This poses a challenge for you, as the CEO, since it amounts to a significant change in your relationship with your board. This relationship is critical, and always entails a certain amount of risk. It tends to be defined in terms of the boundaries between governance and management, and any change in the level of the board’s engagement unsettles whatever balance has been established between the board and the CEO.

Collaborative Leadership: A New Model For Developing Truly Effective Relationships Between CEOs and Trustees is the first in a series of tools developed specifically for you, the hospital or health system CEO, to help you take the lead in dealing with this change in ways that will stabilize and strengthen relationships with your board.

The new model for the working relationship between CEOs and their boards is rooted in collaborative leadership, an approach that requires a number of changes in the ways CEOs interact with their boards. Consider the following scenario:

It seemed harder each year to get the Compensation Committee to finish its business. Sometimes the committee wouldn’t decide on the CEO’s salary increase until it was a year overdue. It often took two or three meetings to get incentive awards approved, and goals for the new incentive plan rarely got approved until the year was almost over.

Rich, the CEO, couldn’t figure out how to move things along more quickly. The organization’s performance was better than it had ever been. The board frequently complimented him on his successes, but the committee seemed to always get bogged down in endless debates.

Then Rich was fired—totally unexpectedly, with no warning. He had no idea that trustees were so frustrated with his style that they would consider firing him. His performance reviews, when they finally got done, had always been positive. The feedback he received from individual board members, too, had almost always been positive. How could communication have broken down so completely that the board couldn’t have let him know what they were dissatisfied with?

This story, or one like it, plays out in hospital and health system boardrooms far too often. And, it shouldn’t have happened. What went wrong, and what should have happened instead?

Rich should have been attuned to what the board was thinking. The board should have told Rich it was frustrated with his style. Rich should have encouraged the trustees to express any concerns they had. The board should have responded. If communication had been more open, this is what we would have learned: Board members didn’t feel they had enough opportunity to discuss important issues, because Rich tended to dominate the discussion and either dismiss their suggestions or argue against them. They didn’t feel he had any respect for their views or for their roles as a governing board. He often seemed condescending. When he answered their questions, he sometimes implied that they should do whatever he recommended, since they didn’t understand health care enough to make good decisions. Trustees didn’t feel Rich was using their time well or taking advantage of their experience running their own businesses, because he seemed to fill up every meeting with tedious management presentations. And, to add insult to injury, whenever the board expressed reservations about one of his pet plans, he’d hire a consultant to tell the board he was right!

Board members probably demonstrated signs of frustration, even if they didn’t want to openly discuss them. These are some of the signals any CEO should watch for:

• visible signs of impatience during board meetings;
• complaints about the length of meetings;
• repeated suggestions about what should be done differently, e.g., hire a COO;
• questions about retirement dates;
• reluctance to renew employment contracts, pay competitively, or approve incentive awards.

Sometimes CEOs get fired because the institution’s performance is “bad,” and the board doesn’t believe the CEO can fix the problems. That’s understandable.

Too often, CEOs get fired unexpectedly, or get asked to retire early, when performance isn’t “bad.” And that’s regrettable. But, it’s usually a result of “style,” and often due to a strained working relationship between the board and the CEO. Yes, the board should have said something, and maybe the relationship could have been improved before it was too late. But as often as not, breakdowns in communication are partly due to the CEO’s own signals discouraging any critical feedback.

When communication breaks down, it’s often partly due to reliance on a widely used model for managing the relationship between the CEO and the board—a model that no longer works in the post-Enron world. CEOs used to view trustees as amateurs, lacking experience and expertise in understanding or managing anything as large and complex as a hospital or health system.

Even if some trustees are executives in their own right, healthcare is different enough that a hospital CEO has a difficult time seeing the relevance of lessons from other fields. So, CEOs haven’t always respected trustees enough to value their advice. Instead of engaging trustees in debates over strategies and priorities, CEOs framed issues as recommendations with no alternatives, requiring only an up or down vote. As a result, board meetings often turned into just getting business done and maintaining those boundaries between management and governance.