The storm of controversy that engulfed the St. John Hospital and Medical Center board of trustees last year has yielded to a rainbow.
A power struggle with strong racial overtones that erupted over the selection of the 737-bed Detroit hospital's new president ended with the facility's being governed by the most diverse board in the facility's history. Of 10 new trustees appointed in October 2000, four are African-American, bringing the total to five on the 21-seat board. Five of the new trustees are women, bringing the total number of women on the board to seven.
The new trustees possess a variety of skills. Their jobs range from chief executive officer to accountant to high-ranking city official.
"The hospital had already pledged to place more minorities on its board, but the events of (the past year) accelerated the process," says St. John President Tony Jones.
The wrangling over Jones' hiring and the selection of a new board chairman last year resulted in the resignations of 10 trustees between May and August 2000, including two of the board's three African-Americans and one of its three women. The resignations began when the board secretly voted last April to appoint acting President William Leaver as its new president. The elevation of Leaver, who is white, overruled the recommendation of St. John's own search committee, which had selected Jones, then chief operating officer of 558-bed St. Francis Hospital in Memphis, Tenn. The hospital's corporate parent, St. John Health System, overruled the board vote and installed Jones.
Two African-American trustees resigned last August when a white candidate was appointed the board's chairman over another candidate who is African-American.
That so few African-Americans served on the board of the largest hospital in a city that is 75% black had been a sore point even before the board upheaval. St. John had pledged to community groups in 1999 to appoint more minority trustees and executives. Last year's en masse resignations created even more determination to follow through, according to Jones.
"I know for a fact that you can find diverse board members with all the right skills," says Jones, who participated in the recruitment of new trustees. A problem to overcome was the reluctance of some prominent members of the community to serve on a board connected to such turmoil. "I think it's extremely important that every hospital build a certain image in the community and build trust. I'm spending a lot of time in the community, working to ensure that the hospital has an outstanding image," Jones says.
Few other hospital boards are enjoying the same swift shift toward diversity. Although governance consultants say hospital boards are growing more sensitive toward the issue, they still remain overwhelmingly white, middle-aged and male. Although 46% of hospital systems surveyed in 1999 had a minority board member, minorities constitute just 6% of all board members, according to the Governance Institute, a La Jolla, Calif.-based consulting firm. Although those figures are higher than the 4% for minorities who held seats in 1997, the 23% for women has remained unchanged since 1997.
"Despite the demographics, there is a growing self-awareness among boards that they should try to reflect the community as a whole," says Ed Kazemek, CEO of Accord, a Chicago-based governance consulting firm.
According to most governance experts, boards talk a good game about wanting to recruit minority board members but often struggle when nominating time rolls around.
Although Dennis Pointer, CEO of Dennis D. Pointer Associates, another La Jolla-based governance consulting firm, calls the St. John's experience a bellwether, he's unsure how long it will take for other hospitals to take action.
"I wouldn't say it's on the front burner, or the back burner," says Jim Rice, president of the Governance Institute. "I would just say that that issue is moving along."
Pointer notes that one of the big problems is that boards tend to be self-perpetuating: The middle-aged white men serving on boards feel comfortable nominating others like themselves. Another issue is the movement toward recruiting new board members who possess precise skill sets believed to add strength to the governance process.
"What most boards struggle with is, they might be looking for someone who is female, African-American and who lives in the community. But they also need someone who is an information systems expert," says James Orlikoff, president of Orlikoff and Associates, a Chicago-based governance consulting firm. "If they find someone who matches all the criteria except the professional experience they're seeking, then they have to debate whether this would be the right appointment."
The constituency trap
Yet another issue is the movement away from what is called representational governance-a board on which every constituency has a seat and a say. Although it sounds nice on paper, governance experts say it can cause a fragmented board that has difficulty making tough decisions on a timely basis.
"There is a movement to reduce the number of boards and people on boards. The trend is to avoid quotas and appoint the smartest people possible to represent the overall needs," Rice says.
What a smart, progressive board does is engage in what Orlikoff terms profiling: basing the nominating process on detailed descriptions of the board's current composition against its future needs. Boards that don't engage in self-profiling risk a blowup similar to what occurred at St. John, he adds.
For the moment at that institution, though, peace and collegiality are reigning, Jones says. Today, he says, the board is dedicated to making St. John the best hospital in Michigan within three years and the best in the country within five.