US and Scandinavian Healthcare System: A Comparison

The article puts it in very simple terms that Scandinavian countries’ healthcare system is for social good, and that of US is like a business (Bradley & Taylor, 2013).  Both the authors are quite accomplished.  Elizabeth Bradley is is a professor of public health at Yale University and the director of the Yale Global Health Leadership Institute.  Lauren Taylor is a Presidential Scholar at Harvard Divinity School where she teaches Health Ethics.  Together they have co-authored The American Healthcare Paradox, on which this essay is based. 

It is a know fact that United States spends most per capital on healthcare.  Against this backdrop, the authors have tried to analyze the reasons why it resists switching to publicly funded/delivered healthcare system.  It is something that has increased efficiency and coverage in other countries. 

It states that the United States in its belief to be different from other countries has consistently ignored their outcomes.  There is clear evidence that the “Scandinavian model”, when compared to US’s, outperforms in delivering better outcomes at reduced costs.  These countries spend a little more that half of what US spends on healthcare, cover 100% of their citizen, and have more physicians and acute care beds the latter.  This bring into front what we can learn from their model.  That is not to discount that they too must be having problems of their own.  Their research involving in-depth interviews and surveys with policy makers and practitioners found that both countries shared a common values, which is personal freedom.  To be more specific people of both countries value their personal freedom and their ability to control theirs as something paramount.  Also, one needs to take into account that the need for freedom and love for competition does not mean that quality and efficient care cannot be provided to the population.  Also, it does not hold true that the need for scientific innovation cannot find common ground with the belief in having humanistic approach to healthcare. 

The big question then is why is the there so much resistance to change? This is where the differences start.  Americans are less amenable to taxing the rich so as to cross-subsidize services to the poor.  This has to do with their psyche that social assistance in any form is likely to weaken the resolve of the people to exert and excel.  In contrast, the Scandinavians consider dependence on government as an assurance against their own insecurities.  These differences are prominently reflected across their respective healthcare system. 

The take away form this article is that its not the narrow comparison between the system of both the countries, but a broader view how these system evolved in the first place that is the key.  Further, it needs to be determined what is to be done in light of how the Americans view their system.  Up till now the debate on healthcare has always been restricted to ways to cut costs, increase access and improve outcomes.  And most would agree that the reforms so far have not been sufficient enough to curtail long-term costs or attain universal access.  In light of the prevailing view in US regarding government’s involvement in their daily life, a boarder debate on this required before any substantial progress can be made on healthcare.  It is only then that any comparison with Scandinavian model can have meaningful impact. 

The article is well structured, as sets the tone with usual WHO/OECD data.  Then builds upon a bit by describing the Scandinavian model.  It then tries to find a common ground between the US and Scandinavian values.  Then it moves on to more of analytical side by describing its survey and interview, which tries to go deeper into the problem.  Against this background, it tries to evaluate the reasons behind the difference in the system.  It concludes logically by bringing to front the psyche of people of respective countries, especially how they perceive the role of government in their daily lives.  Finally, how that reflects in their respective healthcare system.

After going through this article, I believe, before any further debate on healthcare, it is essential of have a broader debate about the role of government in the lives of average Americans.  It will be even tougher debate, and individual steps would be even harder to push.  Without broadening too much, they should limit the debate to health and social issues.  They should bring into forefront the need to take care of have-nots.  They should also consider promoting institutions, such as those that are typically people focused. 


Bradley, E. & Taylor, L. (2013). US Health Care Reform Is Only Getting Started. [online] Retrieved from: http://yaleglobal.yale.edu/content/us-heath-care-reform-only-getting-started [Accessed: 11 Dec 2013].

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Basis for Developing System-wide Clinical Pathways

Kinsman, L., Rotter, T., James, E., Snow, P. & Willis, J. (2010). What is a clinical pathway? Development of a definition to inform the debate. BMC medicine, 8 (1), 31.

The article talks about Clinical Pathways, which are tools that guide evidence-based healthcare.  But, there is a widespread disagreement about their impact on hospital resources and patient outcomes.  This stems from confusion among researchers and healthcare personnel regarding what makes up a clinical pathway.  In an effort in that direction, a team of Cochrane review authors decided to create a criteria to assist in the objective identification of clinical pathways studies from the literature.

In an effort to device a criteria to define a clinical pathway, the undertook a four-stage process:  do literature review to define clinical pathway; develop a draft criteria; pilot test the criteria; and modify the criteria based on over all literature review.

