When I think of how governance of health care organizations has evolved, I think of the old slogan: "You've come a long way, baby." For more than 200 years after Benjamin Franklin started the first hospital in Philadelphia in 1751, governing boards were mostly composed of wealthy, eminent citizens whose main job was to give or get money to run the hospital. Financial support was a prerequisite for being on a board, and no one was surprised at the end of the year when the administrator told the trustees how much the hospital was in the red and asked them make up the deficit.
Times have changed. Today, hospitals are widely considered to be among the most complex organizations anywhere. Their boards are responsible for more than just financial health. As stewards of an essential community asset, board members are accountable for care quality and safety, oversight of the CEO and development of senior leaders, the credentialing and performance of the medical staff, fulfillment of fiduciary and legal duties, and ensuring that the organization operates according to its mission.
Boards also must be stewards of their hospital's future—establishing the vision for what the hospital must become to continue meeting the community's needs and participating with stakeholders to develop goals and strategies to get there.
Quite a job description, and one that begs the question: Are today's board members up to the task?
As anyone who has been on a board or simply read a newspaper during the last decade well knows, boards have come under greater scrutiny. Both corporate and nonprofit failures have resulted in legislation, regulation and other efforts focused on raising the performance and accountability of governing boards in all sectors.
The governance provisions of the Sarbanes-Oxley legislation, which originally applied only to for-profit companies, have now been applied to nonprofit organizations in 11 states and counting. The AHA has convened two Blue Ribbon Panels on governance effectiveness and trustee competencies. BoardSource also convened a panel of experts to identify 12 principles that power exceptional boards. Rating agencies now include a governance assessment to determine hospital creditworthiness.
Not surprisingly, there is also a growing trend toward trustee certification. Several states have laid the foundation by establishing criteria for trustees to function effectively in their governance roles. These primarily voluntary programs have requirements that vary by state and typically rely on attestation from the hospital CEO and board chair that a board member meets the criteria, rather than on an objective verification of compliance or evidence that knowledge or skills have been acquired.
New Jersey has taken a step away from voluntary compliance by mandating seven hours of education for health care organization trustees. Other states are moving toward providing incentives for trustee education based on objective evidence of learning acquired through testing and other mechanisms. With all this activity, it's no wonder that 55 percent of respondents to the American College of Healthcare Executives' 2008 Futurescan survey believe it is likely that credentialing of hospital trustees will be common by 2013.
Clearly, the type of preparation that board members have received in the past will be inadequate to meet future needs. Preparing trustees in advance of service and securing their commitment to continuous learning throughout their years of service are emerging as a new standard for effective governance. Because governance involves more than just the board, successful education and development efforts will provide common learning experiences for trustees and hospital leaders. Finally, evidence of learning and competence will be required increasingly in a world that places the highest value on outcomes and improved performance.
Hospital boards and trustees have come a long way from the days when an open checkbook was the most important prerequisite for board service. In today's complex world, much more will be required. Hospitals and health care organizations need knowledgeable, skilled and engaged boards to address the challenges that face them. To get the "best on board" they must not only seek those trustees who are the most knowledgeable and competent to serve, but also must be willing to support them in the ongoing learning and development so essential to true governance effectiveness.
Connie Curran, R.N. (firstname.lastname@example.org), is president of Curran Associates, a health care management consulting firm in Chicago, and CEO of Best on Board, an organization that provides governance education and certification for board members.