Following best practices that enable high performance, not-for-profit boards have significantly reduced their member size over the last decade. Now, emerging challenges—led by health-care reform and the evolution of the health information revolution—will change the optimally desired inventory of competencies and perspectives required for high-performing boards over the next decade. The puzzle is to identify and assemble a broader set of board characteristics among an increasingly smaller group of members. Succession planning will become increasingly complex and will require an intentional, objective, and detailed process that is actively revisited and pursued.
The major dimensions of board composition have also grown more complex. Summarized in the table below are the six areas we feel are critical to establishing a diverse, competent board.
BOARD COMPOSITION DIMENSIONS
- Experience—actual, historical, or current experience in “doing”
- Expertise—subject or discipline content knowledge
- Human Diversity—race/ethnicity, gender, age, geographic residences, etc.
- Stakeholder Perspectives—“system” participant/“stakeholders”
- Community and/or Industry Politics—leaders/influencers of environment/philanthropists
- Group Dynamics—complementary interpersonal attributes
The competency dimension distinguishes between experiential competencies and content/expertise competencies because specific competencies in each of these areas will become critical in the next decade of change. For example, specific experience in implementing complex information technologies will be important to organizations implementing the electronic medical record. In parallel, content expertise in health/disease management and medical informatics—how you extract value from the new information capability—will be key to health-care quality and service work.
Having diverse and relevant perspectives to draw on also will be critical to high-performance governance, and we have noted that these include human diversity and stakeholder perspectives—both of which are valuable in forming functional patient-centered “systems” of care. This dimension is also critical when we consider the greater scrutiny by the IRS through the Form 990 of an organization’s community benefit.
Finally, the political dimension presents the challenge of considering both broad environmental political factors as well as the all-important group dynamics of human interaction and leadership. This helps build the organization’s ability to influence policy as well as enhance fund development. Overall, this dimension is of vital importance to building a board capable of generative thinking and leadership.
The last piece of the puzzle is to create and implement a course of action. The process for recalibrating board composition through succession planning begins with the generative board activity of identifying the optimal attributes in each of the above dimensions. This can be done through a facilitated board process that uses a combination of the organization’s strategic plan, enterprise risk management plan, and management’s forecast of critical operating challenges and decision points in the future. With the optimal composition profile completed, the board can create a current inventory profile along the desired profile dimensions. We recommend that this be accomplished through an objective party, given that survey tools often result in under or over representation of personal characteristics. Finally, the recalibration work of the board can be delegated to the nominating committee for the challenge of conducting a nuanced succession search process that best assembles the “pieces of the board composition puzzle.”
Apex advises boards on succession planning and facilitates the development of a succession-planning matrix that boards can use in defining succession-planning targets and in identifying optimal board candidates.