We're putting the finishing touches on the Spring issue. Included are articles on the JCAHO's new practice of unannounced surveys; an innovative approach to tracking strategic plans with one page reports, and a best practices checklist for the board's role in the strategic planning process.
Look for the new issue in about a week.
We have redesigned the Great Boards website to make it easier to read and find the resources you're looking for. As always, you'll find it at www.GreatBoards.org. Later this year, the Great Boards newsletter will get a fresh coat of paint, too.
We've had several recent requests for guidance on two subjects: the difference between policy and operations, and the use of consent agendas to expedite routine business at board meetings.
We've added sample policies on these issues in our Resources section (http://www.greatboards.org/resources/), and further information under Frequently Asked Questions (http://www.greatboards.org/faq/).
THE GOVERNANCE INSTITUTE INAUGURATES NEWSLETTER. The Governance Institute has launched E-Briefings, a free on line newsletter with information about governance trends and the newest TGI research, as well as new TGI conferences and services.
To sign up, just go to TGI’s web site at http://www.governanceinstitute.com/, go to Login/New Registration, and sign up for a New Account. On the last page, check the box for E-Briefings Email Newsletter.
BOOK REVIEW IN BRIEF: The Governance Factor: 33 keys to success in healthcare, by Errol L. Biggs, published by ACHE Press, Dec. 2003, $63. Biggs knows boards – he’s a former hospital CEO and now sits on boards and directs the healthcare management education program at the University of Colorado-Denver. This readable, 210-page book is unique. Other books discuss the responsibilities and best practices of effective boards, or delve into specific subject areas such as hospital quality and healthcare finances. Biggs does both and provides plenty of examples and straight-forward advice.
Even readers who disagree with him will learn from his views. For example, in arguing against term limits and for evaluation of individual trustees" performance, Biggs writes that term limits sweep out "knowledgeable and experienced members" along with the deadwood and marginal performers. "Rather than losing members in this fashion, it makes much more sense to periodically complete a board member performance appraisal and to not re-nominate board members who score badly in the process." Biggs cites experience from several boards that do this. Both newer and experienced directors will benefit from Biggs" insights. For more information or to order, call ACHE at 312-362-6905.
BOOK REVIEW IN BRIEF: Back to the Drawing Board: Designing boards for a complex world, by Colin B. Carter and Jay W. Lorsch. HBS Press, 2004, $29.95. Carter's a consultant with Boston Consulting Group, and Lorsch is a Harvard professor, and both consult widely in the corporate governance world. They argue that no simple governance formula -- be it a large or small board, having a majority of independent directors or having an independent Chair rather than a Chair-CEO - guarantees governance effectiveness. They articulate the pro's and con's of each practice, and then argue that the best boards will discuss these issues and then custom design a board structure and process to bring out the best approach for their situation.
Those looking for a quick fix will be disappointed in this book. Those looking for a thoughtful discussion of governance complexities will find it provocative, and relevant for not-for-profits too. Copies are available through HBS Press or most online booksellers.
REPORT CALLS FOR MAJOR OVERHAUL OF BIG NOT-FOR-PROFIT"S GOVERNANCE. Last year, a series of articles in The Washington Post blasted Nature Conservancy, the world's largest environmental group, for such practices as lending money to insiders, selling land to its trustees, and drilling for oil on nature preserve land. The board came under fire for failing to oversee management and allowing conflicts of interest to replace the organization's best interests - at least to outward appearances. Now, a 28-page report prepared over six months by an outside committee led by Ira M. Millstein, a New York lawyer and an expert on business ethics, lays out a blueprint for restoring integrity to the organization and its governance. One recommendation: Since the Conservancy has a 36-member board - too large for effective oversight - the report recommends a smaller executive committee plus strict observance of conflict of interest rules. "It is essential that a non-profit board . . . scrupulously operate in a transparent, lawful and ethical manner," the report stresses. For information, go to the Washington Post's story at http://www.washingtonpost.com/wp-
dyn/articles/A37463-2004Mar30.html, and see the full report at http://nature.org/pressroom/press/press1389.html.
DON'T TAKE TAX EXEMPT STATUS FOR GRANTED. Signs on the horizon say the coming year will see renewed debate over whether some not-for-profit hospitals deserve the tax breaks they receive. In March, Rep. William M. Thomas (R-Cal.), Chairman of the House Ways and Means Committee, announced that both his committee and the Department of Health and Human Services, plan to investigate nonprofit organizations, including hospitals, to determine if the taxpayers are receiving benefits from these organizations commensurate with the preferred tax treatment they receive.
