Does the size of your board help or hinder its work? Many boards face this question in this age of increased pressure on healthcare organizations. While many boards can determine their own size, the boards of county, district, or city hospitals essentially have no say in the matter, as that has been determined by their creating authorities.
Many nonprofit boards tend to be larger than they should be, having grown too quickly in their formative years. Historically, hospitals want to retain support from as many stakeholder groups as possible; a seat on the board provided concrete evidence of the esteem the hospital had for the stakeholder group. Likewise, many hospitals wanted to have as many potential donors on the board as possible; representation from major community corporations brought those companies into the hospital’s family. Some hospitals also wanted geographic representation, particularly if they provided care in a large service area in a county or to several counties.
Today, however, the board must look critically at membership to find what is needed for the good of the organization, not as a reward or incentive to contribute.
Many studies have found the most effective board size is 9 to 17 members; health system boards average 16 to 17 members, while nonprofit hospital boards average 13 to 14 members (Prybil 2008).
As a comparison, when NACD (2010a) completed a study on the optimum size of boards for public companies, almost 60 percent of the respondents said a board should range from 8 to 11 members; the average size is 9.1, a small increase over the past three years. One reason for the increase may be that boards are recruiting more directors to broaden the board’s available skill sets.
When NACD (2010b) completed its survey of nonprofit corporations, almost 74 percent of directors thought having 11 to 17 members was ” just right.” Almost 50 percent thought that 18 members was too many for a board. Interestingly, however, the average size of the nonprofit boards surveyed by NACD was 19.8.
Although each board will need to determine its own magic number, as a general starting point, boards of fewer than 9 are usually too small, and boards of more than 18 are too large. With fewer than 9 members, it becomes easy for a few loud individuals to exercise more influence than might be healthy. With more than 18, it can be difficult to reach a consensus, keep all board members up-to-date, and make timely decisions in a turbulent environment. There are always exceptions. For example, one district hospital in Northern California has a 5-member board, and each member serves on several committees, which seems to work for that hospital. When evaluating their board’s size, members should consider:
- What work needs to be done
- What kind of expertise and skills would be useful
- How current members cope with the required workload
- How the current size of the board meets the organization’s needs.
Any changes in size can then be linked to the needs of the hospital rather than to the personalities of individual directors. In general, hospital and health system boards in the 10- to 17-seat range seem to reach decisions and function more efficiently than do larger or smaller boards.
Errol Biggs, Ph.D., FACHE, Vice Chairman at Practical Governance Group, also is Director of the Graduate Programs in Health Administration and Director for the Center for Health Administration at the University of Colorado Denver. Here he teaches governance in the center’s graduate on-campus and executive programs.
For more information, please call Practical Governance Group at 904-606-5744 (main) or reach us at info@pgghealthcare.com.
As published in Healthcare Governance: A Guide for Effective Boards by Errol L. Biggs, Ph.D. 2011. Health Administration Press. Reprinted with permission.