A board’s makeup changes every few years, and boards are currently undergoing a slow shift in how they recruit members, with a growing emphasis on what governance experts call “competency-based recruitment.”
That involves recruiting trustees with skills that members believe will help to provide better insight and advice on organizational strategy and decisions, said Amanda Berra, a senior research partner at the Advisory Board. In healthcare, that might include recruiting members with expertise in workforce management, technology deployments, retail and hospitality, or risk management and actuarial experience.
“There has been a slowly percolating movement away from the old-school way of putting people on boards,” Berra said. That “old-school” mentality often meant members nominating others in their circles. Now, boards are paying more attention to core competencies and diversity, she said.
Last year, 42% of hospitals and health systems reported that their selection committees used an approved set of competencies to select board members, according to the American Hospital Association’s most recent National Heath Care Governance Survey Report. That’s up from 35% in the AHA’s 2014 survey.
However, health systems were much more likely to indicate using competencies for member selection at 64%, compared with subsidiary boards (46%) or free-standing hospital boards (28%).
It’s challenging for healthcare organizations to find experts in complex topics like population health and value-based care to serve on their boards, and it’s no easier for small and midsize hospitals and health systems, which tend to appoint more community representatives.
Recruitment for those experts is an industrywide challenge, with many hospitals of all sizes and locations struggling, said Pam Knecht, CEO of consulting firm Accord. “Every sophisticated board I know of is trying to add people who can bring population health and value-based payment expertise to their discussions,” Knecht said.
That overall uptick in boards honing in on core competencies dovetails with an expansion of the board’s responsibilities.
Two decades ago, boards primarily focused on checking the hospital’s margin and revenue, said Beth Daley Ullem, governance expert at the Institute for Healthcare Improvement.
Now, she said boards are also overseeing quality of care, including not only inpatient safety but systems of care that extend beyond the hospital and improve health equity. There’s been “an expanding scope of responsibility for boards,” Ullem said. “It’s become quite complex governing all those dimensions of quality.”
Perhaps as a result, more health systems compensated board members last year: 25%, up from just 8% in 2014, according to the AHA’s survey.
However, the majority—87%—of hospitals and health systems still don’t compensate board members. That trend has remained constant over the past few years; 88% of hospitals and health systems indicated they didn’t compensate board members in the AHA’s 2011 and 2014 surveys.
Board members with business, technology and workforce expertise can provide a strong backbone for difficult decisionmaking—but without a strong foundation in healthcare as well, board members may be left confused about how their backgrounds intersect with the hospital business. While most hospitals offer new board members a comprehensive orientation, including meetings with the CEO and tours of the facility, organizations have been hesitant to require ongoing education for members.
Only 29% of hospitals and health systems said they required continuing education for board members last year, according to the AHA’s survey.
Hospitals might feel uncomfortable mandating education, Orlikoff said, in part because board members tend to be busy and mostly volunteers. But that lack of up-to-date education poses specific challenges when weighing the pros and cons of programs that can confuse even seasoned industry leaders.
“Experts cannot agree on what they mean, let alone board members,” Orlikoff said of population health and value-based pay. He said St. Charles Health, the system where he serves on the board, has a mandatory continuing governance education program for board members.
Hospitals shouldn’t tell “the big lie”—that being a board member is just going to meetings.
“Really good boards will say, ‘Here’s how much time it takes to be a board member; here’s how many hours a year it’s going to take you to be a board member,’ ” he added. “That includes preparing for meetings, attending meetings, following up after meetings and continuing education.”