Boards of for-profit healthcare companies are more likely to conduct evaluations of trustees and chief executive officers than boards in other industries.
The findings are part of a new survey by Korn/Ferry International, a New York-based executive search firm.
The survey showed that 87% of healthcare boards evaluate CEO performance, a 9% increase from 1994. The average for all companies is 78%. The survey measured responses from 1,000 companies, including 56 from healthcare sectors such as pharmaceuticals, medical device manufacturing and hospital management companies.
"Shareholders increasingly are demanding performance evaluations for both the board and the CEO," said Stephen Israel, co-managing director of Korn/Ferry's pharmaceutical and medical products specialty practice. "The healthcare industry has taken a leadership role in responding to these demands."
Healthcare companies also are increasing the number of "insider" directors, or people with ties to management, while industry in general is decreasing insider representation. The average board size for all companies, including healthcare, is 11 members. Healthcare boards average three insider directors, compared with two in 1994, the survey said.
In addition, 33% of healthcare boards appoint nonexecutives to the chairman position as opposed to 19% in general industry, the survey found.