The requirements for governance have become more stringent and the work of being a director has become more demanding. Clearly, boards need to be more informed about a whole variety of areas of finance, of quality, of human resources, of technology, of how they play together. Boards need a more sophisticated and diverse understanding of the communities they serve from all ages and genders and ethnic groups. Putting together this almost magical team of skills, talents and perspectives on a board becomes something that can’t be left to serendipity . . .” (Barry Bader, Bader & Associates)
A recent Special Comment from Moody’s Investors Service noted that strong oversight and strategic guidance by a hospital’s board is imperative, “yet many not-for-profit boards find it difficult to recruit experienced and expert members capable of guiding management well . . . Improving a hospital board’s understanding of the changes that the industry is facing is a fundamental characteristic of better governed organizations. Many hospitals will likely need to add new board members with expertise in investments, consolidation and compliance backgrounds.”
(Moody’s Investors Service Special Comment: Doing More with less—Credit Implications of Hospital Transition Strategies in Era of Reform. May 2012)
Recruiting qualified and committed people to serve on the hospital/health system board is one of several steps to ensuring an effective board. The group of people sitting around your boardroom table should not only be knowledgeable, experienced and committed to serving the organization as volunteers, they also must be open to hearing different points of view; to gaining new information to keep abreast of industry happenings; to working collaboratively with their fellow board members and executive management, and working together as a team. The board is a unique, elite group of individuals who are highly sophisticated and experienced and who have a broad array of knowledge in their own worlds. Putting together the right mix of these individuals requires attention to a variety of components for the recruitment process.
The iProtean course Recruitment & Orientation offers a detailed look at how to recruit and orient new board members so the board as a whole functions at least as well, if not more effectively over time. Barry Bader, Lawrence Prybil, Ph.D., and Anne McGeorge provide an overview of board recruitment, board size and composition, characteristics of good directors, board leadership, terms and term limits, and board orientation.
Lawrence Prybil, Ph.D.
When we think about a board and the current array of people serving on that board, one’s mind moves to, “Well, how did they get there, and how will others get there in the future?” One facet of board development is board succession planning. And that means thinking about the talent we have, the talent we need, and how to recruit people who will provide those competencies to complement the competencies we have. How does all that happen? Well, it’s not going to happen by itself.
In today’s world there is growing awareness among most boards that the whole board nomination process needs to be thoughtful and intentional. In my work with boards and the boards where I serve as a board member, I have seen a ramping up of the visibility and recognition that doing that these things well—nomination, appointment, orientation—is one of the key determinants of effectiveness of the board.
Barry Bader, Bader & Associates
. . . attribute-based selection of board members . . . means that a board, usually through its governance and nominating committee, says, “What, in fact, are the areas of knowledge and skills, and what are the individual traits, the personal traits and behaviors that we are looking for from directors? Let’s identify them. Let’s share that with all the members of the board. We will make everybody on the board, as well as our physician leaders and our management, potential board recruiters to identify people who fill these skills and talents.”
Governance committees can then develop a long list of potential individuals, can refine that into a short list of the most highly qualified, best prospects for the vacancies that are foreseen. Then, they can have those people come in for an interview, vet their backgrounds and make a more informed choice for ultimate election to the board.
Anne McGeorge, Grant Thornton
. . . best practices include identifying a particular area of expertise among the existing board as one that the board would like to expand or fill. For example, a CPA might be needed or an auditor might be needed to fill a spot on the audit committee or as the chairperson of the audit committee; likewise with an investment person chairing an investment committee or an attorney for general expertise for the board.
Barry Bader, Bader & Associates
Characteristics of a good directors: The most important characteristic that a board member needs is what I’ve heard called “governance temperament”—directors or trustees who just naturally by their personality or by their experience understand innately the difference between governance and management. They know how to stay at a high level; they know how to be visionary. They know how to inspire and motivate and constructively challenge management and physician leaders without becoming confrontational. They know how to disagree without being disagreeable . . .
This can be supported through board education but, frankly, people either have it or they don’t when they walk in the boardroom. The trick is to know it before you nominate an individual to be on a board and not to learn about it only after the fact . . .
Lawrence Prybil, Ph.D.
The leadership of the board and board committees is part of board development and succession planning. I like the idea of very deliberate thinking about succession planning. That is a sign of a healthy board . . . We should be thinking about how to prepare people for leadership roles, and having dialogue with them about their level of interest or willingness to consider a leadership role.
Barry Bader, Bader & Associates
If I come onto the board as a new director, what do I need to know, what do I want to know? First, I want a clear understanding of what you expect from me. What is my role; what are my responsibilities on this board? . . .
Increasingly hospitals and health systems are viewing orientation as a year-long process that needs to be individualized for each board member. A board member who comes in with a finance background just needs a little bit of knowledge about healthcare finance but probably a lot of information about clinical care and quality. On the other hand, a physician who may have been through a number of medical staff positions probably has a pretty good understanding of quality and credentialing, but much less understanding of hospital finance. So orientation should be individualized . . .
A significant part of orientation will be done within and by the organization, but one part of it also ought to come from outside the organization, where a new director participates in an educational conference or orientation provided by some national group, where they may read materials by governance and healthcare experts.
The job of being a director is extremely challenging, increasingly complex. Orientation therefore needs to be equally comprehensive and come from a variety of sources.
Well-rounded orientation is going to produce a more well-rounded and better-equipped board member.
For a complete list of iProtean courses, click here.
iProtean Symposium & Workshop
Mark the Date!! October 10 – 12, 2012 at The Lodge at Torrey Pines, La Jolla, CA. Faculty: Barry Bader, Monte Dube, Esq., Lisa Goldstein, Dan Grauman, Marian Jennings and Brian Wong, M.D. For more information, click here.
For more information about iProtean, click here.