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Boards Gone Wild

Molly Rowe, for HealthLeaders Media, March 14, 2008

Whenever I hear about a board-CEO battle that ends in a CEO's dismissal, I can't help but wonder how it went so wrong. After all, in theory, CEOs and their boards are focused on the same goal: the organization's success. Shouldn't that be enough to keep the relationship together?

Apparently not. As with all relationships, personal agendas, priorities, and egos can get in the way. So, what makes the difference between harmony and horror story when it comes to hospital leaders and their boards?

As I wrote last week, a large part of the CEO's job is maintaining that board-leader relationship. CEOs might be lulled into thinking that a quiet board--a board always in agreement--is a happy board. That's dangerous thinking, says James Orlikoff, a consultant specializing in healthcare governance and a speaker at this week's American College of Healthcare Executives annual conference.

As in a marriage, there's a fine line between comfort and complacency when it comes to your board relationship, and constant board consensus can be a sign of board apathy. Good boards, says Orlikoff, are "disruptive"--meaning they argue, disagree, and debate on their way toward making good decisions.

Orlikoff has a long list of things leaders can do to ensure their boards are "effectively disruptive." Here are some of them:

Executive sessions: Most CEOs aren't crazy about executive sessions, Orlikoff says, but it's far better for the board to be able to discuss problems in its relationship with the CEO early on before those issues become bigger problems that result in CEO turnover.

Executive sessions should be regularly scheduled at the end of every board agenda with set ground rules. Nine out of 10 times this meeting will be only three minutes long, Orlikoff says, but they'll give the CEO a chance to address problems and the board an opportunity to self-correct.

Board terms: Despite the fact that the best boards function on process and principles, a lot of boards still run on personality, Orlikoff says. This can get you into trouble. For example, you love your board chair so you don't set board term limits. But a year later, the chair leaves unexpectedly and you're stuck with a bad board chair--and no limits to save you.

Board terms force organizations away from personality-driven governance, Orlikoff says. He recommends organizations begin evaluating board members the year before their terms are up for renewal. This gives board members a one-year signal to improve performance.

Mini-evaluations: Mini-evaluations are "the highest yield, lowest cost improvement you can make," says Orlikoff. At the end of every board meeting, have board members complete a quickie evaluation about the meeting, the process, and the board in general. Your governance committee (not the entire board) should review the evaluations, aggregate findings, and adjust practices. Rather than make big, sometimes painful, changes every two years, make incremental improvements along the way.

Include an outsider (or two): Most boards are made up of several linked-in, high-powered community members, but Orlikoff recommends organizations include on their boards one or two outside, independent board members. These folks don't have any social or economic pressures clouding their judgment and might be more willing to say "the emperor has no clothes" when necessary, says Orlikoff, who serves on the board of Seattle-based Virginia Mason Health System.

When an organization complains of "problem board members," Orlikoff says, it's usually a case of a problem board. As a leader, it's your job to keep your board on track. The more things you can implement now to keep the relationship strong, the better your chances of knowing your board's in trouble before it's too late.


Molly Rowe is leadership editor with HealthLeaders magazine. She can be reached at mrowe@healthleadersmedia.com.

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