Senior Client Partner
This Week in Leadership (July 19 - July 25)
What the Delta variant means for office returns. Solving the labor shortage with returnships. Plus, tips for how to be a great board director.
A black man in his mid-60s with COVID-19 breathes uneasily with the help of a ventilator in the intensive care unit of a Georgia hospital. In Texas, a black woman in her late 30s is admitted to the oncology unit for breast cancer surgery. In Seattle, a black married father of two is rushed to the emergency room with severe chest pain.
There are two common threads running through each of these cases. One is obviously that the patients are all Black Americans. The other, not so obvious similarity is that, statistically speaking, it’s very likely that none of the hospitals in which they received treatment have a black director on its board.
By now COVID-19’s disproportionate impact on Black Americans is well known, with infection rates three times greater and fatality rates among those infected higher than their white counterparts. But here are a few other less well-known statistics. Black Americans account for around 30% of a hospital’s patient population. They are more likely to lack access to medical insurance than whites, and those that do have insurance are more likely to pay higher premiums.
But, as Nina Boone, a senior client partner for Korn Ferry’s diversity and inclusion and board practices who previously held executive roles at numerous healthcare companies, says, “Healthcare boards look nothing like their patient populations, which leads to a lack of understanding and slow to act behaviors when they are most needed.”
To be sure, data from the American Hospital Association’s 2019 Healthcare Governance Survey Report, found that 42% of community healthcare systems and freestanding hospital boards have no racially diverse directors. In total, only 17% of community healthcare systems and 9% of freestanding hospital board members are racially diverse. Moreover, according to corporate governance firm Institutional Shareholder Services, healthcare ranks third among industries with the most all-male boards.
The lack of diversity on healthcare boards is not a new issue. In fact, progress has barely been made in the last five years. Fifty-three percent of healthcare boards had at least one non-white member in 2013, for instance, versus 58% today, according to the AHA report. What’s new, says Walter Douglas, chief operating officer of Rutgers New Jersey Medical School and a director on several healthcare and community boards, is that the pandemic and protests over racial injustice has made the lack of diversity much starker, underscoring the need for healthcare leadership to better understand the communities they serve and to drive change.
“In an environment like COVID, where resources are scarce, the inequities in our healthcare system become exacerbated,” says Douglas. He cites as an example the pay markups for personal protective equipment and how better funded hospitals were able to marshal financial resources to get needed gear quicker than those with less resources.
Part of the problem is that healthcare boards are still mired in an old-school approach to selecting board directors that prioritizes social connections and fundraising, says Christine Rivers, PhD, a senior client partner in Korn Ferry’s Board and CEO Services practice who specializes in healthcare. Rivers says that approach threatens the healthcare industry’s ability to culturally transform to meet the needs of its patient population. “The dramatic changes in healthcare means organizations need to be similarly dramatic in changing the types of directors who need to be on the board and how they go about finding them,” says Rivers.
As primarily private institutions, however, there are no shareholders, pension funds, or laws holding hospitals and community healthcare systems accountable for diversity like there are with public companies. That means the onus is on boards to be more overt about recruiting and developing racially diverse directors both within and outside the industry and community. She suggests tapping into current directors and members of management from other industries, for instance, as well as aligning diversity needs with skills gaps. She cites, for example, the need among healthcare boards for directors who understand the needs of the workforce of the future, and those with digital or consumer marketing experience, as potential avenues to explore outside of healthcare that could widen the candidate pool for diverse directors. Boone adds that doctors and other healthcare leaders could do more to identify and develop high potential black talent within the organization through mentoring and sponsoring with a specific eye towards board membership.
Pointing to the statistics, Douglas concedes that change isn’t going to suddenly happen. He says healthcare boards have to encourage a very conscious and deliberate process of looking for directors that not only reflect but also care about the communities they serve. “Representing the community is important, but participating in it is key.”