Governing boards and profound organizational change in hospitals

Abstract

Over the past decade the importance of governing boards as policy-making setting and oversight units within organizations has increased dramatically. Although this is true for both corporate- and private-sector organizations (Bacon and Brown 1977; Gelman 1988), it is particularly relevant to the health sector. Hospital governing boards, long considered inconsequential in hospital management, have recently become subject to closer scrutiny. The role of governing boards in decisions affecting hospital strategy and hospital performance is once again a topic of some interest in boardrooms and hospital trade journals. Impressive evidence of the renewed interest in governance is provided by the funding of an instructional consortium by the S.K. Kellogg Foundation to help strengthen trusteeship and governing board decision making, and to improve education for health services managers in the area of governance. Members of the consortium include the Hospital Research and Educational Trust, the American Hospital Association, the American College of Healthcare Executives, and the Association for University Programs in Health Administration. Among the activities being undertaken by this consortium is the development of a self-assessment tool/methodology for boards, a bibliography and reference guide on effective governance for practicing trustees, research workshops for faculty in health administration programs, and a teaching guide on governance and trustee leadership. Despite this interest, the question with which we began this article persists. Do governing boards make a difference? In the course of our review of previous work on governance we found that, more often than not, that question has been transformed into: how do boards influence hospital performance? And very often that question has been further narrowed into: which board structure leads to better hospital performance? We have argued for a respecification of the initial question. Rather than pursuing a definition of the maximally performing governing board, we should perhaps shift our focus back to a fuller understanding of board structure and function, and its influence on hospital change. The model developed here combines four essential, and very basic, questions: 1. What are the basic dimensions that underlie structural variation in different types of governing boards? 2. How do these board types influence structural change in hospitals? 3. How is the effect of board influence on change itself likely to change over time as a function of the hospital's general pattern of growth, decline, stability, or instability?(ABSTRACT TRUNCATED AT 400 WORDS)