Health care provision depends on efficiently combining financial resources, human resources, and supplies, and delivering services in a timely fashion, distributed spatially in an organisation. According to Lewis (2006), this requires a “system that mobilises and distributes resources, processes information and acts upon it, and motivates providers’ appropriate behaviour by individuals, health care workers, and administrators.” This system is created and led by board members and good governance is a critical factor in making such a system function.
Governance is fundamental to organisation success. Good boards become bad boards and bad boards become good boards because of their understanding of governance. Arwine (2002) notes that effective governance has the following characteristics: it is efficient, allows a respectful conflict of ideas, is simple, is focused, is integrated and synergistic, has good outcomes, preserves community assets, and leads to enjoyment and personal reward for the individual board members.
Board members are crucial to organisational development and they need to understand good governance. A comprehensive approach to clinical governance necessarily includes the active participation of boards and executives in sponsoring and promoting clinical governance as a quality and safety strategy. Boards have three primary roles: to establish policies, to make significant and strategic decisions, and to oversee the organisation’s activity.
In his study, Arwine explains that effective execution of policy is necessary to fulfil the other two roles. Policies define focus and differentiate responsibilities among the board, the management, and the medical staff. Well-written policies lead to more efficient board functioning. Instead of having the same matter or very similar matters on the agenda repeatedly, the board can develop a policy that covers the issue and leave implementation of the policy to management. Boards have approximately 24 hours together each year, spread over regular meetings. It is essential to use that time wisely.
Decision making involves making choices about the organisation’s vision, mission, and strategies. Boards make decisions about issues that are strategic and significant, such as whether to enter an affiliation agreement with another organisation. As decision makers, boards can also delegate non-governance types of decisions to others—and would be wise to do so.
Oversight is an important function, but boards must remember that the organisation is theirs to oversee, not to manage. Some boards cross the line and try to involve themselves in management. Nevertheless, in the oversight role, the board is legally responsible for everything that happens within the hospital, whether in the emergency department, a clinic, or a pharmacy unit. In the area of quality, for example, the board’s oversight role may include setting the tone by stating that the organization is committed to quality; establishing policies related to quality, such as credentialing; ensuring that mechanisms are in place, such as committees, to establish a plan for quality; and monitoring implementation of the plan.
Responsibilities of boards
Boards have numerous responsibilities: they oversee management, finances, and quality; set strategic direction; build community relationships; establish ethical standards, values, and compliance; and select a CEO and monitor his or her progress.
Although the management team develops the strategic plan, it is the board’s responsibility to accept or modify the strategic plan and to set the direction. The board considers elements in the environment—such as growing competition and changing patterns of care—and develops a vision, a mission, strategic thrusts, goals, and tactics that respond to the environment, all the while showing the organisation’s values.
Financial oversight is a familiar job that boards usually do well. Boards ensure the use of financial controls; ensure that funds are prudently invested, considering cash management, banking, and contracting parameters; and establish policies related to budgets. Their goal is to protect the community’s assets. Oversight of the quality area often involves utilisation and risk management in addition to continuous quality improvement.
Attention to community relationships is a responsibility unique to not-for-profit institutions. Inasmuch as board members have contact with the community, they can be sensitive to the expectations and needs of its citizens and bring that knowledge to the board room. The focus is on all those the organisation serves: consumers, businesses, elected representatives, payers, and collaborators. Boards are paying more attention to the quality of life in their communities.
When reviewing these responsibilities, it is important to note that the board as a whole, and not any individual member, has the authority. Further, the board exists only when it is in session. The committee is an appendage of the board, and the board can delegate certain tasks to a committee or an individual, but otherwise an individual board member has no prerogative. Thus, it would be inappropriate for a board member to walk in to a manager’s office and ask to review the books or demand certain changes. Such actions, in fact, can cause much disruption. The CEO is the full-time agent of the board and is the only person directly accountable to the board.
However,contrary to what many believe, members of a non-profit board are not paid,yet they have enormous responsibilities. Hermann notes that,from time to time, however, individual members of a non-profit board may shirk from their responsibilities; or worse, board members may behave in a manner that is unbecoming or destructive. Many non-profit leaders are surprised, if not stunned, to witness the damage that a “bad actor” on a board can cause. And when a non-profit board includes more than one member behaving badly, the situation can quickly move from unhealthy to dire.
