Today’s trustees face an increasing set of demands that are expanding the scope of governance accountability. Reform and the rapid pace of change in health care mean hospitals need greater guidance, more agile decision-making and updated strategic plans from their boards.
Legal, regulatory and accreditation agencies are raising the bar for the governing authority in a variety of ways: expanded oversight requirements from the IRS; increased compliance and regulatory oversight responsibilities; changes in federal law and reimbursement regulations; amendments to the Federal Sentencing Guidelines regarding compliance programs; and accountability for the Joint Commission leadership standard requiring a culture of quality care and patient safety.
Volunteer trustees must keep pace with these changes and the accompanying fiduciary, legal and oversight responsibilities. One of the best ways hospitals and health systems can help trustees and, by extension, benefit their organizations as a whole is to dedicate a member of senior management to board support. A chief governance officer or director of governance, in addition to enhancing basic board operations, enables trustees to more effectively deal with the breadth of required oversight in their role as organizational stewards.
Conversations about creating a CGO or director position originated after the 2002 passage of the Sarbanes-Oxley Act. Health care organizations are revisiting the topic because of the increasing complexity of compliance and regulatory requirements and the enhanced accountability of the governing body.
Still, creating the CGO or director position remains controversial. Many organizations don’t understand the value a dedicated staff member can bring to the board. In fact, some CEOs see themselves as the CGO. While the CEO is the official liaison to the board, a separate staff member dedicated to the board complements the CEO role by assisting both the board and CEO in achieving governance excellence.
Developing, implementing and maintaining the governance infrastructure is a complex process. A CGO or director of governance helps the board identify and implement governance best practices and develop the right policies and processes. This position also serves as an ongoing resource on governance questions. In addition, many of the components at the foundation of effective governance can be facilitated by a CGO, including:
- Development of the annual governance work plan with objectives, key deliverables and defined criteria for measuring completion
- Completion of periodic board self-assessments with follow-up actions incorporated in the work plan
- Development of a succession plan to identify and cultivate future board officers and committee chairmen
- Creation of a recruitment plan for potential trustees, including a continually updated list of member core competencies
- Creation of board committee charters that outline each committee’s purpose, authority, responsibilities, membership criteria and meeting frequency
- Revision of the organization’s bylaws
The CGO plays a particularly significant role with respect to bylaws. First, he or she ensures adherence to and regular review of bylaws so that board operations in practice are consistent with written policy. Second, if the organization is part of a larger system or the hospital has subsidiaries with separate boards, the CGO is responsible for coordinating the bylaws and governance processes of each entity.
Board operations give rise to other essential CGO responsibilities:
- Drafting the board meeting agenda, including the consent agenda, with all necessary motions and resolutions
- Tracking board committee work to ensure all required action flows through the appropriate committee and up to the full board with recommendations for approval
- Establishing a board education plan that includes new-member orientation, ongoing development programs and the creation of a governance resource guide
- Managing the conflict of interest policy and the completion of annual disclosure forms
- Maintaining confidentiality agreements
- Checking board member names annually against the Office of Inspector General and General Services Administration sanction lists
- Overseeing governance document retention
- Creating an annual report that summarizes and memorializes all board activity
The size of the organization, the number of subsidiary boards and the complexity of the governance structure shape this position. For small organizations, these responsibilities may be part of the job description of an existing member of senior management. Some hospitals have assigned this role to in-house counsel because of his or her legal training. However, the pace of change in health care and evolving trustee responsibilities suggest that the CGO or director of governance merits a full-time position.
Heightened scrutiny from government and regulatory bodies affects both individual trustees and the hospitals they serve. This makes a high-performing governance structure essential. Appropriate staff resources must be provided to maintain the underlying fundamentals on which the governing body operates so that board members can more effectively execute their oversight, fiduciary and legal responsibilities. In addition, as the complexity of corporate governance activities and board member accountability increases so does the associated risks of noncompliance. Having a dedicated, senior-level staff member to facilitate board operations is a reasonable expectation of today’s voluntary board member. The time has arrived: management support for the board is now a practical matter.
H. Rebecca Ness (firstname.lastname@example.org) has 25 years of senior management experience in health care and higher education with specific expertise in governance and compliance. She lives in South Portland, Maine.
Sidebar - CGO/Director of Governance Job Description