Literature review and their liaison with the European Pathways Association resulted in creation of five criteria used to define a clinical pathway: (1) intervention should be structured multidisciplinary plan of care; (2) it should translate guidelines or evidence into local structures; (3) it should detail the steps in the course of treatment or care or criteria based progression; (4) it should have timeframes or criteria-based progression; and (5) it should aim to standardize care for a specific clinical problem or episode of healthcare in a specific population. 

After pilot testing it was concurred that if an intervention met the first criteria, and in addition three out of the other four, then it should be considered as a clinical pathway.  Therefore, this criteria can be used as a basis of development of standardized, internationally accepted definition of a clinical pathway, and for the pathways themselves. 

The method employed is simple and credible.  It stress on the fact that there is widespread disagreement over their impact on hospital resources and patient outcomes.  I believe the disagreement comes for conflicting priorities on the management and the physicians.  However, it is not difficult to resolves as such conflicts happen across the spectrum of healthcare delivery.  Further, I believe that care pathways should have flexibility built in to allow customization based on patient’s needs and that of the providers.  So long as the patient reach the right destination within the broad parameters of pathways it is fine.  Keeping this way we will be able to balance both outcome and resources.

Also, there is need to have multi-disciplinary teams to discuss clinical pathways, so that everybody’s perspective is taken into account, and appropriate clinical pathways are developed.  These teams “should” have representation from every possible sector and profession that may be required to participate in the delivery of care.

Review : Putting the Balanced Scorecard to Work

Kaplan, R. and Norton, D. 1993. Putting the balanced scorecard to work. The performance measurement, management and appraisal sourcebook, pp. 66–79.

The article states that today’s managers realize the impact measures have on performance. But what they don’t realize is that measurement is essential part of the strategy. They may introduce new strategies and innovative operating procedures, but continue to use the same short-term financial indicators. They not only fail to realize the new indictors, but also fail to question whether the old measures are relevant.

The balance scorecard provides with a comprehensive framework that translates company strategic objectives into a set of performance measures. It presents with four different perspectives from which to choose measures: financial, performance for customers, internal processes, and innovative and improvement activities.

Traditionally, companies have their own operational and physical measures for local activities. But these local measures are bottom up and are based on ad hoc processes. On the other hand, the scorecard’s measures are based on organization’s strategic vision and competitive demands. Scorecard, by requiring the organization to concentrate on limited number of indicators, helps them to concentrate on their strategic vision.

Unlike traditional measures, which focus on past successes, the balanced scorecard tries to strike a balance between current and future successes. Also, it tries to strike a balance between external measures, such as operating income and internal measure, such as new product development.

Finally, organizations are typically involved in various initiatives such as: process reengineering, total quality, and employee empowerment, but lack a sense of integration. The process of balanced scorecard development tries to create a focal point of activity where all such activities are integrated.

The balanced scorecard is not a template that can be applied everywhere. Its development is a process that can be applied to different situations, strategies and environment. In addition to organization, their individual units can customize it according to their objectives. Balanced scorecard is very transparent, as by looking at it, one can arrive at a conclusion about business unit’s competitive strategy.

Let’s take example of Rockwater, which is an underwater engineering and construction company. They realized that the competition in their industry has changed dramatically. They observed that the focus in the industry had shifted from low-price competition to long-term partnership based on value creation for the clients. The senior management team of the company created a vision for their company. It was to provide highest standard of safety and quality for their clients. Based on that vision, they also created a strategy, which had five elements, which were further developed into strategic objectives. To make them tangible, they distributed those strategic objectives among the four sets of balanced scorecard performance measures.

If one observes their financial measures, in addition to the measures for short-term results, they added two more measures to overcome the uncertainty of future performance. Regarding the Customer Satisfaction measures, and in response to changing environment, they decided to divide them into those who provide high value and those who are price conscious. This will allow them to create a different set of measures for both kinds of clients. As value-based clients were beginning to bring in more business, and were focus of their strategies, they decided to conduct an annual survey to understand their perceptions of the company. This was in addition to monthly satisfaction and performance ratings they requested from their clients. They felt that such measures gave them direct access to customer and market feedback.

