Multi-institutional arrangements: relationships between governing boards and hospital chief executive officers

Abstract

This investigation focuses on the impact of multi-institutional arrangements on the role of governing boards in limiting or enhancing the managerial autonomy of individual hospitals. Data from a 1979 Special Survey by the American Hospital Association (N = 4213) are used to examine governing board-administrator relationships as a function of the degree of autonomy and scope of responsibility of the hospital governing board. It is hypothesized that governing boards responsible for multiple hospitals or for multiple nonhospital organizations and those boards accountable to a higher organizational authority will exercise more formal control over hospital chief executive officers (CEOs) than will boards of single or autonomous hospitals. The analysis assumes that formal control by the governing board over the management function of the individual hospital is exercised partly through soliciting or limiting participation by hospital administrators in key policy decisions and through the evaluation of administrative performance. Therefore, it is anticipated that hospitals governed by boards with multiple responsibilities as well as hospitals governed by boards accountable to a higher authority will be (1) less likely to have CEOs who are members of the governing board executive committee, (2) more likely to have annual performance reviews of the CEO by the governing board, and (3) more likely to have such reviews conducted according to preestablished criteria. Study results provide general support for the hypotheses with respect to hospital boards with multiple responsibilities: the data suggest that such boards do exercise greater control over hospital administrators and these effects do appear to be stronger for hospitals in the private sector. Hospitals governed by boards accountable to a higher authority, however, are more likely to have CEOs who are members of the governing board executive committee--a pattern in direct opposition to that hypothesized. Furthermore, these boards are no more likely to conduct annual CEO performance reviews than are boards with more autonomy. Boards accountable to higher authorities are more likely, however, to use preestablished criteria when such reviews are conducted. This general pattern is similar whether hospital boards are accountable to religious authorities, to investor-owned corporate boards, or to the boards of not-for-profit multi-institutional systems. A different pattern emerges, however, for boards accountable to a state, county, or local government authority.(ABSTRACT TRUNCATED AT 400 WORDS)