Governance Education Frequently Asked Questions
1. What are the basic expectations of a hospital board member?
Board member roles and responsibilities include:
- Being committed to the Governing Board, the hospital and the community the hospital serves
- Avoiding conflicts of interest
- Observing high standards of integrity
- Maintaining the confidentiality of Board meetings
- Preparing for each Board meeting by studying the agenda and supporting information
- Attending the entire Board meeting(s)
- Participating in Board meetings with their opinions
- Carrying out committee and Board assignments
- Publicly supporting Board actions even if they do not agree with the decision
- Having some knowledge about hospital and health care systems
- Attending continuing education programs
Governing Board Orientation Manual 2006 WSHA pg.11 http://wsha-archive.seattlewebgroup.com/page.cfm?ID=boardManual
Source: WSHA Governing Board Orientation Manual
2. How are the expectations of a public hospital district board member different?
Since Public Hospital Districts (PHDs) are categorized as Special Purpose Districts, they are considered governmental entities. With this distinction, come many different privileges and regulations. The members of PHD board are elected commissioners and consist of three, five or seven members. There are no specific education requirements to serve as a commissioner. The meetings are always open to the public and become public record. In addition to public meetings, commissioners must file a statement of financial affairs with the Public Disclosures Commission each year. Commissioners are responsible for overseeing the hospital district’s policies and organization with respect to the operation of the district, including the delivery of quality patient care. The board’s role is to adopt the necessary general policies and to delegate the day-to-day operational responsibility with respect to these policies to the district administrator.
PHDs can use unique governmental powers to finance their activities. They are able to tax levies, condemn property, hold elections or join forces with other governmental agencies. Also, PHDs are immune from federal taxation, state property, business and occupation, and retail sales tax. Conversely, they are limited by statutory, constitutional, and regulatory provisions. PHDs are prohibited from lending public credit, owning stock, and giving away public property as gifts.
For more information see Public Hospital District Commissioner Guide: http://wsha-archive.seattlewebgroup.com/page.cfm?ID=govOrientation
To read the law pertaining to PHDs (70.44) go to the following link: http://apps.leg.wa.gov/RCW/default.aspx?cite=70.44
To read the Open Meeting Act go to: http://apps.leg.wa.gov/RCW/default.aspx?cite=42.30.010
Source: AWPHD Public Hospital District Commissioner Guide
3. What is Directors and Officers' liability insurance and why is it needed?
“Directors and Officers’ liability insurance (D&O insurance) is designed to protect the company’s board members and officers from claims made against them alleging that they have acted wrongfully in carrying out their duties to that entity, to third parties, to employees or to the government. It is also designed to insure the hospital itself for its obligation to provide indemnity for such claims. Indemnification means the hospital will take responsibility for any claims that name the board members and will pay for lawyers to defend against those claims” (Trustee Magazine June 2009). D&O provides coverage for intentional actions taken by an organization’s board of directors or managers. Hospitals usually cover negligent acts that harm someone. For example, if a board member of the hospital negligently causes someone “bodily injury, personal injury or property damage” from failing to do what a reasonable person would do in that situation, the general liability coverage would come into play.
What Trustees Need to Know about Their Organization’s D&O Insurance:
- Who specifically is and is not included in coverage
- What is and is not included in coverage
- Limits of coverage, such as claims made during the covered period only or past acts as well
- Extent of “covered loss,” such as attorney’s fees, fines, penalties, punitive damages, ect.
- Potential risks and preventative measures that should be taken to avoid them
Source: Trustee: The Magazine for Health Care Governance June 2009 Vol 62 No 6
4. What does the term "fiduciary responsibility" mean?
Governing boards have four overarching responsibilities – envisioning the organization’s future, ensuring patient safety and quality, hiring the chief executive officer, and maintaining the organization’s fiscal health. It is in the latter role that fiduciary responsibility enters the picture.
There are many ways to explain fiduciary responsibility. One, perhaps narrower way, is to state that corporate board members must:
- Avoid conflicts of interest
- Act in the interest of the organization rather than the member’s personal interest
- Provide oversight to assure that all organization business is transacted legally
- Make decisions to protect the assets of the corporation.
