Question: How do hospitals and health systems handle the issue of board chair succession – that is, do they normally impose term limits for their board chairs and other officers or allow them to remain in office indefinitely?

Answer: Based on our experience, there is no standard mechanism used by hospitals or health systems to address this issue. A substantial minority provide for some automatic succession to the board chairmanship.  The most common mechanism is an informal process where officer terms are limited to two years and it is presumed (although not automatic) that the vice chair will become the chair at the conclusion of the chair’s current term.  On the other hand, some hospitals specifically do not provide for term limits for their officers, so that once a chair is selected, he or she will often remain in that position for several years until a decision is made to step down or the individual leaves the board.

There are some merits to not imposing term limits.  The board chair and the CEO can get more familiar with one another and there is less of a risk of losing continuity in leadership because of constant changes in the chair position. On the other hand, not providing for some change in the chair position can lead to a situation where “new blood” might be needed and it would be practically difficult to ask the chair to resign and move out of that position without creating some tension on the board. On balance, it probably makes sense to provide for automatic rotation through officer positions, but to allow officers, including the board chair, to serve two consecutive two-year terms, which would ensure a longer tenure although not an indefinite appointment.