"The data are very clear that the demographics of boards is clearly one of the ongoing challenges hospital boards need to address," said Debra Stock, AHA vice president of trustee services. She said the AHA recently formed partnerships with the National Urban League and UnidosUS to increase participation of African-Americans and Latinos on hospital boards.
Overall, the survey showed that hospital boards are making some progress in implementing state-of-the-art practices such as restructuring to improve governance. But industry leaders question whether boards are moving fast enough to keep up with rapid changes in the healthcare system and U.S. society.
In a commentary included in the AHA report, Nicholas Tejeda, market CEO of the Tenet Healthcare Corp.-owned Hospitals of Providence in El Paso, Texas, said the increase since 2005 in female membership on hospital boards from 23% to 30% isn't good enough.
"It seems we can do better to ensure our boards better represent patients who come through our doors," he wrote. "Considering that the majority of a hospital's workforce is female, we must focus our efforts to identify and develop women leaders for roles in governance."
And despite the aging of board membership, only 27% of survey respondents said their organizations are making focused efforts to engage the millennial generation—people born between 1982 and 2000—in governance.
"Succession planning is key to the long-term success of any organization, and governance is certainly no exception," Tejeda wrote. His organization formed a Young Leader Advisory Group that already has produced new board members including a board chair-elect.
Orlikoff said that failure to implement generational change in governance could threaten hospital survival. "Boards are disproportionately composed of baby boomers who are retiring, dying or becoming mentally incompetent," he said. "That poses a serious risk to healthcare organizations."
A more encouraging finding from the survey is that nearly two-thirds of hospital boards have engaged in restructuring to improve governance over the past three years. They sought new board member skills and competencies, added or reduced committees, redefined authority among system and subsidiary boards, and reduced or expanded membership size.
Stock said boards are carefully balancing the need to keep experienced members with unique skills and knowledge with the need to bring in new members who are younger and have different skill sets.
Despite the move toward restructuring, a significant share of hospital boards retain a structure of powerful executive committees that some experts consider perilous. The survey found that 30% of all hospital boards, including 52% of system boards, give their executive committee broad authority to make decisions on behalf of the full board.
Orlikoff said that giving executive committees that kind of authority creates a board-within-a-board structure, and can lead to disastrous decisions, as in the Allegheny Health, Education and Research Foundation bankruptcy in the late 1990s.
"That's not good governance," he said. "You can have insider and outsider groups, and there are many cases where the dominant executive committee has made decisions throwing an organization into turmoil."
He and other experts said the survey shows that while some hospital governance trends are moving in the right direction, bad habits persist.
"Survey findings suggest that in some areas, boards may be changing their practices more slowly than is optimal for a sector facing rapid, transformational change," wrote Mary Totten, president of governance consulting firm Totten & Associates and a commentator for the survey.
