Trust & Confidence: Does Your Board Have These In You?

Was reading John M. Buell’s article in Healthcare Executive Sept/Oct 2010 edition about to develop health relationship between CEO and the boards. 

As we all know, board’s focus has changed over the years from philanthropic and financial oversight to bringing in expertise, accountability and community focus.  As the background of board members becomes more complex, gaining their support has become critical.  In light of this CEOs should embrace this change with positive attitude and should see this as an opportunity to seek support from more experienced people.

It is imperative that CEO keeps open and transparent communication with the board members, especially when it related to negative outcomes in future.  It generates some discussion, and helps prepare board for underperformance in future, and also serves the purpose of board education.  If the performance isn’t as bad as projected, then all the more better for the CEO.  So, always better to set right expectations.

Also, regular ongoing interaction with board members will help alleviate the fears that they will not treat underperformance fairly.  A well qualified board is generally aware of the complexities of managing an organization, and an atmosphere of open communication will further alleviate CEO’s apprehensions.

While communicating consequences of any initiatives, one would naturally communicate the benefits, but one has to convey the potential risks and downsides as well.  Any pointed question from board should be seen as an opportunity.  A full discussion on every aspect will help, as there would be no false expectations.  And there will be a level of comfort on both the sides.  While communicating the risks, it will be helpful if risk management strategies are discussed as well, even in brief.  This will convey the message to the board that the management is in control.  CEO shouldn’t be afraid that board will micromanage.  If there is great working relationship and the latter is well informed, they’ll not.

CEO don’t and are not expected to know all, and they shouldn’t convey to the board that they do.  Instead, they should be upfront with the board that they don’t know and why they don’t know.  Taking further they should both work together to be ready for unknown.  As quoted,

“By doing this, you make the board a strategic partner and have board members own some of this uncertainty, Trustees will be more forgiving, understanding and empathetic is something doesn’t go according to plan because they will be in the same position as you.  CEOs can use this sharing-the-uncertainty approach to their benefit and change the relationship for the better.”

Once the trust is established, it is needed that board members understand their roles.  This can be done via formal or informal board education.  Formal board education can be done via some short educational programs or having a consultant come in.  Informal education can be an ongoing process, at every interaction or meeting.   Board Chair can be taken into confidence whenever some course correction is needed during meetings or otherwise.  

The expanded role of board has given rise to specialized role of its members.  It may look like micromanagement, but it in fact is “microgovernance”.  When we talk of microgovernance, we mean committee structure that takes care of specialized duties like audit, patient safety & quality, community engagement etc. 

Taking example of St. Vincent Health, Indianapolis, the article talks about the ideal size of the board.  Such that members are fare mix of expertise and the number is large enough such that they can form various committees.  Also, board shouldn’t be too large such that meaningful discussions and engagement is not possible.

At Hartford Healthcare System, they give a lot of emphasis on board being constructive.  The key lies in through selection process such that only those focused on organization mission and vision are selected.  Once selected they prefer to spend good deal of time with members as it helps CEO understand their perspective and their level of expertise.  This would give the member an opportunity to develop understanding of challenges, something that cannot always be done at the meeting.  The personal relationship developed during one-o-one meetings will help the CEO speak in language most members understand.  Similarly, opportunity should be given to members to mingle and know each others perspective. 

Even after all due diligence, it is not necessary that all the steps taken would be correct.  But, as this statement puts it so aptly,

“And when a decision turns out to be unsuccessful, as the CEO I would rather say to my board that we figure out a solution together and make corrections.  Having the board help in figuring out the answers places me in a much better position that if I had claimed to have the answer and discovered the answer was wrong.  Having a board that challenges your thinking but also stands by your decision is the ultimate scenario for an effective board-management relationship.”

 

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