Boards of directors are a fact of life for managers of corporations, in both healthcare and otherwise. Managers usually work with the board they find in place when they are hired. The board in turn normally delegates significant amounts of their powers to a full-time managerial staff headed by a chief executive officer (CEO). Although problems with boards are not a new issue, the last few years have seen the considerable controversy over the role and functioning of boards of both for-profit and nonprofit corporations in and out of the health sector.
Board Roles and Responsibilities
Boards are the legal entity responsible for governing the corporation. Although they delegate a good deal of their responsibility to a managerial group headed by a CEO, they do still retain the ultimate authority and responsibility for the enterprise. In practice, what does this mean for an organization’s board? The first role is that establishing or at least affirming the mission of the organization. Boards must periodically reexamine their mission and make either significant or minor modifications. The second crucial task of the directors is to select senior management, typically the CEO and possibly the chief operating officer COO or the chief financial officer CFO.
A third job of the board is to evaluate the CEO or senior management team. A fourth board function is program evaluation. While the board should never be involved in managing any organization programs, it should certainly approve and periodically evaluate new programs. A final role is an evaluation of the board, management, and the interactions between these two groups. The board must periodically go through a process of self-evaluation to ensure that it is structurally sound, that its committees are functioning probably and that it has the right number of people with the right mix of backgrounds. It must examine its processes, or how business is conducted within the board, to make sure that issues are fully and fairly vented.