Stepping Up and Stepping In: Defining the Board’s Role in a Crisis

No hospital is immune to the strains caused by the global pandemic, but nowhere has the impact been felt more deeply than in rural communities. A lack of resources and already slim operating margins have been compounded by the cancelation of elective procedures, which traditionally were seen as a lifeline for rural and community access hospitals. Federal aid from the CARES Act and the Paycheck Protection Program are helping to stop the bleeding, but emerging from the pandemic will require a lot more than funding, says Peter Goodspeed, vice president of executive search for HealthTechS3.

“To be successful, or even to survive, the hospital board has a big role to play,” says Goodspeed, who will be presenting the webinar, The Role of a Rural Hospital’s Board in a Time of Crisis: How the Hospital Board and CEO Ensure and Organization’s Success During COVID-19, on Friday, Sept. 4.

Goodspeed’s recommended reading on the topic is a 2019 article from Deloitte’s Global Center for Corporate Governance that was revised and re-released this year in response to the COVID-19 crisis. While not specifically geared toward hospital boards, or ones in rural communities, the article charges boards of all types to respond to the crisis appropriately: “Stepping in may be uncomfortable but stepping aside is not an option.”

But, how—and what should the board’s role look like during a crisis? For starters, it’s important to remember the role of a board in any organization, whether there’s a crisis at hand or not. “

“…Boards are not there to run the business but to provide guidance, perspective and oversight,” the Deloitte article points out. “…The best default position is that the board is there to support and guide management, ensure they are thinking about the widest range of stakeholders in their communications and responses, and to bring the full scope of the board’s external experiences to bear.”

But, intervention might be needed. A key member of the executive team may contract the virus, which would require board intervention. Executives who were already eyeing retirement before the pandemic may look to exit sooner, requiring the board to locate an interim leader. The executive team may stave off the virus and plan to stick around and still specifically request help from the board. When that happens, boards can respond in the following ways, according to the Deloitte article:

• Reinforce the purpose of the organization with management.

• Help set the tone for the crisis response and ensure effective follow-through.

• In equal measure, support and challenge the hospital’s executives.

• Consider difficult “What if?” questions that executives dealing with day-to-day issues lack the bandwidth to address.

• Start discussions around succession and contingency planning.

• Maintain “situational awareness” of the bigger picture.

This final point, the Deloitte authors argue, is a board’s true strength in a crisis: “The diversity of experience that many directors bring to the boardroom table and the ability to bring in the outside-in perspective can be a strength when confronting the unprecedented. And this broader awareness helps the board maintain its independent views, adding value to the executive team and the whole organization.”

In response to the global pandemic, GovernWell and the Integrated Health Association compiled a briefing for nonprofit healthcare boards that provided a seven-point framework for appropriate board responses. These include ensuring the following are in place:

• An effective emergency preparedness plan

• Effective infection identification, management and prevention

• A safe, healthy and sufficiently trained workforce

• Ethical management of scarce resources

• Effective crisis communication plan

On the point of communication, the briefing underscored the importance of a measured, consistent response to the public. “Board members will be asked questions by the public or by local news media; however, there should be one designated hospital communications spokesperson or small team in place to consistently communicate the hospital’s message. Board members should refer any questions to the identified process or person—and not improvise responses to inquiries they receive.”

In addition to these five areas that focus on dealing with the crisis at hand, boards are charged with understanding the financial implications of the crisis and the hospital leadership’s response, as well as the “look back”—evaluating the hospital’s emergency response, then recalibrating as the crisis continues or new threats emerge.

“The board’s role in a pandemic or any disaster does not end once the immediate event has ended,” the briefing concludes. “When life is returning to normal, the board should be involved in thoroughly assessing the hospital’s response to the COVID-19 pandemic. As with any crisis, some things will have gone according to plan. Some will not. The board needs to know the ‘lessons learned’ as well as potential opportunities for improvement as part of the hospital’s future emergency preparedness planning.” Join Goodspeed on Sept. 4 to find out more about the board’s new role and responsibilities amid the COVID-19 pandemic and how board members can best support their executives in navigating the challenges. Reserve your spot for the webinar today.