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Effective Use of Health System Board Committees
Friday, February 10, 2017

An interesting new survey on board committee practice from a major accounting firm provides useful fodder for governance committee consideration. This is especially the case as some health system boards apply a committee structure that may be insufficiently responsive to current operational, financial, strategic, technical and legal challenges facing the organization.

Several aspects of the survey results may draw particular governance committee attention. For example, a significant majority of surveyed companies are adding to the overall roster of committees, typically in response to evolving board agendas, new governance pressures and priorities, and operational, legal and other environmental challenges. Also, the most responsibility delegated from the board is extended to the executive, audit, finance, compliance and risk committees. In addition, the compliance, risk and technology committees have seen the most growth in the past three years (in terms of creation as a separate body). There is also a recognition that certain emerging functions (e.g., cyber, digital transformation and information technology) should not automatically be assigned to the audit committee but may deserve their own committee platform.

From a health system perspective, perhaps the greatest value of this new survey is the prompt it provides to revisit the sufficiency and effectiveness of the board’s existing committee structure. With guidance from the general counsel, the committee might prudently address such questions as whether (a) the board’s committee structure remains appropriate given current board priorities and system-specific needs; (b) the board is sufficiently familiar with relevant best practices, and peer company approaches, as to committee oversight responsibilities; (c) the results of board effectiveness assessments reveal governance problems that might be resolved with changes in committee structure; and (d) a more proactive committee practice could enhance board refreshment and oversight goals.

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