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Principles and Best Practices for Effective Governance
The trustees of one health system were divided over how to structure the board. Some favored proportional representation from its acute care, nursing home and elder services divisions; others wanted all at-large members with no interests to promote.
The CEO of another health system had restructured so facility executives were directly accountable to corporate management for finances and operations. He wanted local boards to focus on strategic direction and oversight of quality, but local boards continued monthly monitoring of finances as they’d always done. Some trustees wondered what their role was.
Red Rules for Boards
In industries where safety is critical and quality must come first, such as airlines and nuclear power, “red rules” refer to protocols that must be followed “to the letter” – all work stops until they are. A commercial airliner doesnʼt leave the gate if the pilot spies a possible leak or flat tire; a nuclear plant operator or even a Toyota assembly line worker can “stop the line” when he spots a critical flaw.
Distinguishing Governance and Management
“What is the difference between governance and management?” is by far the question that not-for-profit executives and directors ask most often. Effective boards understand the difference between governing and managing; dysfunctional boards do not.
Top 10 Principles and Practices of Great Boards
Great organizations have great leadership— at the top and throughout their ranks.
Minding Your Manners
The relationship between boards and chief executive officers can be fraught with challenges, and trustees often are unsure of how to handle certain delicate situations. But using a framework of etiquette can provide guidance.
Building a Lasting Impression
When someone walks into your hospital, his first impression is created by the physical architecture. But his lasting impression — and what he is most likely to talk about when he returns home — will be determined by what we call the “invisible architecture” of core values, organizational culture and behavioral expectations.
Getting Ready to Govern
Don’t overlook the importance of CEO-board etiquette — it’s a pillar of good governance. The relationship between boards and chief executive officers can be fraught with challenges, and trustees often are unsure of how to handle certain delicate situations. But using a framework of etiquette can provide guidance.
The Importance of Board Member Relationships
Throughout my years of serving on boards, I typically have done so as an outside trustee, someone who brings knowledge about health care issues in general and about governance in particular, to the board table. Boards composed primarily of community members, as hospital boards traditionally have been, often incorporate outside trustees within their membership to bring a fresh, external perspective into board discussions.
Engaging Millennials in Governance
Because of this generation’s size and increasing influence, Millennials are being surveyed and studied to better understand what makes them tick and how they may play a role in fundamentally reshaping how we live, work—and govern—our organizations.
Power of Education
The rules of engagement for board members have changed dramatically. Historically, the trustee position was honorary; today, trustees are expected to interact more with management and the community and know more about operations.They also have added accountability for legal and regulatory matters. As this role grows in complexity, hospitals are challenged to prepare and educate board members efficiently to be effective fiduciaries without overwhelming them.