The Governance Challenge

Transcription

1 Via Healthcare Consulting 2016 All Rights Reserved Governance Essentials for Highly 1 2 The Governance Challenge There is no other group than the trustees, both deeply concerned and yet above the fray, to insist on the clarification of mission; to monitor institutional progress; to protect the integrity of the institution. John W. Nason The Nature of Trusteeship (760) kbass@viahcc.com 1

2 3 Fiduciary Definition A person who holds something in trust for another; trustee. A fiduciary guardian for a minor child Webster s New World Dictionary Fiduciary Duty of Oversight Develop the mission and set strategic direction Establish policies, norms, and procedures Carefully select competent CEO Delegate work to CEO Monitor performance of organization and CEO 4 (760) kbass@viahcc.com 2

3 5 Three Important Notes 1. Boards only have authority when meeting as a board (not as individuals or sub sets) 2. Boards must speak with one voice 3. The Board s primary contact and only employee is the CEO Legally Mandated Fiduciary Duties 6 Care The board must be knowledgeable of all reasonably available information and act with appropriate prudence and care. Loyalty Obedience The board must ensure that the organization is obedient to its central purposes as described in its articles of incorporation and the mission. Discharge duties unselfishly, to benefit only the corporate enterprise and not the directors personally. This means directors must: 1. Disclose situations with potential for conflicts. 2. Avoid competition with the organization. 3. Refrain from discussing confidential board business with others. (760) kbass@viahcc.com 3

4 7 Will Our Board Be Held Liable? Not if the decision: was made in good faith, where the trustee is disinterested and reasonably informed, and the trustee believes that the decision is in the best interest of the corporation. One Key Suggestion: Start every meeting and conversation with a review of the mission Conflicts of Interest 8 Exist on all boards; not bad per se A matter of law Can be addressed by clear policies and procedures: Annual disclosure Written policy / process Minutes document attendance and votes (760) kbass@viahcc.com 4

5 9 What s Confidential? (a partial list) Medical Staff appointments/reappointment and disciplinary action Data about clinical services and patient care, malpractice information, actual or threatened litigation, and sentinel events Information relating to individual patients such as medical records, billing or financial data Hospital s confidential business and strategic plans Performance of executives including evaluations, compensation, contract and employment conditions All discussions in closed session The Health Insurance Portability and Accountability Act (HIPAA) and You Hospital board members are required to comply with the Health Insurance Portability and Accountability Act (HIPAA). It is illegal to discuss patient information outside of certain types of closed meeting sessions. In other words, neighbors and friends may gossip about someone s hospital stay but board members may be breaking the law to do so. 10 (760) kbass@viahcc.com 5

6 11 The Hospital Triad of Authority The Board of Directors Administration The Medical Staff Every Board Has Three Primary Roles 12 Policy formulation Decision making Oversight (760)

7 Six Key Responsibilities of Boards 13 Set Strategic Direction Quality and Safety Oversight Financial Oversight Management (CEO) Oversight Advocacy Governance Effectiveness The Distinction Between Management and Governance 14 NIFO and GEPO are guidelines for effective boards We approach management and governance with the N I F O principle: Nose In, Fingers Out... James Marley, Chairman PinnacleHealth System, Harrisburg, Pennsylvania Savvy boards follow the GEPO rule: Good Enough Press On. Barry S. Bader, publisher of Great Boards (760) kbass@viahcc.com 7

8 Governance vs. management How to tell them apart Governance Exercising accountability by setting goals, making major policy and strategy decisions, and overseeing implementation Management Delivering results by implementing policy and strategy as set forth by the governing body, managing operations, and reporting on performance 15 Questions to Help Clarify Roles 1. Is it big? 2. Is it about the future? 3. Is it core to the mission? 4. High level policy decision needed? 5. Is a red flag waving? 6. Is a watchdog watching? 7. CEO wants/needs board s support? Note: If the CEO asks the Board for advice on a management issue, the CEO should declare that intent, and be responsible for bringing the Board back up to governance 16 (760) kbass@viahcc.com 8

9 Board Chair s Role Help the board prepare Create a great agenda Work through tough issues Stay at governance / strategic level Advise the CEO if asked to play that role Facilitate a productive meeting Ensure the board and its committees are effective and efficient Develop a healthy board culture Note: Board Chair does not normally have any special authority 17 Optimal Board CEO Relationship Agree on the Board s role and responsibilities in general Agree on a governance philosophy the desired interaction between the Board and the CEO Write down the agreements in formal Board policies and procedures Develop written job descriptions for Board members and CEO Evaluate the CEO s performance at least annually and set goals for individual and organizational performance 18 (760) kbass@viahcc.com 9

10 Governance Essentials for Highly Team Behaviors Understand the difference between a work group and a team strive to be a team Realize individual board members have no power: you re all in this together Hold each other accountable for agreed upon behaviors Spend time cultivating individual relationships 20 Board Culture Matters Most We ll be fighting the wrong war if we simply tighten procedural rules for boards and ignore their more pressing need to be strong, high functioning work groups whose members trust and challenge one another and engage directly with senior managers on critical issues. Jeffrey Sonnenfeld, What Makes Great Boards Great, Harvard Business Review (760) kbass@viahcc.com 10