Advisory Board Profile
2019 Biennial Survey of Hospitals and Healthcare Systems

Below is a comparison of advisory boards against subsidiary boards overall. These are boards that indicated in the survey that they “make recommendations to another fiduciary body/are considered an advisory board.” Throughout the report, these seven boards’ responses are included in the total responses for all subsidiary boards, as this is considered to be a subset of that category. However, we wanted to look at whether the makeup of these non-fiduciary boards is different from fiduciary subsidiaries. (Significant differences only are included in this profile; note N size of 7. More detail can be found in Appendix 1C: Subsidiary Board Structure, provided online at www.governanceinstitute.com/2019biennialsurvey.)

In general, advisory boards are smaller than other subsidiary boards by about two members. Sixty percent (60%) of the board are independent board members: 

Advisory boards

Total # of Voting Board Members

Management*

Medical Staff Physicians**

Independent Board 
Members ***

Other Board Members****

 

2019

2019

2019

2019

2019

Average # of Voting Board Members

13.4

1.9

1.7

8.0

0.9

Median # of Board Members

14

2

2

8

0

Other variances from subsidiary boards overall:

  • Term limits: 100% vs. 83%
  • Voting CEO board member: 71% vs. 62%
  • Voting Chief of Staff: 50% vs. 36%
  • More likely to have a physician board chair (43% vs. 15%)
  • Expenditure for board education: 80% spend under $10,000 (vs. 58% of all subsidiaries)

Board Meeting Content:

  • 21% in active discussion, deliberation, and debate about strategic priorities of the organization (vs. 27%)
  • 26% reviewing quality/safety (vs. 18%)

Standing Committees: 

  • The most prevalent committees for advisory boards are quality/safety (43% or three out of seven); audit/compliance and executive committee (29% or two out of seven).

Quality committee profile (N=3; generally, advisory boards’ quality committees have a larger clinician presence than other boards): 

  • 2 voting physician board members
  • 2 voting nurse board members
  • 4+ other voting board members
  • 34 medical staff physicians (employed and non-employed but not board members)
  • 2 nurses from the nursing staff
  • 02 community members at large
  • Average size of committee: 11.7
  • Median: 13

Advisory Board Practice Adoption

The list below reflects the practices that have been widely adopted by the eight advisory boards responding to this section of the report (2.8 and above on a 3-point weighted scale). Due to the high number of N/A responses to many of the practices, the adoption rates for advisory boards are generally higher than those of other types of boards. Practices for which 40% or more advisory boards indicated “not applicable” are not included in this list even if their composite adoption score was 2.8 and above. 

Duty of Care

  • Board members receive important background materials and well-developed agendas within sufficient time to prepare for meetings.
  • The board requires management to provide the rationale for their recommendations, including options they considered.

Duty of Loyalty

  • The board uniformly and consistently enforces a conflict-of-interest policy that, at a minimum, complies with the most recent IRS definition of conflict of interest.
  • Board members complete a full conflict-of-interest disclosure statement annually.
  • The board has a specific process by which disclosed potential conflicts are reviewed by independent, non-conflicted board members with staff support from the general counsel. 
  • The board enforces a written policy that states that deliberate violations of conflict of interest will require disciplinary action or potential removal from board service.
  • The board follows a specific definition, with measurable standards, of an “independent director” that, at a minimum, complies with the most recent IRS definition and takes into consideration any applicable state law.
  • The board enforces a written policy on confidentiality that requires board members to refrain from disclosing confidential board matters to non-board members. 

Duty of Obedience

  • The board adopts and periodically reviews the organization’s written mission statement to ensure that it correctly articulates its fundamental purpose.
  • The board considers how major decisions will impact the organization’s mission before approving them, and rejects proposals that put the organization’s mission at risk. 

Quality Oversight

  • The board approves long-term and annual quality performance criteria based upon industry-wide and evidence-based practices in order for the organization to reach and sustain the highest performance possible.
  • The board requires all hospital clinical programs or services to meet quality-related performance criteria.
  • The board annually approves and at least quarterly reviews quality performance measures for all care settings, including population health and value-based care metrics (using dashboards, balanced scorecards, or some other standard mechanism for board-level reporting) to identify needs for corrective action.
  • The board includes objective measures for the achievement of clinical improvement and/or patient safety goals as part of the CEO's performance evaluation.
  • The board devotes a significant amount of time on its board meeting agenda to quality issues/discussion (at most board meetings).
  • The board is willing to challenge recommendations of the medical executive committee(s) regarding physician appointment or reappointment to the medical staff.
  • The board ensures consistency in quality reporting, standards, policies, and interventions such as corrective action with practitioners across the entire organization.

Financial Oversight

  • The board monitors financial performance against targets established by the board related to liquidity ratios, profitability, activity, and debt, and demands corrective action in response to under-performance.

Strategic Direction

  • The full board actively participates in establishing the organization’s strategic direction such as creating a longer-range vision, setting priorities, and developing/approving the strategic plan.
  • The board ensures that a strategy is in place for aligning the clinical and economic goals of the hospital(s) and physicians.
  • The board evaluates proposed new programs or services on factors such as mission compatibility, financial feasibility, market potential, impact on quality and patient safety, community health needs, and adherence to the strategic plan before approving them.
  • The board incorporates the perspectives of all key stakeholders when setting strategic direction for the organization (i.e., patients, physicians, employees, and the community).
  • The board holds management accountable for accomplishing the strategic plan by requiring that major strategic projects specify both measurable criteria for success and those responsible for implementation.
  • The board works with management to gain awareness of, and prepare to respond to, matters of business disruption.

Management Oversight

  • The board follows a formal, objective process for evaluating the CEO’s performance.

Community Benefit & Advocacy

  • The board holds management accountable for implementing strategies to meet the needs of the community, as identified through the community health needs assessment.
  • The board assists the organization in communicating with key external stakeholders (e.g., community leaders, potential donors).

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