Title: Board composition and financial performance in major hospitals

Authors: Yingliu Gu, James R. Langabeer II, Jeffrey R. Helton

Addresses: Division of Management and Policy Sciences, University of Texas at Houston, 1200 Herman Pressler, RAS W-310, Houston, 77030 Texas, USA. ' Division of Management and Policy Sciences, University of Texas at Houston, 1200 Herman Pressler, RAS W-310, Houston, 77030 Texas, USA. ' Division of Management and Policy Sciences, University of Texas at Houston, 1200 Herman Pressler, RAS W-310, Houston, 77030 Texas, USA

Abstract: Relative to for-profit corporations, there has been very little empirical research examining governing board structure in the predominantly non-profit hospital industry. In this study, we explore the financial impact of board size and diversity for the largest 100 non-profit hospitals in the USA. We use regression and analysis of variance methods to explore relationships between financial performance and board composition. Results suggest that hospital governance models are changing, shifting from a large, largely philanthropic model to a smaller |corporate| model. Results also show that higher performing hospitals tended to have smaller boards and greater percentage of physician directors.

Keywords: board composition; healthcare financial performance; non-profit organisations; hospitals; governing boards; board structure; board size; board diversity; USA; United States; hospital governance; physician directors.

DOI: 10.1504/IJCG.2010.035232

International Journal of Corporate Governance, 2010 Vol.2 No.1, pp.21 - 30

Published online: 16 Sep 2010 *

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