists that supports problem identification, resolution and continual improvement.
Barrier 7: Lack of transparency
Hospitals and health systems are continually pressed by the media, lawmakers and the general public for more information on price and quality to help assess the value of care and service delivered.
Although the challenges that come with explaining price and quality are significant, patients and their families, lawmakers, insurance companies and the general public are calling for clear transparency in both areas. Patient bills should be clear, and information must be provided in an easy-to-understand format. Recent moves toward sharing a combination of price and quality information online demonstrate the efficiency, effectiveness and overall value of care provided.
Hospital boards must ask senior leaders the hard questions to ensure not only that trustees understand the complexity of this challenge, but also that the organization takes proactive steps to increase transparency in these areas.
Barrier 8: Board composition based on representation rather than competency
Governance succession planning is the key not only to filling an empty seat on the board, but also to strengthening board and organizational performance. An analysis of board strengths and weaknesses, leadership challenges and future leadership needs can help the board develop a list of specific skills, attributes and characteristics that are important for new trustees to possess.
The specifications should complement and, as necessary, augment existing board members’ skills and competencies, and assist the organization in furthering its ability to provide high-powered, thoughtful and diligent leadership. In essence, instead of simply accepting any person who expresses an interest in serving on the board, or persuading a reluctant candidate to serve and fill a representational slot, the board should recruit trustees with the skills and personal characteristics that result in a more well-rounded, competency-based board.
Barrier 9: Lack of board leader development
Because boards typically comprise community leaders, they may view the responsibility for “leading the leaders” as more perfunctory than intentional. Leadership, especially of peers, is a specialized role for which the best leaders are thoughtfully prepared.
The days of “whose turn is it to be the board chair” are long gone. In a sector like health care, widely acknowledged to be at the high end of complexity, board leadership requires succession planning that begins with an assessment of leadership potential as part of board member recruitment. Nurturing that potential can include tailored selection and training, opportunities to chair board committees and strategic governance initiatives, and mentoring from current and past board chairs and leaders.
An intentional process for board leader development can help boards move beyond “just-in-time” leadership toward a thoughtful process of selection and development based on the belief that excellent board leadership is the foundation of governance excellence.
Barrier 10: Antiquated board materials and processes
Hospitals and health systems’ resources are stretched to the limit. Rethinking the use of technology, governance processes and meeting agendas can minimize the administrative burden required to prepare trustees for board and committee meetings.
For example, the use of iPads or other tablets can reduce printing costs and time significantly, and provide trustees with immediate access to materials. Electronic board portals also can provide background material, white papers, educational programs and more for trustees to access at any time.
A review of board practices and processes also can identify opportunities for improvement. Are there committees that have outlived their purpose and benefit? Are there areas in which your board spends valuable meeting time unnecessarily because “it’s always been done that way”? Consider how frequently your board meets; how frequently committees meet and what types of committees are used; whether similar reports are being made at multiple meetings; and whether a consent agenda is effectively used.
Boards should evaluate their agendas to ensure that all active meeting discussion and dialogue keeps the mission at the forefront. If an agenda item doesn’t have a direct tie to the mission, perhaps it shouldn’t be on the agenda.
Boards also should consider codifying, through written policies, key board practices such as board recruitment, orientation, continuing education and evaluation of board performance. Creating policies that outline implementation steps and desired outcomes for important board practices avoids reinventing the wheel and provides a baseline for ongoing improvement.
Debra Stock (firstname.lastname@example.org) is vice president, trustee services, at the American Hospital Association.
Steps you can take
- Provide a thorough orientation for new board members.
- Ensure robust, strategic dialogue.
- Commit to and provide resources for continual learning.
- Identify and address conflicts of interest.
- Implement an annual governance assessment with follow-up action plans for improvement.
- Ensure a strong emphasis on quality and patient safety.
- Commit to transparency.
- Seek board composition based on skills and competencies.
- Develop board leaders intentionally.
- Maximize technology and update board processes.