Lead articles by James E. Orlikoff and E. George Middleton, Jr.
In this issue of Frontiers, we look at hospital governing boards and their crucial role in the success or failure of their institutions. We asked two experts in the field to share their insights and expertise on how the role of the board may be changing, given the current environment of mistrust, government oversight, and financial restrictions, and to provide recommendations and strategies for the future. In their feature articles, James E. Orlikoff, a consultant on healthcare governance serving client organizations nationwide, and E. George Middleton, Jr., a businessman who served as chair of the Sentara Healthcare board for 20 years, discuss the issues and challenges that CEOs and their boards face.
Some of the issues covered include Sarbanes-Oxley legislation, requirements for defending tax-exempt status, post-acquisition review, board compensation, the structure and qualifications of a successful board, term limits, self-assessment, ways to retain good members, and the “division of labor” between the CEO and the board. Several of the recommendations made in the feature articles may be controversial; others may work well with some boards, but not with others. However, all of the strategies have one purpose in mind: to assist in creating a governing board that will function at the highest possible level in the current environment of heightened accountability, scrutiny, and financial pressures.
For additional perspectives, Frontiers asked two CEOs and a consultant-professor team to react to and comment on the strategies presented in the feature articles. Each of the commentators agrees with many of the issues and challenges presented in these articles, and each provides additional insights and suggestions. Dennis R. Barry, CEO emeritus of Moses Cone Health System, disagrees with Orlikoff’s contention that the community-based and volunteer models of governance will not work for tomorrow’s hospitals and health systems and with the argument that board members should be compensated. He explains why in his commentary. In addition, Barry comments on the role and structure of high-performing boards and their chairs. Kathryn J. McDonagh, FACHE, president and CEO of CHRISTUS Spohn Health System, stresses the link between underperforming governing boards and poor organizational performance and emphasizes the need for revitalizing our current boards. She suggests several strategies for accomplishing this. Finally, J. Larry Tyler, FACHE, president of Tyler & Company, and Errol L. Biggs, PhD, FACHE, director of the graduate programs in health administration at the University of Colorado at Denver, offer their comments and recommendations. For example, they suggest creating a governance committee to oversee all of the issues of governance required by the federal government and other regulatory groups.
Clearly, governing a hospital or healthcare system is a difficult and demanding job, and good governance is closely related to the success of an organization. As healthcare boards enter a new era, characterized by Orlikoff as one of “heightened accountability, scrutiny, and reform,” CEOs and their boards must rise to the challenge or face some dire consequences. We hope the ideas discussed and the strategies presented here will be useful to you as you create a board that is efficient, vital, and attuned to the issues that your institution faces.
The editors of Frontiers would like to hear from you! If you have comments or thoughts about this or any issue of Frontiers, please share them by e-mailing Audrey Kaufman at firstname.lastname@example.org.