Lawrence Prybil, PhD, FACHE
Across the country, at every level, there is a growing call for more accountability and better performance by organizational board, not just in business, but also in nonprofit organizations. This increased public scrutiny of board performance has reached the American health care system. Today it is widely acknowledged that the governance of nonprofit organizations—including hospitals—can and should be improved. The basic premise—based on a growing body of empirical evidence—is that good governance contributes positively to producing good organizational performance.
Thus it is surprising that there is very little empirical information regarding the boards of high-performing healthcare organizations and how they might differ from other boards. To address this question, we looked at a set of seven high-performing nonprofit hospitals as well as several hospitals similar in several respects but whose operating performance is mid-range. Through interviews with board members and CEOs, we probed not only the structures and practices of their boards, but also how they did the work of the board.
Boardroom Culture
One critical characteristic of any organization or board is its culture—the pattern of beliefs, traditions, and practices that prevail. For a board, questions such as how decisions are made, how members interact with each other and with management, and how information gets shared may be markers of board effectiveness in exercising their fiduciary duties.
The American Bar Association Task Force on Corporate Responsibility has expressed the view that “many corporate boards have developed a culture of passivity” and that boards “must engage in active, independent, and informed oversight of the corporation’s business and affairs, including its senior management.” The Coalition for Nonprofit Health Care has called for trustees to be “more vigorous in exercising their oversight responsibilities” and “more inquisitive on matters requiring their attention.” In a very real sense, these organizations are speaking to governance culture and are advocating for a proactive culture. As Joann Reed has expressed it:
“Good governance is hard work. Boards must develop a culture of accountability and engagement. Board leaders should pay strict attention to how much board time is spent passively listening to reports and how much time is spent discussing strategic issues and the duties of care and loyalty. Active and vigorous board discussion, debate, and questioning is not only a sign of a good board, it is the sign of an engaged board. Board members should not allow a ‘don’t-ask-questions’ culture to thrive and become the norm. An open culture of cooperation and transparency is healthy and will attract skilled board members.”
What We Found
Our interviews showed that in many ways, the high-performing organizations and the mid-range performers were similar. In both groups, neither the board chairs nor the CEOs tend to dominate board deliberations and that unanimous votes are the norm but are not universal. Similarly, attention to the organizational mission and values is a strong feature of both groups’ board meetings.
The principal differences that emerge are, first, the extent to which there is “extensive exchange of views before decisions are made” and, second, the extent to which “constructive questions and skepticism” characterize the boardroom deliberations. The interviews suggest that board meeting discourse in high-performing hospitals may be somewhat more participatory than in mid-range hospitals.
We also asked board members and CEOs to give their “candid assessment” about their board’s “usual approach to decision-making.” The results indicate that more enlivened decision-making processes may prevail in the board meetings of high-performing hospitals.
Understanding and describing the culture of any organization is complex terrain. In this study, we simply tried to get some sense of the cultures of these governing boards by seeking the opinions of board members and CEOs on a small number of questions. More detailed inquiry would be required to thoroughly understand the cultures of the boards, individually and as groups. That said, this study suggests that, on the whole, the prevailing culture of boards in high-performing hospitals is more proactive and interactive than that of mid-range boards.
For a full report on this study’s methodology, findings, and conclusions, see L. Prybil, R. Peterson, J. Price, S. Levey, D. Kruempel, and P. Brezinski, Governance in High-Performing Organizations: A Comparative Study of Governing Boards in Not-for-Profit Hospitals (Chicago: Health Research and Educational Trust, 2005).
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