Healthcare organization consolidation and community engagement are buzzing today in our industry. Would having an advisory board aid your health system, hospital, physician group or association?
In too many cases, executives establish these boards without careful consideration, disappointing the organization and board participants. To be effective and offer the most value when creating an advisory board, use considerable rigor and discipline.
Ask these key questions:
- Why have an advisory board?
- What do we want the advisory board to accomplish?
- What is the advisory board’s authority?
- Do we have the commitment of management to help this advisory board succeed?
Why have an advisory board?
Advisory boards lack the authority to vote on corporate issues and hold legal fiduciary duties. Its primary purpose is to provide non-binding, strategic counsel. Depending on your organization’s needs, you could create an advisory board to:
- Act as a sounding board
- Facilitate market connections
- Be a source of focused input
- Offer a voice for community engagement
- Act as a resource for new product/service ideas
- Serve as a training ground for future fiduciary board members
A charter’s defining power
Whatever the reason for an advisory board, there must be a clear charter that defines its role and focus, as well as that of the person(s) receiving advice. Seek legal counsel to help draft this document, as all advisers are asked to sign it. At a minimum, the charter also details the boundary between the advisory board and fiduciary board, as well as competencies needed within its advisory board membership.
For example, the advisory board chair not only serves as the liaison between the advisory committee and the board of directors, he/she also runs advisory board meetings and appoints advisory subcommittees. The advisory board chair may also sit on the board of directors.
Advisory board member composition and size
What type of people do you need on an advisory board? We recommend finding team members who mirror the same good, behavioral characteristics of your fiduciary board members. They include:
- Experience
- Achievement
- Occupation and skills
- Impeccable integrity
- Team play ability
- Interest and commitment to the organization and healthcare
- Personal qualities
- Objectivity
- Willingness to state an opinion
- Staying power
- Receptivity to training and evaluation
- Willingness to devote necessary time
Caution! Resist the temptation to staff an advisory board with individuals from the same profession, e.g., physicians. A medically related advisory board may benefit by having several members who aren’t physicians. In this fashion, you may reduce group think and bias and gain a diversity of opinions.
In general, keep the advisory board within 5 to 9 members. The evidence is compelling that an advisory group of this size is most productive.
Communication – Give and take
Among the reasons advisory boards fail, first and foremost, is inadequate give-and-take communication. There must be a communications plan that enables members to effectively receive and give meaningful feedback. It’s important for advisory board members to know if their advice resulted in action. If advisory boards don’t see their contributions or are being ignored, their enthusiasm and efforts fizzle.
Meeting and agenda
Advisory boards tend to meet less often than fiduciary boards. However, they’re expected to publish an agenda at least a week before their meeting. Time on the agenda generally is unstructured so members may ask questions or bring up topics of interest. Meetings have a definite start and end time.
“Show me the money.”
In general, it’s a good idea to pay advisory board members for their time. At Practical Governance Group, we believe that compensating advisory board members yields better attendance, better preparation and better participation. You don’t have to pay a lot, and it’s nice to offer members the opportunity to designate a charitable organization as the recipient of the compensation.
For example, we ask our advisory board members if they’d like a check payable to them, if they’d like a check payable to a specific charity, or if they would allow us to make a contribution to a charity in their name. Keep in mind advisory board members only are compensated if they attend a meeting or participate in a conference call.
By following these tips, you are well on your way to creating and keeping an effective and valuable advisory board.
Charles R. Evans, FACHE, is an Associate of Practical Governance Group, President of the International Health Services Group and Senior Adviser at Jackson Healthcare. He offers more than 35 years of experience in governance and leadership. Positions include board chair, board member, health system region president and hospital CEO.