Towards Exceptional Community Healthcare: Best Practices for Board Governance 

Community healthcare volunteer board members play a crucial role in shaping the organization’s future and ensuring it delivers high-quality health services to their community. Here, we explore best practices for community healthcare board governance that will make volunteer board members even more effective in their roles so that they can ensure healthcare services are as good as they can be.

But first, it’s essential to familiarize yourself with the principles and strategies that underpin effective board governance in the context of community healthcare — from setting strategic goals and overseeing financial stewardship to fostering solid relationships with institutional stakeholders.

Technology and Governance

The word “governance” stems from the Latin word gubernare, which means to steer or rule. As governance in healthcare boards continues to evolve, technology has made it possible for community healthcare organizations to not only access increasing amounts of data, but also use it effectively for decision-making, collaboration and achievement of mission goals.

However, the basics of good governance and new best practices are evolving as nonprofit healthcare organizations explore how to apply existing best practices to the processes of data collection, dissemination, and decision making.

While technology is creating rapid change within the healthcare industry, the evolution of board management software is helping boards to document and store records that support best practices, such as board policies and other documents that demonstrate how they govern data.

Download our Guide to Board Effectiveness to identify areas of improvement and apply best practices for a more effective, productive and successful board.

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The Basics of Best Practices for Governance

For healthcare organizations, best practices for governance are rooted in a full commitment to fiduciary duties and accountability.

The Internal Revenue Service (IRS) code requires nonprofit organizations to exist for charitable purposes. Nonprofit organizations are primarily governed by state law. Charitable trust laws in some states consider that a healthcare organization’s assets are held in trust for the benefit of the community.

In connection with the benefit of attaining tax-exempt status, nonprofit healthcare organizations must serve the interests of the community, and not those of individuals. The Office of the Attorney General can also hold nonprofit hospitals and healthcare organizations accountable.

Best practices in healthcare governance also require accountability. Today’s stakeholders hold high expectations for boards; they expect healthcare boards to maintain a proactive and interactive board culture.

While it’s an honor to serve on a board, board members must pursue their duties and responsibilities doggedly to earn and maintain the trust of their stakeholders and the public.

Healthcare governance requires board members to have a comprehensive understanding of fiduciary duties and to fulfill them faithfully. The basic duties of volunteer board directors are oversight and strategic planning; to fulfill these responsibilities, board directors must adhere to the duties of care, loyalty and obedience.

Duty of Care

The duty of care requires board directors to provide strong oversight over management without succumbing to micromanagement practices. It requires board directors to make informed decisions by seeking out information.

The premise of due inquiry means that board directors should question the validity and completeness of the information they receive.

Duty of Loyalty

The duty of loyalty protects healthcare organizations from board members and other groups or individuals who may be trying to personally or professionally gain from the organization in some way.

The duty of loyalty specifically addresses the importance of appropriately dealing with conflicts of interests. This doesn’t necessarily mean that board directors can’t have a known conflict of interest; it just means that they need to give the board notice if they have a conflict and state the nature of their interest.

Board directors who have a conflict of interest can fulfill their duty of loyalty as long as they refrain from deliberating votes on matters where they have a conflict of interest. By adhering to these best practices in all situations, boards ensure that all transactions are transparent and fair.

Duty of Obedience

Over the last several years, federal and state governments have been more closely scrutinizing nonprofit healthcare boards to ensure they’re compliant with the laws, rules and regulations that fall under the duty of obedience.

The duty of obedience also falls under best practices for governance to honor the terms of their bylaws, mission, policies and procedures, and to act within the scope of their authority at all times.

Best Practices for Healthcare Data Governance

There’s no question that we live and work in an analytically-driven industry. Data is one of the longest-lasting, and most key assets that any organization can possess.

The term “data governance” is evolving as technology begins to take center stage in every industry. It describes the way organizations manage and influence their use of data.

The more useful data that healthcare organizations can gather to aid the board in managing risks and understanding outcomes, the better.

Data governance should be minimally invasive, but still strive to achieve the greatest common good possible. Compliance with HIPAA is naturally of the utmost importance.

Overseeing and ensuring data quality must be a leadership priority that focuses on being valid, complete and timely.

Best practices for data access suggest a need for increased access to internal and external data. As data flows, processes should be put in place to protect and restrict data as appropriate.

In the area of data literacy, best practices indicate that boards should focus on quality and cost. Those who need data must understand what it means and how to use it in relation to their roles. Bear in mind that boards and managers can use data for both good and bad decision-making; they also need to be clear on what to do when data is incomplete or scarce.

As data governance takes a more vital role in board work, boards will need to establish a group to manage the quality, content, accessibility, literacy and priorities for data, such as a Data Governance Committee.

Best Practice for Governance Decisions

Nonprofit hospitals and healthcare organizations must be knowledgeable about the various relationships between the institution and its stakeholders in order to be accountable to them.

This is an important issue for boards to consider when making decisions. Governance decisions come into play most often when limited resources create competing demands.

Have you considered a board management solution to manage your governance and streamline board operations? With BoardEffect, you can automate board meeting processes, such as meeting preparation, minute-taking, document sharing and collaboration.

BoardEffect, a Diligent solution, leads in providing innovative boardroom technology to nonprofit organizations. Serving over 14,000 mission-driven organizations, Diligent empowers boards with tools to drive positive change. Our secure board management software streamlines operations, enhances governance practices, and enables confident decision-making. With BoardEffect, mission-driven organizations unlock potential, accelerate mission delivery, and make lasting impact in their communities.