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Governing Boards Must Align Skills with Need

 |  By Philip Betbeze  
   July 06, 2012

In an environment of extreme ambiguity, hospital and health system board members need a wealth of diverse experience and skills to navigate a business environment as uncertain as any healthcare has ever seen. A premium is being placed on strategy and policy experience.

Consolidation within the industry leads to often-complex and political board recomposition dilemmas. Heavy investments are being made in technology and informatics, and in many cases, that's a skill set that's underrepresented on many boards, given the size and scale of those investments.

Further, many hospitals and health systems are undergoing a rapid restructuring of business units due to the changing dynamics of reimbursement. And finally, there's the renewed focus on quality, which Jim Gauss, chairman of board services at Witt/Kieffer, says, "is no longer a nice-to-do but a must-have."

The list of evolving responsibilities facing hospital and health system boards could go on and on, but Gauss says boards are having a tough time keeping up with the rapid pace of change.

"There used to be three to five people in established leadership roles on boards, and the thinking was that the others could be trained up, but that's no longer the case," he says. "There's a lot written on competency models for boards, and looking at those very carefully, they're frankly looking a lot different than current membership."

A legacy of self-nominating
That's a legacy of many hospital boards being constituted from a self-nominating process, and largely made up of community members who were willing to serve—not based on the skills needed for a complete board to do its job of leading the organization based on industry knowledge.

Not surprisingly, big, regional health systems are far more advanced than standalone hospitals in evolving their boards based on narrow skills sets, not only because they have a richer pool from which to draw, but also because the prestige level may be seen as higher.

Also, though unheard of in the past, some nonprofit hospital boards are at least considering paying their board members a small stipend.

You can't change those variables, but Gauss argues that small systems or standalone hospitals hamstring themselves in other ways that are addressable. "Even in communities where there are good members representing broad disciplines, there are still areas of expertise that are missing, such as technology and quality," he says.

Sometimes, it's helpful to have a few voices on the board from outside the area, for example, and areas where there is a shortage of local talent may be good opportunities to add people from outside the region who may be recognized experts not serving on a board in their local, more skills-rich area.

 

"That's why they need to plan meaningfully so they can identify skills where they need to go out of the local area, which may require bylaw changes as well," Gauss says.

Widen the net
Given that most of these positions are unpaid, it can be a hard sell, however. The best way to attract those kinds of members is to widen the net, Gauss says. For instance, while the pool of recognized experts in any one discipline is shallow, there are unattached experts.

"So you can't get Don Berwick, but there are lots of his disciples who would be willing to do this," Gauss says.

How do you go about it?

Gauss recently worked with an academic medical center that was reconstituting its board. They started by developing a grid of competencies, tailor-made to the hospital's needs and interests.

"Once we did that, there's no question the candidate pool was narrow, but by being narrow, it made the recruitment much easier in terms of explaining why that person's level of expertise was needed on this board," Gauss says.

 

And time may be short, because hospitals and health systems will have to become more nimble than ever before.

"High-performing boards in healthcare will separate the winners and losers, just like in corporate America," says Gauss. "There's a talent war out there, and it starts with the board. This is happening. It's not a hypothetical."

Philip Betbeze is the senior leadership editor at HealthLeaders.

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