Short Survey on Governance: Demographics

In December 2007, the Health Research & Educational Trust and the Center for Healthcare Governance  surveyed 249 hospital and health system CEOs about the demographic characteristics of their boards, looking at age, level of tenure, and work status of their board members.

Age

Overall, the age distribution of the board members in the health care institutions surveyed is somewhat skewed in the direction of the older age brackets with 70% of board members being in their 50s or 60s.

There were very few differences among different types of health care organizations in the average age of their board members except for the following two areas:

• Freestanding health care institutions were more likely to have a greater percentage of board members at least 60 years of age (48% of board members) than were health systems (37%) or health care institutions that are subsidiaries of health systems (36%).
• Health care institutions with a religious affiliation were less likely to have board members under the age of 40 (1% of board members) than were health care institutions with no religious affiliation (8%).

Tenure

Thirty percent (30%) of board members had more than 9 years of tenure, indicating that many boards are not following the recommended practice of limiting tenure to three, 3-year terms. Within the 9-year term limit framework, it also is interesting that there is a proportionately higher percentage of first term board members (28%) compared to second and third-term board members (42% combined). This finding suggests that a significant number of board members are leaving their boards after their first term.

Results showed differences among health care organizations in the following two areas:

• Health care institutions with at least 300 beds on average had members with longer tenure on their boards than did health care institutions with fewer than 300 beds.
• Suburban health care institutions on average had members with longer tenure on their boards than did urban or rural health care institutions. This finding is important because it suggests that rural health care institutions on average are no more likely to hold on to trustees for long periods of time.
  

Work Status

Overall, nearly three-quarters (73%) of trustees of surveyed institutions were actively working.

Results indicated differences among health care organizations in the following two areas:

• The number of beds was directly correlated with the number of trustees who are actively working, with larger health care institutions being more likely to have a larger percentage of working trustees than smaller institutions. This finding is important because it suggests that larger health care organizations on average are not more likely to rely on full-time trustees.
• Similar to smaller institutions, rural health care organizations were more likely to rely on retired or semi-retired individuals to serve on their boards than were their urban and suburban counterparts.

Current and Future Challenges

Slightly more than half (52%) of surveyed CEOs indicated that they either currently faced challenges regarding the age distribution or tenure of their board or foresaw such challenges within the next 10 years. Some of the challenges cited by CEOs were:

• Recruitment of a well-balanced board with the necessary skill sets is often very difficult in rural areas. Many rural boards cite the need for qualified board members, regardless of age.
• Recruitment of minority and female board members with the appropriate experience is very challenging for many boards.
• Board leadership is often significantly older than the rest of the board.
• It is very difficult to find individuals under 40 who will be able to make the time commitment needed to serve. These individuals often also have limited health care experience and do not have the time to devote to service. There is increased competition with other community functions for the service of these younger trustees.
  
• There is significant turnover with term and age limits for board members. The lack of experience of new board members is often seen as a bigger challenge than the aging of current board members. There are frequently no smooth transitions to the next generation of leadership. Often, a whole board will turn over in a matter of 3 to 6 years. The learning curve is steep.
  
• Older board members often lack IT experience, which can hamper the transition to Electronic Health Records. Younger board members often lack the community vision of their older counterparts.