Question: Should employed physicians be allowed to serve on our health system board?

Answer: From the standpoint of governing a health care system, it is very important to have practicing physicians serve on the Board.  In the case of a highly integrated health care system, those physicians would inevitably be selected from the ranks of system-employed physicians.  The fact that such a physician trustee would also be employed would not, in and of itself, create an impermissible conflict.  However, if a physician (or any other employee) had administrative responsibilities, the physician would be confronted with a conflict of interest if he or she also served as a trustee.  As an employee, the individual would directly or indirectly report to the CEO.  However, as a trustee, the individual would also have fiduciary oversight responsibility that would include overseeing the performance of the CEO.  In such a case, the individual would either have to declare a conflict with respect to any Board activity relating to the CEO or, for that matter, any action based on the recommendation of the CEO, since the individual’s employment relationship could be affected by the decision.  In the alternative, the individual would take part in those activities and create a situation that could possibly undermine the CEO’s authority over other administrative employees.  Neither alternative would be good for the employee, the CEO, or the organization.  Therefore, in the interest of avoiding such a conflict and assuring better governance practices, we would recommend that only employed physicians in active full-time clinical practice who do not have any substantial administrative or executive responsibilities be eligible to serve on a health system board.