Are Your Physicians Equipped to Serve on Your Board?
The Challenges Facing Physician Boards
Even before COVID 19, independent physician groups were facing daunting challenges – including how to remain independent and financially viable in the face of drastic changes to the economics of private practice.
See our recent COVID 19 notice to clients.
Today, those same groups are struggling to figure out how to re-think their entire approach to providing care on a daily basis. They now need to navigate an even more uncertain future.
What Qualifies Someone to Sit on a Board?
Some physician groups have 2-3,000 employees and generate $50 Million or more in annual revenue. What qualifies someone to serve on a Board of Directors of a company this large? Assume for a minute that this is a manufacturing company. Board members would commonly include local businesspeople, chosen for specific business experience and expertise.
Would you, for instance, fill the Board of Directors of a manufacturing company with employees and managers from the front line? This is, in essence, what we do with physician groups.
[Physicians] have much to offer – but they need to understand the unique nature of the role and some of the potential shortcomings and biases they bring to the Board Room.
Granted, these are shareholders and they need a say in the group's future. Are they ideally suited, though, to make long-term strategic decisions for a company that is this large? In fact, the finances of a practice, the products and services, the market dynamics and the regulatory environment, are far more complex than most businesses.
While physicians are, as a group, intelligent and well-educated, their experience as a frontline physician would not, generally, qualify them to sit on such a Board. It can work. They are key owners and have much to offer – but they need to understand the unique nature of the role and some of the potential shortcomings and biases they bring to the Board Room.
(Related Blog: Physicians need to PRACTICE leadership – it may not come naturally.)
A Unique Role
It’s one thing for a physician to take on the challenge of leading a department, or to serve as a leader in what is, primarily, a clinical and operational role. It really is something else, entirely, to take on the role of Board member – thinking strategically, about the entire organization.
Physicians in leadership roles often struggle with too narrow a functional orientation. They see the world through the lens of their day-to-day experience or from the point of view of their own specialty. They may be adept at advocating on behalf of their department and colleagues, but can they think in terms of the larger organization?
As a Board member, this dilemma, and the potential conflicts, increase exponentially. A Board member’s SOLE responsibility is to make decisions on behalf of the long-term best interests of the entire organization – including not only physicians, but staff, as well. This may conflict with the immediate needs/desires of physician colleagues or even the Board member’s own self-interests!
[The Board's decisions] may conflict with the immediate needs/desires of physician colleagues or even the Board member’s own self-interests!
You don’t have this challenge with a true, independent Board. It can be VERY difficult for physicians to switch hats and think like a Board member. Moreover, most physicians come to the role with little in the way of relevant business or strategy experience. They need the humility to recognize this gap.
It’s Tough to Lead Physician Colleagues
It's challenging, in any situation for physicians to lead their physician colleagues, for a number of reasons, including:
Physicians crave autonomy. They do not enjoy the possibility of subjugating their authority to another - either clinically or administratively.
Physicians are trained to be independent decision-makers.
Because communication is always imperfect, physicians will often doubt the decisions made by others because they are unsure if alloptions/concerns have been considered.
Physician Board members need to accept these realities andunderstand that their colleagues may not like the Board’s decisions.
We work with nursing leaders, too!
What if a Board Member Disagrees with the Board’s Decision?
The very people on the Board are the people on the frontlines who have to deal with the Board’s decisions. It’s not uncommon for the Board to make a strategicor policy decision that will have a negative impact on Board members when theyare in the clinic the very next day. This does NOT happen in most companies.
What does a Board member do when he or she disagrees with the Board’s decision? This is where the “rubber meets the road” when it comes to a physician serving on the Board. If the Board makes a decision in the group’s best interests, a Board member must, by the job description, support it and, certainly, not undermine it. He or she has three choices:
Comply and Support the Decision – That’s part of being in a group.
Try to Get it Changed – In the appropriate forum. Until it is changed, keep adhering to the decision; or
Self-Select from the Board or out of the Group.If a physician CANNOT in good conscious, support the decisions of the Board, heor she needs to resign from the Board and, potentially, from the group.
With all of this in mind, physicians should give serious thought to what it means to be on the Board. It’s not uncommon that Board members have never even looked at the By-Laws to understand their role and the potential for conflicts.
Practical Advice
Make the job description and expectations clear to those interested in serving on the Board, and to the those who will be voting on candidates.
When evaluating potential Board members, consider a broader set of competencies. Some groups even establish minimum experience requirements (including previous leadership experience and/or training). Even if you don’t “require” these skills, start a dialogue among the group about the need to nominate physicians with relevant business, financial, strategic, leadership, or even technology, experience and expertise.
Ensure you provide Board members with education, information and resources. This is, particularly, important for new Board members. Emphasize, and potentially require, on-going education on the Board's responsibilities, important business topics, and market realities.
Create a structure and tools that encourage lively, productive, debate. Many physicians have not been trained in how leadership groups should function, or how to encourage dissenting opinions in a productive manner.
Place an emphasis on communication as a critical skill – both within the group and between the group and the executive leadership team. This is, often, a serious gap that impedes productive problem-solving and strategic thinking.
Be sure that Board members understand the difference between the roles of the Board and of the executive team.