Dennis Pointer, Ph.D., noted professor and writer in matters of governance explains fiduciary responsibility a bit more broadly. He writes that board members “… are accountable for being loyal to the stakeholders, careful in discharging governance responsibilities, and obedient and compliant with the law”
Here are a number of specific fiduciary tasks which board members undertake:
- Approving the budget and providing for day-to-day cash needs
- Ensuring the proper investment of assets
- Ensuring sufficient capital to deal with any future problems related to the hospital’s financial stability
- Determining fiscal policy relating to insurance coverage, discount policies and third-party reimbursement
- Being alert to and creating philanthropic opportunities for the hospital
- Determining policy on provision of needed community services
Governing Board Orientation Manual 2006 WSHA pg. 12 http://wsha-archive.seattlewebgroup.com/page.cfm?ID=boardManual
Source: Fiduciary – Fiduciary Responsibility, Jean Murray, About.com
Navigating the Board Room ,pp. 13-15, Dennis Pointer, Ph.D
WSHA Governing Board Orientation Manual
5. How do we identify and manage conflicts of interest?
A conflict of interest causes the fiduciary relationship between the trustee and the organization to suffer. This compromises the board member’s ability to think impartially and in the best interest of the organization. For ideas on how to manage and identify conflicts of interest see the following organization’s example http://wsha-archive.seattlewebgroup.com/page.cfm?ID=govCoI. Additional information can be found on page 15 of the Governance Education Manual. http://wsha-archive.seattlewebgroup.com/page.cfm?ID=boardManual
Since Public Hospital Districts (PHDs) are governmental entities, they have specific guidelines for identifying and mitigating conflicts of interest. The details can be found on pg. 14 of the Public Hospital District Commissioner Guide. http://wsha-archive.seattlewebgroup.com/page.cfm?ID=govOrientation
Sources: WSHA Governing Board Orientation Manual AWPHD Public Hospital District Commissioner Guide Franciscan Health System
6. How do we get the quality report down to a few easily understood metrics like we have managed to do with the financial report?
With the overwhelming amount of patient safety and quality information, the Patient Safety Team has developed a stream line dashboard for CEOs and trustees. This dashboard has five categories: Quality/ Safety Excellence, Service Excellence, Employee/ Safety Satisfaction, Finance/ Operation Viability and Market Growth. It can be found on the WSHA website under the Patient Safety Program Section. Then click on the “For CEOs and Trustees” tab and find the Model Dashboard Report in the middle of the page.
Web Link to Patient Safety Program: http://wsha-archive.seattlewebgroup.com/page.cfm?ID=0207
Source: WSHA Patient Safety Team
7. Who may serve on committees of public hospital district boards?
Public hospital district board committees, subcommittees and advisory committees can be composed of both board members and non-board members appointed by the board. In fact, public hospital district boards may rely on the appointment of non-board members to committees to assist in the decision making process or to help gather information to enhance the board’s decision making processes.
In defining committees, AGO 1986 No. 16 states “that there is nothing in the definition that restricts the composition of the group to members of the governing body or, for that matter, to nonmembers of the governing body.”
8. Are public hospital district board committee meetings subject to the same oversight as the board meetings?
While all public hospital district board meetings are required to be open to the public, committee meetings do not necessarily have the same requirements.
- A public hospital district board meeting occurs when a quorum (a majority) of members of the board discuss or consider issues concerning matters of the board no matter where those discussions take place and; therefore, is subject to the Open Public Meetings Act. RCW 42.30
- If a public hospital district board committee or subcommittee is comprised of a majority of the governing board, such committee is considered to be the governing board and is subject to the same notification and meeting requirements as the public hospital board.
- If a public hospital district board committee acts on behalf of the governing board, conducts hearings, or takes testimony or public comment, the committee is considered a sub-agency of the board and is subject to the Open Public Meetings Act regardless of its composition. RCW 42.30.020(2)
- If a public hospital district board committee, consisting of less than a quorum of board members, is simply gathering information to provide recommendations to the governing board, such action is usually not subject to the Open Public Meetings Act and subject to the Open Public Meetings Act only when obtaining public input or at any time it exercises actual or de facto decision making power. AGO 1986 No. 16
“While an argument can be made that a committee may be required to give notice for only those meetings when it will be taking testimony or public comment or exercising decision-making authority for the governing body, it would be prudent for such committees to conduct all their business in open meetings.”