Governance conflicts in FBO Health Systems

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Governance conflicts in FBO Health Systems

• Dr. Samuel Mwenda
• CHAK

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Presentation

• Principles of good corporate Governance
• Challenges to good Governance
• Good Governance / win-win situation

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Good Governance

• THE BOARD
• Fully understands Mission and purpose of
  hospital/organization and nature of operations.
• Recruits, supports and evaluates the CEO and
  other Senior management staff.
• Practices objective program and financial
  oversight
• Approves Plans provides adequate resources for
• Strategic plan
• Annual Operational Plans
• Development/Business plan

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Good Governance

• THE BOARD.
• Discussions supported by well informed board
  papers and decisions well documented
• Ensures Board by-laws and Hospital Manuals of
  Policies and Procedures are in place and up to
  date.
• Division of work according to capacity
• Committees
• Task force (ad hoc committees)
• High level of ethics and transparency
• Supports and respects the Institutions
  Organizational structure
• Supports a culture of learning and encourages
  staff development

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Good Governance

• THE BOARD
• Receives and approves quarterly and annual
  reports.
• Proactively addresses operation plan deviations
  and challenges
• Proactively monitors environmental changes with
  potential impact on the operations and takes
  strategic action
• Capacity development commits time for capacity
  development and performance review

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Good Governance

• THE BOARD.
• Board Members volunteer their time and efforts to
  the institution.
• Balanced representation
• Professionals
• Non professionals
• Fundraising
• Develops and implements a vision for
  Institutional sustainability
• Organizational Planning
• Development Planning
• Sound financial systems
• Succession and sustainability planning

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Some sources of Governance conflicts

• Affecting key stakeholders

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Common causes of conflict

• Staff recruitment
• Procurement of goods and services
• Financial management and allocation/utilization
  of resources
• Rapid growth and expansion
• Decision making who makes decisions the owner,
  the agent (Board) or the management?
• Failure to strike a good balance between
  political process and professional governance
  accountability responsibility
• Inadequate communication

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Church Board relationship

• Conflict on decision making or resource use
  through failure to respect/observe formal line of
  communication. Church instructs hospital directly
  with no reference to Board or policy
• The By-Law should clearly stipulate the role of
  the Board and relationship with owning Church.
  CHAK recommends that Church engagement with the
  hospital should be through the Board to avoid
  multiple lines of instruction
• CHAK may be called upon to evaluate causes of
  conflict and facilitate dialogue for resolution

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Board - management conflict

• Lack of effective communication
• Board taking over executive powers
• Lack of mutual trust
• Inadequate disclosure of information
• Management disregard for the role of the Board
• Poor Board composition in terms of skill mix,
  competence and stakeholder representation
• To effectively address this we need clear
  By-laws/ constitution that define composition,
  responsibility, limits and reporting

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Conflict of interest

• Conflict of interest in wishing to do business
  with the hospital or wanting to draw direct
  benefit from the institution eg employment of
  relative
• Collective role of the Board vs representation of
  constituency interest
• There should be a conflict of interest policy
  that addresses Board members or staff that seek
  to do business with the institution. Either
  prohibit or provide for disclosure and non
  involvement in the discussion decision on the
  issue

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Challenge to good Governancecase 1

• Powerful chairman
• Who is in charge?
• Effects
• Ad hoc decisions
• Undermines CEO authority
• Controls the Board decisions
• Fear is established as part of the Institution
  culture
• Power brokers emerge
• Institutional operations are disrupted resulting
  in low staff morale, dysfunctional
  organizational structure, and threat to financial
  sustainability
• The roles, responsibility, authority of
  non-executive chairman should be clearly stated
  in the Constitution/By-Law

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Challenge to good Governancecase 2

• The case of a divided Board
• Who is in charge of decision making?
• Board is divided with two or more centres of
  power
• effects
• Risk of polarization- conflict increase-
• Decision making process gets disrupted
• CEO is forced to slow down or even to step down
• Uncertainty, Poor staff morale, low productivity,
  stagnation, threat to financial sustainability

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Challenges to good Governancecase 3

• Powerful CEO and poor Board involvement and
  oversight.
• Who is in charge ?
• One person holds full control
• Power based on professional financial strength
• Effects
• Rubber stamp Board
• One man operation
• Conflicts with community and host Church
• Non-sustainable support by stakeholders

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Challenges to good governancecase 4

• Excessive control and poor policies
• Cause obsession with process and control .
• Control as power instrument.
• Board has no time or energy to dedicate to
  strategy and resource mobilization
• Effects
• Interference with hospital operations.
• Delays in decision-making
• Senior leadership frustration
• Impact on quality of care

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Conflict can be positive

• Conflict is not always negative
• In human relations, conflicts are inevitable
• Conflict can be positive where they trigger
  positive organizational change
• Conflict is negative where it becomes destructive
  or diverts energy, effort, resources or
  commitment
• Every institution should have a mechanism for
  conflict resolution

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Good Corporate Governancewin-win situation

• Functional, engaged and responsible Board /
  effective CEO
• Define Leadership roles CEO Chair person
• Board develops and approves polices and
  procedures
• CEO implements Board decisions and is fully in
  charge of hospital day to day operations
• Board supports and strengthens CEO authority
• CEO and Board commit to follow laid down by-laws
  and procedures
• CEO and Board develop a respectful and trust
  based relationship
• CEO develops plan of operation- -Board approves
  strategic plan, annual plan of operations and
  oversight plan implementation.
• CEO prepares timely and comprehensive reports
  with recommendations Board reviews and provide
  feedback to CEO
• CEO and Board commit to high standards of ethics,
  transparency and accountability.

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Thank you!

• Asante!