Elements of good governance in boards
In order to grapple with the cold feet attitude associated with non-profit boards, Arwine identifies three major components of governance among board members-behaviour, structure, and expectations.
Appropriate board behaviour can be defined as functioning in accord with the board’s roles and responsibilities. Thus, board members should know the difference between governance and management, see service as a responsibility of citizenship, and find enjoyment in such service. Appropriate behaviour also has key characteristics, the first of which is respect—for the organisation, the management, the clinicians, the employees, and other members of the board.
Respect is basic, but it doesn’t always exist. There are boards whose members were antagonistic towards large segments of the medical staff, for example. Such behaviour is distracting and counterproductive. Respect leads to additional behavioural characteristics that are needed: openness in the board discussions and confidentiality.
Conflicts of interest also fall in the category of behaviour. Some people believe that a potential conflict of interest precludes service on the board. Based on such a view, some hospital boards do not include physicians, claiming that they could have a conflict. All boards need to have a policy about conflict of interest. Usually this policy requires all members to disclose potential conflicts and to abstain from voting on such matters.
Boards may not pay much attention to structure, thinking that it is covered in the bylaws and requires no further comment. Nevertheless, problems often arise from structure rather than behaviour. In some cases, there are several boards in which the chairman had served for 30years, and members were discontented and ready for someone new. Many board bylaws do not address tenure. Whether the term limit is 2 or 3 years or something different, it is helpful if everyone knows what to expect.Other issues may concern the frequency of meetings or the size of the board.
Arwine (2006) explains thus: “I believe strongly in agenda-creation and management. Since the board’s deliberations are determined by the agenda, that one document relates closely to the board’s effectiveness”. He adds that the agenda can be organised into three categories: items for information, items for action, and items for strategic discussion.
This agenda-organisation helps members know what is expected of them and eliminates worry, for example, about having to vote on an item that is just for information. If executive committees and task forces are appropriately established and charged, the board can trust their efforts and avoid recreating what happened at a committee meeting. Committee suggestions and other smaller, non-controversial action items can be grouped into a “consent agenda,” requiring only one motion and one vote. Background information on items in the consent agenda can be provided in the board book sent out before the meeting. Use of a consent agenda saves time and allows the board to focus on the most significant issues.
The final component consists of expectations or, more specifically, board members’ knowledge of what is expected of them and what they can expect from others. One of the best ways to clarify expectations is to have new members sign a letter that outlines those expectations. Such a document also makes it easier to remove a board member if, for example, his or her attendance has been poor. It also serves to clarify the requirements of board membership when approaching a potential volunteer.
In return for their service, board members should expect respect, a proper orientation, proper flow of communications, advanced preparation for board discussions, judicious use of their time, educational opportunities, and the opportunity to contribute. In addition, boards should be able to expect “no surprises.” Boards will be comfortable with the CEO if they feel that he or she is being open with them. More than anything else, surprises damage the board’s comfort level; members worry that other important matters are not being communicated. Finally, the board member can expect to participate in a board that is well led, informed, experienced in proper board function, well sized, properly motivated, consistent, a unit, and respectful of management and professionals.
Evolution of governance
The scope of governance has widened in hospital boards.Braithwaite and Travgalia,In a study conducted in 2008,found out that there are links are between health services’ clinical and corporate governance. Clinical governance can be used to promote quality and safety through a focus on quality assurance and continuous improvement; the creation of clinical governance structures to improve safety and quality and manage risk and performance; the development of strategies to ensure the effective exchange of data, knowledge and expertise; and the sponsoring of a patient-centred approach to service delivery.
Today, the focus is on management oversight, financial management, and community response. The focus of the future is on strategic performance. Board members need to ensure that it has the right expertise around the table to deal with critical issues of the time.
Arwine, D.(2002) “Effective Governance:The roles and responsibilities of Board Members” Baylor University Medical Centre Proceeding. Vol. 15(1) Pp19-22
Braithwaite,J. and Travglia J. (2008) “An overview of Clinical Governance Policies, Practices and Initiatives” Aust Health Review 32(1) Pp 10-22
Herman,M.(2015) Enforcing Board Member Responsibilities
Lewis,M.(2006) “Governance and Coruption in Public health Care Systems.” Center for Global Development Vol.78
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