Editor's Note: The following report reflects the results of the first in a series of online surveys conducted by the Center for Healthcare Governance and the Health Research & Educational Trust. The survey on boards' use of executive sessions yielded 350 returned responses, reflecting 240 CEOs of freestanding hospitals, 79 CEOs who are members of system boards, and 31 system CEOs.

Executive sessions can be a very sensitive topic for trustees and CEOs. Considering that topics such as executive compensation and performance evaluation are thought to be commonly discussed and that CEOs are, in many cases, excluded from at least a part of the discussion, it is understandable that executive sessions have the potential to create tension between trustees and the CEO. In such a delicate situation, it is important to have objective benchmarks with which to compare individual organizational board practices with the practices of boards from other health care institutions and with prescriptions from the field. In this context, the AHA’s Health Research & Educational Trust and the Center for Healthcare Governance chose executive sessions as the first topic in their series of short online surveys that will help provide quick benchmarks of current practices and emerging trends in the field of health care governance. In total, 350 CEOs responded to this survey.

Overall, nearly 90 percent of boards have held at least one executive session in the last two years. Among those boards, most averaged between one and eight such sessions per year, with only 43 percent of CEOs indicating that such a session was routinely included in the agenda of every board meeting. Regarding the sensitivity of executive sessions, it is not surprising that the overwhelming majority of CEOs indicated that performance evaluation and executive compensation were two of the subjects usually addressed in executive sessions.

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Source: Hot Topics, January 2008 issue of Trustee Magazine

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By Lanny A. Kope

Holding executive sessions is a sensitive subject between boards and their CEOs. But despite this sensitivity, boards that exercise this governance privilege infrequently, or without appropriate planning, risk sending a signal that executive sessions should only be used to discuss problems or concerns about the hospital’s or CEO’s performance. But conscientious boards know that executive sessions allow them to talk more thoroughly about a wide range of issues that require candid board discussion.

The executive sessions survey summarized above defines an executive session as “any section of an otherwise public board meeting in which minutes are not taken, and the contents of the discussion are treated as confidential.”

While 87 percent of responding CEOs in the survey said their boards had conducted at least one executive session in the past two years, I was surprised that as many as 13 percent had not. I believe issues of CEO performance and compensation alone warrant board discussion in executive session, not to mention other key issues, such as various board processes and performance noted by survey respondents. Given the increasingly complex challenges facing hospitals, boards that never conduct executive sessions should step back and examine why they are failing to take advantage of this key board prerogative and whether they are functioning fully and effectively as a governing body.

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