Regarding internal processes at Rockwater, they made a major shift in their thinking. They moved from measuring performance of each functional unit to that of integrated key business processes. This helped individual business units to come out of their silos, and think about product and end-to-end process to deliver them. This helped make the effectiveness of their project performance as their key core competence. Further, the also realized that time spent with prospective client went a long way in building relationship. And it had direct bearing on influencing results. At the same time they wanted that a metric that could be communicated this across the organization. Even though it is an input or process measure, they chose to go ahead with “hours spent with key prospects discussing new work” as a key measure.

With regards to Innovation and Improvement, Rockwater believe that it was something that driving the other three categories. They believed that they would achieve these objectives through innovation of new products and services. This will result in creation of new sources of revenue, and market expansion and diversification. They also stressed on the need for continuous improvement of internal processes. They measured the first objective by the revenue generated from new sources. And the second objective was measured by a continuous improvement index. They felt the need to create an appropriate atmosphere in order to drive these two objectives. A supportive climate of empowered and motivated employees was considered essential.

The picture changes slightly when evaluating the role of balanced scorecard in context of Apple computers. When they went about creating theirs, they wanted to think beyond the short-term measures, such as ROE and market share. For financial perspective they chose shareholder value; for customer perspective, they chose market share and customer satisfaction; for internal process perspective, they chose core competencies; and lastly for improvement and innovation, they stressed on employee attitude.

As their customer base was not homogeneous, they chose to do their own customized survey than to depend on standard market surveys. It is highly noteworthy the core competencies they chose under internal process perspective. What they chose to make their core competencies is the kind of things that are close to their client base. That made a wonderful strategy, and it clearly reflects on their products. To promote the employee commitment and their alignment, they chose to do survey. And in an effort in that direction, they formulated the survey question to convey and assess their knowledge about company strategy. Also, the used the market share as tool to remain attractive to software developers. The inclusion of shareholder value is well thought off, even though it is a result and not a driver of performance. This was done with the idea of replacing the old indicators that didn’t take into account the investment made today, which will generate revenue in future. This helps the unit head of each major organizational unit to assess the impact of their initiatives on company’s new ventures.

These initiatives have helped Apple in many ways: as the balanced scorecard is used primarily as a planning device, instead of monitoring device; and these metrics can be driven both vertically and horizontally.

The move to balanced scorecard at AMD (Advanced Micro Devices) depicts a very contrasting picture. They did execute a quick and smooth transition to balanced scorecard. They already had a clearly defined mission and strategy, and senior management team understood it well. They already had performance measures, which fitted well into a quarterly briefing book’s seven sections. So, the things pretty much remained the same. As a result what they had a repository of information that allowed long-term analysis for performance and planning evaluation. All this looks fine, but it had retrospective outlook, and didn’t seem to lead the change.

It cannot be overemphasised that the development of balanced scorecard helps drive change. Particularly, if two different organizations are merging, it helps bring together the culture and help employee speak same language. The process of developing the balance scorecard comes in handy, when despite apparent consensus on strategy; there is disagreement about how to make it operational. Therefore, it helps them reach a consensus regarding the high priority areas.

Taking example of Analog Devices, it states that the main impact has been to help sustain initiatives where they have been working for years. In contrast, the scorecard isn’t always an instrument for dramatic change. Taking the example of AMD, the development of scorecard didn’t have any dramatic impact because the executives didn’t use it to drive the change. Prior to developing the scorecard, they had already formulated and reached consensus over mission, strategy and key performance indicators. As AMD competes in a narrow segment of the industry, the managers were already familiar with the technology, engineering and the markets. So, what they compiled at the scorecard wasn’t new, but it did allow them to see things from organizational perspective. Therefore, AMDs limited success with the scorecard underscores the point that it delivers dramatic results only when used to drive a change process. That makes it not just a measurement system, but a management system.

Not just the scorecard, but also the kind of measures we are employing is also important. Taking the example of FMC Corporation, as diversified company, the return-on-capital-employed (ROCE) was especially important for them. The move away from return-on-investment to ROCE helped them focus their attention on further growth. From that perspective, it helped them determine business that were doing well, and those that weren’t. It also set them for splitting the company into independent companies, such that each had its own strategy. The take away is that if you want a corporate to change its strategy, then you must change the system of measuring the new strategy.

Balanced scorecard also helped organization step away from measuring only the short-term financial results. The organizations realized that they need a new system of measurement to help manager achieve breakthrough in marketplace. They would need to focus on thing that will bring in long-term values, such as customer service, market position and new product development. They use the balanced scorecard a focus of their discussion about they want to see in future, how to become the most valued supplier etc.

