Becker's Hospital Review

31 31 CEO/STRATEGY Erlanger's board faces overhaul if state conflict of interest bill becomes law By Morgan Haefner C hattanooga, Tenn.-based Erlanger Health System may have to upend its board of trustees if a bill targeting ties between governing bodies and pub- lic hospitals is signed into Tennessee law, according to the Times Free Press. The bill aims to protect consumers who live near a county or publicly owned hospital. It would prevent hospital authority trustees and former trustees from signing an employment agreement with an authority until at least 12 months after the trustee's tenure of service on the board. The bill would not affect pri- vate or nonprofit hospitals. The Times Free Press reviewed a list of current and former trustees from Er- langer to see if anyone would be affected by the bill. A hospital spokesperson told the publication "it would be premature for Erlanger to speculate who this bill impacts at this point." After reviewing conflict of interest disclosures trustees have to complete, the Times Free Press found current physician board members could have to choose between ending any financial ties with Erlanger or staying on the 11-member board. Erangler's Board Chairman Mike Griffin told the publication having physicians on the board is "a tremendous asset." He added, "I am hopeful that the bill, in its final form, will not impact physician participation on Erlanger's board." n Broward Health CEO: Layoffs not part of strategy during system turnaround By Morgan Haefner T he CEO of Fort Lauderdale, Fla.-based Broward Health said the sys- tem will not pursue any layoffs during its turnaround, according to the Sun Sentinel. Broward Health CEO Gino Santorio officially took over the system in December 2018. During the past two years, the public safety-net hospital system has been plagued by improper staffing, high physician turnover, unpaid bills, legal issues and unsigned vendor contracts, among other problems. In 2016, Broward's then-CEO died from a self-inflicted gunshot wound. Under Mr. Santorio's leadership, several of Broward's personnel and financial problems have been addressed, bringing stability back to the organization, according to the Sun Sentinel. Mr. Santorio said by controlling legal fees, re- negotiating pharmaceutical and vendor contracts, and restructuring bonds, he created $31 million in savings. Broward also received a stable outlook from Standard & Poor's, up from negative. Still, Broward faces multiple challenges. Hospital admissions in Florida's Broward County are down 7.6 percent, and more surgeries are moving to outpatient set- tings. While other Florida hospitals have issued layoffs to fend off the pressure — Miami-based Jackson Health System laid off an undisclosed number of employ- ees in March — Mr. Santorio said such measures aren't on Broward's radar. "We've put a very tight focus around our expenses and flexibility," he told the Sun Sentinel. "We made sure we structured our labor with part time and full time to flex up and down without having to do a reduction in force." n Lack of turnover preventing women from assuming board positions By Anuja Vaidya W hile companies are increasing- ly backing the move to install more female directors on their boards, the actual number of women sitting on boards has hardly grown, according to e Wall Street Journal. e main reason for this? Not enough male board members are leaving their seats. e Journal cited a study by business re- searchers at Conference Board that assessed Russell 3000 companies. ese compa- nies represent a majority of U.S.-traded stocks. e study showed that on average board directors keep their seats for 10.4 years, and about one-fourth of them leave their seats aer 15 years. e study also found that one-fih of board directors are older than 70 years. Investors and legislators are pushing to change board makeup. Investors such as State Street Global Advisors and BlackRock have supported the greater inclusion of fe- male board members, noting studies that link better shareholder returns to having more female board members. In 2018, California became the first state to order companies to have at least one female board member by this year and two by 2021. But board turnover has been limited by the lack of term limits and other roadblocks. Some companies, for example, are wary of replacing incumbent board members, which could result in the loss of institution- al knowledge and disrupt board dynamics. "In the last two decades, there's been a sweeping revolution in the field of cor- porate governance," Matteo Tonello, managing director for corporate gover- nance research at Conference Board, told the Journal. "Yet if you look at the compo- sition of the board, at its core, it remains the same at many public companies and quite resistant to change." n

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