Gary W. Herschman, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Newark office, co-authored an article in The Governance Institute’s E-Briefings, titled “Board Best Practices for Assessing Strategic Options.”
Following is an excerpt (see below to download the full version in PDF format):
For healthcare organizations with depleted balance sheets, deteriorating operating performance, and compromised market position, today’s industry environment is unforgiving. At the same time, the strategic and operating challenges facing hospital leaders have grown in complexity and acuity. Missing cues or deferring a critical conversation regarding strategic and operating risks, or the relevance and effectiveness of the organization’s strategic plan and performance to plan, can prove costly.
These issues lie at the intersection of governance and management. To avoid strategic drift and adverse outcomes, the board must approve the development of a strategic plan, ensure its implementation, monitor its continued effectiveness, and in so doing, identify, analyze, and respond to enterprise and operational risks. Yet, all too often hospital and health system boards fail to re-evaluate their long-term strategy regularly, monitor their performance to plan, or assess how the organization’s risk profile has evolved. If the board is not performing these key roles annually, it is easy to miss critical cues regarding mounting strategic risks and growing variances to plan in the quickly evolving and highly competitive healthcare marketplace.