It also entailed giving freedom to division managers to develop their own balanced scorecard. But senior management did give them certain specific guidelines: first, the measures should be objective and quantifiable, and second, they should be output measures, and not process measure. It is believed that focusing on output measures helps managers to understand their industry and strategy, and helps to measure success through specific output.

While building upon the balanced scorecard, one needs to understand that difference between process improvements and the output achieved. Furthermore, one needs to differentiate between benchmarking and scorecard. It is much easier to benchmark a process than an output. That is because each of the output measures are associated with long-term targets. That is what makes a scorecard more strategic.

The managers at FMC didn’t find going for unit wise scorecard as smooth as predicted.

Financial efficiencies

Was reading Doing More With Less by Susan Birk in May/June 2012 edition of Healthcare Executives.  I won’t delve into why it is so important because we all know it.

Talking of structure and efficiency,  as healthcare organization move towards value-based system, two pathways become very critical: cost management and cost structure.  Cost management or efficiency pathway would mean being more efficient in what we do and not cut down the scope of services.  Cost structure pathway would mean reassessing the strategic objectives to derive efficiencies by altering size and scope of services.  It may involver consolidation of services at one place and other structural changes.  The latter approach has not been explored that much in healthcare sector.  The reasons for this are political, as patients, staff and physicians would resist change.  It is generally advised that the organization start off with working on cost efficiencies, as this will create groundwork for further change.

As a step forward to better integrate their services and to reduce cost, organizations can reduce their non-core assets – services and facilities.  The question that comes to mind is what is core and what is non-core.  Core would be activities through which more of the care pathways pass.  Non-core won’t be in line with the strategic goals, and would be something that easily handled by somebody else.  Organizations can easily divulge non-core activities, and dedicate all their resources core activity.  The article contends that more tightly the providers are able to integrate the decision making related to cost structure and management with strategic, operational and capital allocation planning and management, the more effectively they’ll be able to use resources and keep cost under control.

Another important parameter of cost is overcapacity.  It is important to measure historical and future trends so as to balance the capacity.  That can be done better if there are means to measure.  Overheads are hard to measure as they depend of expected demand.   Ways can be found by calculating true cost, measuring appropriateness, and then determining the rationale behind continuing those services.

The article takes example of University of Alabama at Birmingham Hospital.  It emphasizes the point that cost cutting efforts should be enterprise wide, and not department wide.  Else saving at one place might be counterproductive at the other.  It further goes on to day that any cost cutting efforts coupled with maintenance or improvement of quality, should involve both clinical and financial leaders.  It should be communicated upfront that cost cutting efforts are not at the cost of quality.

Talking about Faxton St. Luke’s Healthcare, they believe in creating a sustainable model.  Where sustainability and accountability work in tandem.  The idea is to use LEAN and Six Sigma based performance improvement initiatives as cost management activities.  This in turn is hardwired to their corporate goals, and cascaded down the leadership as their individual goals.

Flexible Leadership

Was reading Leader Be Nimble by Dr. Jessica D. Squazzo in November/December 2012 edition of Healthcare Executive.  It talks about a very important question about leader’s knowledge and capability.  In increasingly complex world of healthcare, leaders have to judge and support people with varied skills.  So, how should one be a good leader?  It is not possible to learn all the fields of health administration.  The article begins by saying that a leader need to be a jack-of-all-trades, but an open-minded person.  The key attributes should be flexibility and open-mindedness.

Further to reach that senior place, they are more likely to be successful if they follow a zig-zag career path than a ladder-like one.  They may have to make a few compromises along the way, but this way they are more likely to gain varied skills and experiences.  Also, people may still believe that compensation is the biggest driver, but in actual they can be flexibility, open-mindedness and pursuit of lifelong learning.  It gives an example of a retired US defense personnel taking up the job of senior executive in a acute care facility.  One would think only negatives about such a transition, but his experience was otherwise. Among the things that came in handy were team building, the necessity to complete a task and building a consensus based on reason.  Other things I believe a person with such background will bring are ability to create urgency/criticality around the task at hand.  The another example of flexibility is to be ready for anything because you can never craft a perfect plan. 

