A new publication from the National Association of Corporate Directors (NACD), “Building the Strategic Asset Board, provides useful lessons to nonprofit health system boards as they work to maintain their ability to respond (in terms of size, composition, expertise and commitment) to the velocity of change in the health industry. In essence, it is a call for formal “continuous improvement” processes at the board level.

NACD does not view traditional board refreshment efforts (e.g., tenure and age limits) as sufficient to position the boards to respond to evolving industry dynamics. Rather, its recommendation is for the board to pursue a more proactive approach that incorporates the following actions, among others: (a) continuous improvement of board and individual director skills and boardroom processes; (b) supporting the director recruitment process with an awareness of expected board competency needs; (c) a more regular review and update of governance principles; (d) coordinating the director recruitment process with the length of the organization’s strategic plan; (e) more aggressive board education requirements; (f) more frequent evaluations of board, committees and individual directors; and (g) specific and regularly updated written expectations regarding director renomination.

NACD’s approach contemplates a more holistic, aggressive means for positioning boards to respond to industry change. As such, it may be worthy for governance committee consideration.

Corporate Law and Governance Update

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