Thomas predicted that "we might be more specific in outlining responsibilities or duties of these institutions if they prefer to remain under the tax preferred structure." For more information, see "Nonprofit Hospitals and Systems: On the Verge of a National Debate?, in Health Leaders News, March 24, 2004 (http://www.healthleaders.com/news/feature1.php?
contentid=53484). Or, see a copy of Thomas' remarks published on the Kaiser Family Foundation's website: http://www.kaisernetwork.org/health_cast/uploaded_files/
030204_fah_transcript.pdf?contentid=51966.
EXECUTIVE COMPENSATION ADVICE. Board oversight of executive compensation remains a burning issue for not-for-profit organizations. High profile cases such as CareFirst (regulators question big executive payday if health plan is sold), Allina and HealthPartners (two Minneapolis giants challenged by the state attorney general) typify how state regulators, charity officials and the IRS are closely examining the process by which exempt organizations' governing boards oversee executive pay and bonuses.
In a new article, McDermott, Will and Emery attorneys Michael W. Peregrine and Ralph DeJong, and compensation consultant Tim Cotter, make recommendations on the qualifications for members of executive comp committees and list their key responsibilities. The article, "A General Counsel's Guide: Advising the Board on Executive Compensation Decisions,” is published in the current edition of Exempt Organization Tax Review. For information, contact Michael Peregrine at MWE, 312 372 2000.
STUDY SAYS HEALTHCARE TO BE CAMPAIGN ISSUE. Many observers believe health insurance will emerge as an issue in this year's elections and lead to some serious policy discussions in Washington in the next Congress. Pocketbook issues are the driver. Employees are paying a larger share of their health benefits in both premium contributions and out-of-pocket expenses, according to a study by Fidelity Investments. (The "Health Benefits and Behavior Study 2004" can be found at https://www.fidelity.com/ under "News Media.").
Health insurance has been a major issue in several labor negotiations around the country, while the ranks of the uninsured continue to grow as smaller employers drop or curtail health coverage, especially for part-time workers.
Nearly six in 10 Americans say presidential and congressional candidates' views on health care reform will be a "very important" factor in determining who they vote for this November, according to a nationally representative survey conducted for the Commonwealth Fund from Sept 3, 2003 through Jan. 4, 2004. (The survey report can be found at http://www.cmwf.org.)
FUNDING CARE FOR THE UNINSURED WOULD SAVE THE ECONOMY MONEY. Adding fuel (and some facts) to the public policy fires is a new study published in Health Affairs that argues that "universal health insurance coverage may cost society less than the economic losses related to un-insurance.” The study estimates "the economic loss related to 44 million Americans' lack of health insurance coverage is $65-$130 billion a year, more than the estimated $34-$69 billion it could cost to provide the uninsured with the kind and amount of health care enjoyed by those with coverage.” For more information, go to http://content.healthaffairs.org/cgi/content/abstract/
hlthaff.w4.157.
NEW JERSEY PONDERING NURSING RATIOS BILL. As predicted last year, legislative proposals to mandate nurse staffing ratios are spreading beyond California, where a new law went into effect in January. The union of hospital nurses in New Jersey is pushing a bill in the state Legislature to require hospitals to follow strict nurse-to-patient staffing levels, and is also pushing its demands in contract negotiations with nearly a dozen hospital this year, according to an article in the Bergen Record. In California, as many as 80% of the 300 state hospitals that self-report each week to the California Healthcare Association say that they are not in compliance with the state's new nurse-to-patient staffing ratios, according to a report in the Stockton Record on March 28. Hospitals are having problems meeting the requirements because of a statewide nursing shortage. The final verdict on the impact of the Golden State's legislation is yet to come. For information, go to http://www.californiahealthline.org/index.cfm?
Action=dspItem&itemID=101552.
CHANGING YOUR E-MAIL ADDRESS. To change your e-mail address on our subscriber list, follow the simple instructions at the end of this message. To keep the Great Boards newsletter free, we ask subscribers to update their own records right on line.
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FEEDBACK. Have a question or topic you'd like us to address? Interested in retreat or consulting services for your board? Visit www.GreatBoards.org and send a message from the Contact page or send an e-mail to bbader@GreatBoards.org.
Barry S. Bader, Bader & Associates
12225 Seline Way, Potomac MD 20854, 301-340-0903
www.GreatBoards.org *** bbader@GreatBoards.org