Hospital, health system boards saw low turnover, slow diversity gains from 2018-22, AHA finds

The boards of America’s hospitals have become tighter and marginally more diverse in recent years, though overall turnover has been low as members begin to show their age, according to recently released industry data from the American Hospital Association (AHA).

The AHA’s 2022 National Health Care Governance Survey Report—a triennial poll that had more than 900 hospital and health system respondents—found the percentage of female board members had increased from 30% in 2018 to 36% in 2022.

Members representing a historically underrepresented group increased to 21%, and the percentage of boards with at least one non-Caucasian member rose from 58% in 2018 to 68% in 2022, according to the report.

On the other hand, the percentage of board members aged 71 or older rose from 12% to 18%, whereas the percentage of those 50 or younger dipped from 22% to 19%, AHA found. That said, the percentage of respondents that said they had an age limit in place for board members increased sixfold from 2% to 12% since the prior survey.

About 9 in 10 of the survey respondents said they were interested in identifying and engaging potential board members who represent diverse characteristics, including gender, race/ethnicity and age, with most saying doing so would require “little to moderate effort.”

However, the majority said their organizations had not undertaken any efforts to engage millennials in any plans related to governance. AHA also stressed that it would take another 20 years to reach equal male/female representation if the current increasing trend continued, and even longer in regard to racial and ethnic diversity.

“A board’s good intentions to diversify its membership don’t absolve it from the need to achieve greater diversity,” Karma Bass, managing principal at Via Healthcare Consulting, wrote in commentary included alongside the survey’s results. “While this year’s survey results show some changes, they are not enough.”

Bass wrote that attracting and retaining the next generation of diverse board members will require “sustained efforts and a willingness to try new approaches." These could include foregoing “unintentionally exclusionary practices” such as frequent and lengthy meetings during working hours or allowing a board seat to remain open if “the best candidate” hasn’t been found, she wrote.

Continuing to fall short on board member diversity will not only leave marginalized communities without representation but will soon become a mark of weakness to stakeholders ranging from community members to employees to government, she warned.

“If we cannot find a path to building more diverse boards—and soon—we should expect that it will be imposed on our hospitals and health systems by external stakeholder groups; with this will come much public castigation of the organizations that have failed to address such a glaringly discordant feature,” she wrote. “Having a board of directors that is not representative of the community will be an institutional failing.”

Beyond diversity, AHA’s survey found a slight decrease in the average board size from 14 members in 2018 to 13 members in 2022. More than three-quarters said they did not replace board members or continued to reappoint them when eligible, translating to low board turnover during the past three years, AHA found.

The percentage of hospital and health system boards compensating their members more than doubled to 27% since the prior survey. About two-thirds of respondents said they have term limits in place,

Just over two-thirds said they had engaged in board restructuring activities—such as seeking new board member skills or adding/subtracting board committees—during the past three years. Certain best practices such as the use of a board portal or focusing on knowledge, skills and behavioral competencies during member selection have increased, AHA found, though 3 in 5 said they do not have any continuing education requirements for their board members.

“Regular evaluation of the board’s performance is a core part of the accountability process,” Barbara Lorsbach, president of GHI governWell, wrote in a commentary included in the report. “Boards that pay close attention to their own performance will find that their governance processes will improve, their leadership skills will be enhanced and the quality of their governance decision-making and strategic focus will be sharpened.”

AHA’s survey was sent to the CEOs of 5,232 nonfederal community hospitals and health systems between November 2021 and March 2022. AHA said the responding 933 organizations were “generally representative” of the industry’s size and demographic distribution, though nonprofit-owned organizations were “somewhat” overrepresented while investor-owned organizations were underrepresented. See the full methodology and results here.