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Follow best practices in board governance

July 27, 2015
by Joanne Sammer
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Given the enormous changes going on throughout healthcare, behavioral health organizations will be relying on their boards of directors for leadership as well as a host of new and expanded responsibilities. Proper governance can help boards position the organization for success in this changing environment.

 

1. Choose your board members carefully

Behavioral healthcare is becoming more complex thanks to policy changes at the national and state level. Therefore, organizations must ensure that their board members have the skills and knowledge necessary to navigate the new healthcare landscape. Look for hard skills and expertise in areas such as technology, human resources, risk management and medical practice management.

“Not-for-profit boards need to move away from the ‘any willing director’ mentality,” says Ann Borders, president and CEO of Cummins Behavioral Healthcare in Avon, Ind. “Instead, they need to make a conscious decision about the expertise and skills needed on the board.”

To that end, the Cummins board has created a board profile matrix that shows the skills and knowledge the organization needs, such as legal, accounting and executive management, and which current board members provide that expertise. This way, when filling a board vacancy, the board has a visual tool to highlight knowledge gaps.

Potential board members might also be individuals who have access to potential donors, demonstrate political savvy, and have an understanding of mergers and acquisitions. As budget stress pressures smaller groups to merge, a board that can navigate the process will be invaluable.

 “This represents not just a commitment to the organization’s mission but a different level of attitudes and aptitudes and skill sets and understandings,” says Herb Paine of Paine Consulting Services in Phoenix that advises not-for-profit organizations.

Paine says a board appointment should not be viewed as “a beauty contest” or an opportunity for someone to build up a resume. It takes commitment to the organization’s goals.

 

2. Increase board diversity

Along with diverse skills, boards also need diverse perspectives. Recruiting from the personal or professional networks of current board members is likely to create an echo chamber of similar types of people who all move in the same circles.

Lynn Shapiro Snyder, a member of law firm Epstein Becker & Green in Washington, D.C., suggests increasing gender diversity by ensuring at least three men or three women are present on any board.

“One person’s voice will not be heard, two cancel each other out, but three can be effective,” Shapiro Snyder says.

Reaching out to younger people as potential board members can also bring different perspectives. Most younger professionals are eager to contribute and will be ready to champion new ideas.

“Why make them wait until they are nearly retirement age to join?” she asks.

Yet, increasing diversity does not necessarily mean increasing board size. In fact, it is better not to. Keeping the board small with 10 to 12 individuals leads to more effective and strategic conversations, according to Paine.

“Nonprofits often want to populate the boards with as many members as they possibly can, but that is really not prudent,” he says.

To balance the need for both fresh perspectives and continuity, Paine suggests that boards either impose term limits on their members or create three-year terms that are renewable based on board member performance against expectations.

“This ensures that the board does not get stale or so entrenched and self-interested that it loses perspective on the big picture,” he says.

 

3. Evaluate your board’s performance

To maximize board performance, behavioral health organizations need to set expectations for board members, communicate those expectations and then monitor and evaluate over time.

The list might include:

  • In-person attendance at meetings;
  • Following through on commitments;
  • Continuing education; and
  • Committee participation.

 “Given the board’s role as stewards of a public trust that the dollars from government or private donors are being used wisely, there needs to be a strong emphasis on accountability,” says Paine.

Members must be versed in big-picture expectations, too. For example, boards must be able to discuss issues such as organizational risk and compliance, as well as the organization’s financial position.

“This requires subject matter knowledge of the regulatory issues organizations face, whether that involves mental health parity, the Affordable Care Act or Medicaid or Medicare enforcement,” says Snyder. “They have to have a general awareness of these issues so that they can effectuate their fiduciary obligations in a more meaningful way from an enterprise standpoint.”

Operationally, boards should seek more incisive conversations with top management to shape board meeting agendas. The key is for board members to fulfill their role in defining policies that will guide the operation of the organization and the measures against which organizational performance will be evaluated. However, they must remember to stay out of day-to-day operations.

“Micromanagement is a real problem,” says Paine.

If a board member is not living up to his or her commitments, the board chair and other key members should have a predetermined method to transition that member off of the board.

“If someone is asked to resign, it needs to be handled carefully with documentation and using personal relationships to move people along,” says Snyder.

 

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