One should also be willing to adapt, as the lateral moves allow you to gain varied experience.  It would be a very conservative idea to rise through the ranks of an organization.  Quite often, such organization need fresh idea that an outside person can bring.  Also, leaders can make virtue out of necessity when they are put into a difficult situation.  The experience they then gain elsewhere can propel them back into better position.  It is this exact virtue of adaptability that is going to bring them back in.  The article also underscores the point that the days of remaining in a particular organizations are over.  So, it becomes critical for leaders to decide when to make a move.  On short term, I’d say that they shouldn’t make a move unless the reasons are really compelling.  Especially if the people at work like you and you like them as well.  On long term, I’d say one should plan a move when there isn’t any challenge left at the current organization.  Also, leaders must do a favour to their current employers by starting to promote next generation of leadership well before they decide to move. Remember, one of the essential qualities of leaders is that they create more leaders.  Probably the best way to be remembered once you leave the organization. 

Leaders in true sense should come out of their comfort zone.  In every challenge, they should see an opportunity to learn and deliver even more.  In today’s trying times, they should be happy to be entrusted with greater responsibilities.  A great metaphor would be cycling uphill and downhill.  When in testing times, as in cycling uphill we have no choice but to work hard, else slip backwards.  Further, while going downhill we can either sit back and let the gradient work for us, or take its advantage and work as hard as we were while going uphill.  In the latter approach we will gain enough momentum to cross any further hurdle with relative ease. 

 

Aviation & Healthcare : Polish President Air Accident

Just finished watching an episode on Discovery Channel about aviation disaster in Poland, in which their President died.  The scenario looked so similar to errors in healthcare, about which I was reading today itself.  In that incident a Russian made plane crashed while landing at a Polish military airport.  It was flying low and brushed over trees and overturned and crashed before it could touch the runway.  It was foggy and the pilots were faced with very poor visibility.  Now, I will highlight the errors that were made on that flight

  1. Their altitude indicator was not working properly.  From the flight data recorder it was found that they were flying lower than what their instruments told.  It was found that as it was a military airport, its elevation above ground was not in plane’s database.  On top of that the pilot had deliberately set the elevation a bit higher, to avoid “nuisance” warning that go off when the plane is dangerously low.  A sure sign of over confidence by probably the best trained pilots.
  2. From the cockpit voice recorder they found that there was some unauthorized person in the cockpit.  Most likely it was some senior official as it was a VIP flight.  It could be concurred that that person was putting indirect pressure on the pilots, adding to their stress.
  3. Also, the captain of the plane was also doubling up as navigator, which added to his workload. 
  4. In addition to the altimeter, which was faultily set, the navigator also had radio altimeter.  Investigators wondered why the faulted when they had redundancy in the form of radio altimeter.  They later found that the plane encountered a valley on its approach to the runway, and then sudden elevation.  That fooled the pilots into believing that they were flying high when they were not.
  5. The investigators also wondered why the captain didn’t decide against landing in such weather, even thought it was his final call.  They wondered that he was under indirect pressure from officials in the cockpit.   Also, he has had a previous experience as a co-pilot, where the captain refused to land a VIP flight due to safety, and the latter was reprimanded for it.  Surely, this thing was lingering in his mind and didn’t want anything to affect his career.
  6. They wondered why the air traffic controller (ATC) at the airport didn’t warn the pilot against landing and suggest a go-around.  It was later found that the instruments at ATC weren’t working properly.  More importantly, even though ATC was acutely aware of the risks involved, they didn’t have the authority to divert the flight.  Had it been any other flight, they would have, but not the one with VIP onboard. 

Now coming to similarities with errors in healthcare industry.  This seems to be a classic case of “Swiss cheese” theory, where multiple errors, all happening at the same time and redundancies not working.  Interpreting each point individually,

  1. No matter how well trained and experiences a professional you are, you must not ignore the safety built into standard operating procedure.  Errors often happen by most experienced people, as less experienced exercise caution.
  2. This point emphasized the importance of stress-free environment at workplace.  Like aviation, efforts should be taken in hospitals such that staff does not get stressed.  Also, management should leave the technical stuff at the hands of the experts, and be in a more of a supportive role.
  3. Efforts should be made such that workload is evenly distributed among workforce.  In LEAN terminology, it is called leveling.
  4. It is again a case of Swiss cheese theory, where two holes were aligned and they contributed towards the accident.
  5. Clubbing point 5 & 6 together:  There was indirect pressure on both pilot and ATC.  Unlike the workers of Toyota Motor Co, who are empowered to stop the production line, they had no say in such a critical matter.

Ultimately, errors happen when redundancies built in go wrong and it is too late to act.

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.”