Building Better Boards
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Right mix and size
As a longtime Bay Area venture capitalist who has served on various for-profit boards over his career and on John Muir Health's for seven, David Goldsmith may be better prepared than most to help lead his board and advise senior management. But in light of the changes facing his board at the Walnut Creek, Calif.–based system that includes a 572-licensed-bed trauma center, another 313-bed medical center, and a 73-bed psychiatric hospital, he remains humble.
"I've been in healthcare for 40 years, but I'm still learning," he says.
John Muir Health's board, at 19 members currently, has a wide mix of backgrounds and expertise. Eight are physicians who are nominated by the medical staff and by their medical groups at each of the system's two hospitals and whose terms are limited to nine years. The rest of the board is made up of community members of all stripes. As it serves a culturally and racially diverse population, Goldsmith says the board is careful to look at racial and gender diversity in addition to seeking out particular skills and perspectives the organization may lack.
But it may be too big. It can be tough to manage board composition when the somewhat competitive goals of community representation and range of expertise conflict.
"The literature on boards says you should be in the single digits," he says. "Seven or nine is the ideal number. We're in the high teens, which does put a lot of people in the room at the same time."
There is disagreement on ideal board size, though.
"We have 23 or 24 board members," says David Atchison, board chairman for 259-bed Elmhurst (Ill.) Memorial Healthcare. "Good governance would suggest we should have a 13- or 15-member board."
Regardless, both board bosses would prefer a smaller group than they have.
Balancing size and levels of expertise can give healthcare board chairs headaches.
Given the size of the John Muir Health board, Goldsmith says they have not as yet used executive recruiters to help find board members with certain skill sets, but that he has used them in the for-profit realm and would not rule it out.
"The risk in not doing it is that we tend to hear only about potential board members who look a lot like ourselves," he says. "We have talked about it, but I think in order to get a more diverse board, we may at some point turn to one of the recruiting firms."
The board at CaroMont Health, parent of 435-bed CaroMont Regional Medical Center just outside of Charlotte, has a more reasonable board size, according to the experts, but maintaining a board of only 14, 13 of whom are appointed by county commissioners, leaves little space for recruiting some of the expertise that Board Chair H. Spurgeon Mackie Jr. feels will be necessary to meet the goals of healthcare reform, among other strategic imperatives.
"We've given some thought to maybe expanding the board by maybe a couple more spots," says Mackie, an executive vice president with IberiaBank. "We've thought about allowing a couple of them to be from outside the county, partly because we have minor operations outside the county," and partly to find expertise that might not be available so close to home , he says.
Filling holes in expertise and skill
Especially in a community hospital environment, qualifications for membership on healthcare boards have traditionally been minimal. The most important aspect was always that the board reflected the community and had diversity of background and skills. That's no longer enough, say experts. By necessity, healthcare boards are becoming more thoughtful about how they recruit new members.
For example, recruitment for the board at Elmhurst had always been through word of mouth, with an emphasis on geographic representation in the service area, says Atchison, whose day job is president and CEO of Ponder & Co., an independent healthcare-focused financial services provider based in Chicago. Recruitment there has now become "more refined and thoughtful," he says.
"Now, we're looking for certain skill sets to complement the existing trustees, and it's important that we have physicians and other allied health representatives on the board," he says. "That said, we are more or less a typical community hospital board with people who have participated for a number of years, are civic leaders, and are interested in healthcare."
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