The Board’s Fiduciary Role: Legal Responsibilities of Health Care Governing Boards

About the Authors:
Fredric J. Entin and Janice A. Anderson are partners in the Health Care Industry team and Katherine S. O’Brien is an associate and member of the Health Care and Energy Industry teams and the Business Reorganizations practice at the law firm of Foley & Lardner LLP. The firm has offices across the United States and more than 60 practice areas encompassing a full range of corporate legal services, including corporate governance, securities enforcement, litigation, mergers and acquisitions, intellectual property counseling and litigation, outsourcing and information technology, labor and employment, and tax.

Overview:
Serving on a hospital governing board has long been an honor and a privilege. However, intense scrutiny of governance in all sectors, prompted by the Sarbanes-Oxley legislation and the governance reform initiatives that followed, has left some board members questioning whether board service is an honor they can accept.

The Board’s Fiduciary Role: Legal Responsibilities of Health Care Governing Boards provides a clear, straightforward explanation of the basic legal duties and obligations of boards that govern nonprofit health care organizations. The publication discusses issues such as what it means to govern on behalf of stakeholders, the importance of understanding the corporate purpose, the difference between managing and governing and the basics of board accountability.

It explores in-depth the three primary legal duties of a nonprofit governing board—the Duty of Care, the Duty of Loyalty, and the Duty of Obedience—and provides practical guidance on how these duties can best be fulfilled.

The publication also considers how these duties apply to several key board responsibilities, such as:

• oversight of legal and regulatory compliance,
• upholding the national mandate to improve health care quality and patient safety,
• physician relationships and competition,
• safeguarding the organization’s charitable assets, and
• protecting the hospital’s credit rating.

Key questions are posed throughout to help board members better understand their obligations and determine how well their boards are discharging their responsibilities in several important areas.

This publication can be a useful resource for both current and prospective board members. It can be used as part of new trustee recruitment efforts and orientation programs as well as for board continuing education programs and leadership retreats. It also can serve as a reference for all board committee chairs and board officers as they plan for and guide board activities.

As authors Fredric J.Entin, Janice A. Anderson and Katherine S. O’Brien conclude, “It is now more important than ever for nonprofit board members to demonstrate that the public’s confidence in nonprofit governance is justified.” This publication is an important resource to help boards do just that.

For more information or to order, contact the Center at 888-540-6111 or email at info@americangovernance.com