Roles & Responsibilities of the Board

Mission Statement of the Board

The Mission of the (the organization) Board is as follows:

The (the organization) Board of Trustees will achieve standards of excellence related to the provision of governance oversight in a manner which ensures that (the organization) successfully fulfills its mission while remaining financially viable.

Reflecting this commitment, the (the organization) Board is committed to the following operating principles:

• adding true value by accomplishing concrete results in all aspects of its work;
• making hard decisions in a timely manner that supports forward action;
• making decisions that are understood and supported by key stakeholders;
• actively involving key stakeholders in the Board's decision making process;
• asking informed questions;
• holding management and medical staff leadership accountable for achieving agreed upon outcomes;
• actively serving as an advocate with the business, philanthropic, and political community.

It is understood that all key stakeholders (physicians, executives, and other community members) who are granted the privilege of participating in the governance of (the organization) must share the same commitment to mission and operating principles as described above.

Responsibilites of the Board

The overall responsibility of the Board of Trustees is to ensure that the organization is fulfilling its mission in a manner that ensures the delivery of quality care, while maintaining the financial viability of the organization. As it strives to accomplish this responsibility, the Board must fulfill the following functions:

• Ensure that the organization has a current strategic plan and a set of strategic priorities, which support the development of an integrated and comprehensive health care delivery system that meets the healthcare needs of people living in the market that is served by the organization.
• Appoint, evaluate, set the compensation and benefits for, and (if necessary) terminate the President; approve the overall compensation strategy of the Corporation on an annual basis; and participate in the selection of the Chief Operating Officer, the Chief Financial Officer and the Chief Medical Officer, as appropriate.
• Establish and monitor achievement of Corporate financial objectives including: approve the annual operating and capital expenditure budgets; monitor the financial affairs of the Corporation; take such action as may be necessary to maintain the long-range financial strength and viability of the Corporation and its subsidiary companies; and ensure that the organization is in compliance with all federal, state and other regulatory requirements.
• Approve medical staff appointments and credentialing, and take necessary disciplinary action related to individual physicians, as recommended by the Medical Staff leadership.
• Monitor the clinical, professional, bio-ethical, credentialing and quality assurance affairs of the Corporation; and take whatever actions it deems necessary to ensure that rules, regulations and procedures are being met, consistent with corporate policy and objectives and with medical staff by-laws.
• Monitor the manner in which the organization fulfills its mission related to teaching and research; and insure that the organization is in compliance with appropriate regulatory requirements.
• Provide community advocacy required to enable the organization to meet the healthcare needs of the community. This advocacy role includes: community leaders; city, county, state, and federal legislators; local businesses and employers; and third party payers.
• Periodically review the corporate structure and the performance of the Board; and take actions deemed necessary to achieve standards of excellence in governance.

Maintaining the Policy Level Focus of the Board

The Board's role is to set broad organizational policy and that ensure its policies are being implemented by management. The common policy level decisions central to the Board's fiduciary responsibility includes granting its approval related to issues such as: the organization's mission; the long range vision; strategic performance targets; core strategies and strategic priorities; the corporate structure; the long range financial plan; annual operating budgets and capital equipment budgets; broad based performance standards for the institution and for the CEO; compensation and benefits strategies; and quality assurance plans.

In addition to approving broad based policy related to issues such as the above, the Board is responsible for monitoring the organization's overall performance and ensuring that board-approved policies are being implemented. In the event that breakdowns are occurring, the Board must ensure that corrective action is taken.

In most not-for-profit organizations there are varied opinions related to the appropriate boundaries between policy and operations. Much of this problem comes from the fact that many smaller not-for-profits lack the resources to hire the depth and breadth of professional talent that is needed to manage their organization. While this problem may have existed in hospitals many years ago, during the last several decades administration throughout the hospital and healthcare industry has become much more professional. In the modern hospital, especially larger hospitals with over $200 million dollars in annual revenue, there should be more than enough depth in knowledge and expertise to run the organization.

The other factor that creates somewhat of a blur between the boundaries of policy versus operations is the fact that much of the baseline work related to mission, vision, strategy, and standards has to be initially developed by management. The Board is then in a position of reviewing and refining that work, which it eventually approves as documentation of its formal policy.

One way of differentiating the boundaries between policy and operations is through the use of separate and distinct verbs. For example, within its policy role, the Board reviews and evaluates management's analysis and recommendations, responds to what is being proposed, challenges management's thinking, provides advice and counsel, requires changes and adjustments, grants its approval, and holds management accountable for achieving agreed upon results. Management's, operations role includes: monitoring the environment and the organization's performance; identifying problems and initiating investigation; identifying opportunities and threats; analyzing options and recommending a course of action; drafting documents; negotiating and resolving differences; developing business plans and implementing work plans.

Symptoms that a board may not be adequately managing the boundaries between policy and operations include:

• an excessive number of board meetings (i.e. - more than once a month);
• an excessive number of board committees that focus on operational matters such as facilities management, human resources, marketing, etc.;
• the lack of a formal CEO evaluation process within which performance objective are defined and honest feedback is provided;
• a tendency of board members to intervene directly in problems when they surface, rather than report them to management and expect management to address them;
• high visibility of individual board members within the organization, creating the perception among both management and staff that they are running the organization;
• independent action by individual board members without first discussing an issue within the Board, the Board Chair or with the CEO;
• patterns of direct intervention of board members into operational matters;
• direct conversations between board members and senior/middle managers and line staff;
• conflicts and disagreements related to individual initiatives rather than focusing on the broader policy or strategy and how the specific initiative fits within the broader picture;
• excessive telephone calls from individual board members to management.

As a general operating principle, the Board should avoid situations such as the above and focus on setting clear goals and outcome expectations with management and holding management accountable for achieving those outcomes. Direct intervention in operational matters by individual board members or committees is generally considered to be stepping outside the Board's policy level responsibilities.

While there are occasions when the board should intervene in an operational issue, this is a decision that should be made by either the Executive Committee or the full Board, and not by an individual board member.

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Shaping the Future of Health Care
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