Thought leadership

Responding to Five Tough Board Risks

Responding to Five Tough Board Risks

How prepared is your Board to thrive in a year characterized by difficult risks related to five (5) tough challenges:

  • Confusing policies
  • Cost escalations
  • Compensation transparency
  • Community assertiveness
  • Competency gaps

Ignoring these challenges can open Boards to financial, legal, and reputational risks that derail your organizational performance.

Move quickly to examine this “success matrix” to define how your leadership can best enhance your plans and investments into the intersection of work by board, medical staff, and executive leaders.


Board 2018 Imperatives



Risk Mitigation Strategies

Confusing Policies:

  • Weak & uncertain Medicare & Medicaid pay
  • Unclear tax exemption
  • Complex payer priorities
  • Delayed conscensus on strategies to grow service volume and payer contracts
  • Eroding revenues for operation and innovation
  • Eroding morale leads to shortage of talent
  • Expand joint board education and physician programming
  • Enhance board engagement with federal, state and local officials
  • Convene civic leadership forum on policy issues

Cost Escalations:

  • Labor rates with physician & nurse shortages
  • Demand for new technology
  • Enhanced consumer experiences
  • Weak or loss of payer contracts
  • Unable to fund capital needs
  • Eroding margin and agility for quality enhancement
  • Continue process improvement teams
  • Consolidate and outsource
  • Expand pricing transparency

Compensation Transparency:

  • Increasing gap between staff and executives pay
  • Expanding physician clinical and admin time
  • Hesitancy to disclose full costs
  • Media attacks erode public support
  • Labor-management tensions
  • Increased regulatory oversight


  • Reconnect comp philosophy with strategy, mission and plans
  • Expect comparative studies by media
  • Revisit and publish your comp philosophy and design

Community Assertiveness:

  • Public interest in health gains
  • Interventions into social determinents of health
  • Local government budget gaps
  • Reductions in tax-exemption
  • Push to fund and manage community health partnerships
  • Loss of philanthropic support
  • Next gen CHNA and stakeholder engagement
  • Collaborative governance
  • Reinvent philanthropy plans

Competency Gaps:

  • Industry complexity
  • Diversity and disparities among decision makers
  • Larger health systems scope and complexity
  • Poor oversight of strategic and financial planning
  • Disruptive board and committee decision-making
  • Increased regulator interventions
  • Governance academies
  • Governance retreats and design studios
  • Governance information, management portals like Board Effect



Study this matrix and discuss how it applies to your situation; and what actions you should take for enhanced vitality. Call us to explore how we can help address these risks. For additional resources, please see the Yates Memo here, and 13 Risks for Board Members, here.

James A. Rice

Jim Rice, PhD, FACHE is the Managing Director & Practice Leader with the Governance & Leadership service line of Gallagher’s Human Resources & Compensation Consulting practice. He focuses his consulting work on strategic governance structures and systems for high performing, tax-exempt nonprofit, credit union and health sector organizations and integrated care systems; visioning for large and small not-for-profit organizations; and leadership development for Boards and C-Suite Senior Leaders. 

Dr. Rice holds masters and doctoral degrees in ...

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