5 considerations for hospital board compensation planning

Hospitals saw an increase in paid nonprofit hospital board members over the past five years, a trend experts say will continue, according to a Becker's Hospital Review article.

Health systems and hospitals must determine what's best for their individual organizations. Some thoughts to consider when deciding whether to compensate nonprofit board members are:

  1. Recruiting the top talent. "Boards that we're working with are becoming more diligent about the specific skill sets they're seeking on their boards, whether that be, for example, someone with a clinical background, an IT background or a particular expertise in finance," Jim Gauss, chairman of board services at executive search firm Witt/Kieffer, told Becker's. CEOs and current board members should find ways to attract and recruit these experts, including compensation.

  2. The size of the organization. Community hospitals and those with strong community ties might not need to offer compensation. Local businesspeople bring the desired level of expertise to the board and want to build that relationship, which could develop into a more vested relationship in the future. However, larger systems are more likely to pay board members based on the extreme commitment.

  3. How much compensation. Compensation generally stays at less than $5,000, according to B. E. Smith COO Tim Morgan. However, St. Charles Health System in Bend, Oregon board member Dennis Dempsey received $27,500 in 2012, doubling hours spent on board activities from five to 10 a week.

  4. Board/hospital relationship. Perception is everything, especially when it comes to compensation. The public may question board members' motives if they receive compensation, although that shouldn't dictate whether hospitals decide to pay board members, the article states.

  5. Expectations of board members. Hospitals and communities expect and demand more time and commitment from board members than ever before, and compensation can be a useful tool. 

To learn more:
- here's the article
- check out Dempsey's Form 990