The effects of governing board configuration on profound organizational change in hospitals

Abstract

This study extends the literature on governing boards and organizational change by examining how governing board configurations have influenced profound organizational change in U.S. hospitals, and the conditions under which such change occurs. Hospitals governed by boards that more closely resembled a corporate governance model were more likely to experience positive changes such as diversification and merger and less likely to undergo negative changes such as closure. Organizational performance influenced change, but largely independent of governance configurations. Only in the case of closure did we find that governance configuration operated jointly with organizational performance.