Monday, July 28, 2008

In need of treatment: some research on boards at poorly performing hospitals

I recently came across some American research on hospital board dynamics published by Trustee magazine. Too often auditors and consultants focus on governance processes when the best processes in the world will fail if the governance dynamics and behaviours are weak.

The American study compared between high (financially) performing organisations and low performers. It certainly found differences in board dynamics indicating that effective governance improves organisational – as suggested by some British research that I outlined here.

In its conclusion, the report noted the importance of:

1) The roles played by management and the board
2) The inclusiveness of all board members, not just a small subset, in the decision-making processes
3) The usefulness and transparency of educational guidance and information
4) The level of respectful disagreement among trustees
5) The board chair’s role and his or her dedication to performing it.
6) If the answers to these questions suggest that your board’s dynamics need improvement, it might be time to talk with the chair or to form a coalition of board members who will seek outside, independent help—such as a governance consultant.

It is worth also hearing some of the observations and comments from board members at poorly performing organisations. These may have a degree of familiarity for many board members who do not think their organisations have governance “issues”:

"Some members were encouraged by the CEO to intervene in operating decisions rather than strategic ones, while others failed to ask the CEO tough questions. "

"Board meetings ran anywhere from three to four hours; every operational detail was discussed. It went on and on with lots of socializing and stories among the 25 or so people in attendance. Governance was a social event. "

"There were a lot of people who were not serious about showing up and participating and being informed."

"The [strategic planning] process begins with management deciding what is needed. Usually, by the time management brings something to the board, [they] feel very strongly about what should be done … In my view, as a board member, either you trust management or you don’t."

[The] board members of low-performing hospitals described their information packets as unorganized. One board member called the pre-meeting packet “just a bunch of stuff not linked together.” Another described it as “thick, but containing only six or seven pages of useful information.” Some even described part of the information they received as incorrect. Board members at low-performing hospitals consistently expressed concern about the totality and timeliness of the information they received. Others complained of receiving important supplemental information without sufficient time to consider it—for example, receiving information at a board meeting and being asked to vote on a related decision at the same meeting.

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