Donald Wegmiller, president and chief executive officer of HealthCare Compensation Strategies, Minneapolis, and Richard Gustafson, managing partner of the healthcare practice of executive recruiter Heidrick & Struggles, Chicago, will co-present "Effective Governance through Trustee Professionalism and Appropriate Compensation" at the ACHE forum from 10 a.m. to 11: 15 a.m. and from 2: 15 p.m. to 3: 45 p.m. March 26. The morning session is open to CEOs and presidents only.
Gustafson will focus on the differences between the volunteer health system board--the more traditional governance model in which members of the community serve as trustees-and the newer, professional board. The latter tends to emulate the boards of publicly traded companies, in which trustees are recruited specifically for individual skills and talents and may not reside in the system's service area. Professional boards also tend to be smaller, often having fewer than 10 trustees. Gustafson also will discuss how the boards may differ in terms of accountability.
"We don't intend to recommend one or the other but just to indicate a movement is taking place and maybe healthcare systems should take a step back or two," Wegmiller says. "The session is intended to spark debate and encourage people to examine the idea."
Wegmiller will tackle compensation issues, particularly as a tool to motivate and retain professional trustees.
"We'll talk about the issue of whether or not to compensate. It's a very sensitive and delicate subject," Wegmiller says. He adds that healthcare organizations need to determine whether their boards should be compensated, whether the additional public scrutiny can be tolerated, and whether paid trustees still enjoy charitable immunity, the legal protection from litigation that covers many voluntary trustees.
Studies by Wegmiller's firm indicate that more hospital systems are compensating trustees. According to a survey of 21 of Wegmiller's clients who pay trustees, the median compensation-including per-meeting retainers and additional fees for special services and serving on committees-is $21,750 per year.
Wegmiller will discuss ways in which trustees may be compensated, either in cash, through deferred payments, or even via retirement plans or life insurance policies.
"Sometimes a study is performed about median pay for the geographical area, and the decision to pay is based only on that," Wegmiller says. "That's not the way to go."