Health Care Corporate Governance: Seeking Clarity on the Role Description of the Board Chair
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What governance challenges are currently affecting health‑care boards?
This episode of AHLA Speaking of Health Law is brought to you by AHLA members and donors like you. For more information, visit American Health Law.org.
Hello everyone, this is Rob Gerberry. I'm the president elect of the American Health Law Association. I'd like to welcome you to the latest in our continuing series of podcasts on corporate governance issues affecting healthcare organizations. Today's episode finds us already in early July, with the annual meeting just behind us, but with a continued flow of governance governance developments popping up from the government From case law and like today from the media. From time to time during the history of our podcast series, we've discussed elements of the critical problems of the board management dysfunction and how the failure of the respective parties to fully appreciate each other's roles and responsibilities contributes to the breakdown of an otherwise effective governance system.
A clear delineation of the role of the board versus the role of the management team should be a fundamental collective responsibility of both parties. And an important component of the larger challenge in establishing clarity between the role of the board chair. And that of the CEO. From what we've seen of late Playing itself out in our business news of is a perfect example of what happens when the corporate leadership lacks clarity at that level. When confusion reigns between the responsibilities of the chair and And that of the CEO. And to help us discuss this challenge, we are as always joined by my HLA colleague and friend Michael Peregrine, who is both an HLA fellow. And a fellow the American College of Governance Council.
So Michael, welcome.
Uh Rob, happy to be with you.
Michael, what can you tell us about this latest controversy? Maybe how it developed and the relevance you see to the healthcare industry uh leadership at large?
Uh Rob, is to kinda to take a step back, uh I have always said over the years of my practice to tell clients that uh to always read uh the Journal and the Times and maybe some others there every day because there's always going to be something at least once or twice a week that deals directly with their corporate governance duties. It never fails. And this is, I think, a perfect example. Um uh this controversy aro arose in uh late May when the uh B P chair, and that's the old British petroleum B P oil, you know, where some of us get our gas was removed with immediate effect. And that's the term of art. That means right now your plane is boarding, we'll escort you to the gate. Following board receipt of whistleblower complaints.
involving certain, you know, alleged chair conduct. Now the board spokesperson described the grounds for removing uh the chair as involving important governance standards, oversight and conduct. If that's not uh a a mouthful. Uh but uh there were lots of media reports on this event.
really to raise some important governance questions. Um from everything that I read, the allegations kind of included verbally abusive conduct. I think that's a fancy way of saying yelling at people, uh at both junior and senior staff members, mishandling company information, which is that code for breaching confidentiality. And withholding information from the board. That I get. Now the chair had only served this position for less than a year. Uh and and I wanna remind our listeners, this is a situation where the chair and the CEO positions are separate, which I think is pretty standard course for those of our members who are working with not for profit corporations, maybe less so who uh who uh who work with for profits or PE firms and the uh we have a independent lead director situation.
But I I think Again, the value of this for our members is that it offers a real teach, I think a real teaching moment. And I know that phrase is tiresome from time to time, but I think it really gives us an opportunity to chat with our leadership and the board on the importance of role clarity in both the boardroom and the executive suite.
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Chapters
4 chapters
1
What governance challenges are currently affecting health‑care boards?
0:05–9:20
2
How did the BP board‑chair controversy illustrate role‑confusion between chair and CEO?
9:20–17:40
3
What are the core responsibilities that define an independent board chair?
17:40–26:13
4
How can boards separate process duties from presiding officer duties for the chair?
26:13–29:04
Speakers
2 identifiedMore from AHLA's Speaking of Health Law
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