5 Best Practices for Strong Governance from Spectrum Health’s President & CEO
Last Updated October 5, 2020
By Tina Freese Decker, President & CEO, Spectrum Health
Governance is like motherhood and apple pie. Everyone’s in favor of it. But, like being a good mother or baking a great apple pie, it’s much easier said than done! This is why, at Spectrum Health, we try to think past the platitudes to achieve truly effective, meaningful governance.
Governance is an absolutely essential component if our organization is going to realize its vision of providing personalized health made simple, affordable and exceptional. This is what consumers want and deserve, and we intend to deliver it to them. But this can only happen if we have the right people offering the right governance oversight so we can implement the right decisions to advance our mission, vision and strategic plan.
Assuredly, every organization needs an engaged, thoughtful and active board to achieve success. But this is particularly true for non-profits, because the profit motive is not a determinant, so the involvement of board members is essential to reinforce and align the organization with its mission. In healthcare, a thoughtful and active board is of special value, since the rate and magnitude of change in this field is daunting. To productively respond to this massive amount of change and fully achieve our vision will require a clear, broad perspective, with guiding input from leaders and experts from a diverse array of industries.
All boards must perform these roles: performance oversight, establishing governance and operating policies, and decision-making. For a non-profit organization, the board member responsibilities and opportunities go well beyond these primary roles to include deeper involvement. This doesn’t just happen. It takes time to educate, shape and foster committed board members to ensure the meetings themselves and also the time in between meetings are effective, efficient and purposeful.
There are five best practices to achieve strong governance at a non-profit like Spectrum Health:
Board Goals
The strategic plan and corresponding key performance indicators are important measures to evaluate an organization’s success. Similarly, the board should have specific measures and goals to drive governance accountability. These are aligned with, but not identical to, the goals of management, since the board must adopt a holistic oversight perspective. The board should review its progress toward goals and priorities at every meeting. These goals can include education on specific topics, recruitment of board members, succession planning for the CEO and other governance-related functions.
Board Competencies
Every board is different, and each one evolves with time and new members. Governance is a function of the entire board, not individuals. It is important to determine the competencies needed of the board in total, and those competencies should support achievement of the mission, vision and strategies. Typically, there are no more than 10 competencies identified and prioritized as boards evaluate current members and select potential board candidates. Conducting an assessment of the competencies of the current board is essential to understanding what gaps may exist to help inform succession planning. Some sample competencies include national perspective, diversity, cybersecurity and financial.
Board Agendas
The majority of the time that executives spend with board members is during the board meetings. Thus, it is important to set board and committee meeting agendas that make an impact. Effective agendas require an annual, and sometimes multi-year outlook. The calendar will determine when it is necessary to schedule a review of the organization’s mission, vision and strategy, as well as the quality and financial plans that accompany the strategy. Additionally, meetings should include discussions regarding compliance, technology/digital capabilities and physician relationships. From experience, it is advantageous to include the strategic discussions as early as possible on the agenda. The strategic conversations are also more likely to be valuable by providing strategic questions in the pre-read materials, which are of crucial importance. Board members are busy people but must commit to finding the time to read these materials.
Executive Sessions
Typically, executive sessions are held when a serious, confidential topic must be discussed with attorney/client privilege. Holding an executive session after the board meeting with no agenda is also recommended – with and without the CEO. This allows the board to ask questions specifically to the CEO. It also allows the board, without the CEO, to discuss governance best practices and other issues that may be more openly discussed without management present.
Relationship Building
The relationship between the board members and CEO must be trusting, transparent and beneficial. Both need the ability to be candid and direct with each other, asking pointed questions. The CEO and board chair are a team. They facilitate and lead the dialogue and decisions. These relationships solidify and support the commitment to meet the mission and vision of the organization.
At Spectrum Health, we have a high-performing board. The board is continually learning and evolving and optimizing the five best practices listed above. The board sets specific goals each year, reviews progress toward them at every board meeting and actively discusses why the board goals are relevant. The competency matrix is developed and reviewed by the board governance committee to assist with recruitment and succession planning for several years into the future.
Our current board members include local, state and national leaders, all with a diverse perspective. The board agendas have been transformed to allow for fifty percent of the time spent on strategic conversations. The remaining half of the meetings is on informational topics directly related to the strategic plan and the mission. Executive sessions have been held to focus on talent, new CEO development and board member development. This has all led to building trusting and engaging relationships between the board and the CEO.
This transparent approach creates aligned strategies and a renewed energy for Spectrum Health to thrive as a successful non-profit organization that is and will continue to be in the forefront of the very challenging, but highly gratifying, field of healthcare.
Tina Freese Decker is the President & CEO of Spectrum Health System, an integrated health system with an award-winning health plan, teams of nationally recognized doctors and providers and a network of hospitals and care facilities in Southwest and West Michigan. She currently serves on the Board of Directors of the Michigan Health and Hospital Association.
