Board Responsibilities
Strategy: The Board's Role in Setting Direction
What
The board is responsible for affirming and upholding the organization’s mission, establishing its core values, and setting its long-term vision and strategic direction. This includes making major strategic decisions – i.e. new markets, service lines, partnerships, and capital investments – while entrusting day-to-day operations and implementation to management.
Why
Board-led strategy matters because it keeps the organization’s long-term direction anchored in its stated purpose and core values. In public governance, board members are entrusted to serve that mission and the public interest, rather than personal or financial interests. By setting strategic direction and making major decisions about growth, partnerships, and investment, the board ensures that organizational choices advance the mission.
Important Considerations
- Strategy should serve the mission, reflect core values, and put the public interest above all else.
- The board should review progress regularly, understand the market, regulatory, and financial assumptions behind the plan, and revisit strategy when conditions change.
- The plan should include clear goals, timelines, and measures so the board can hold management accountable for results.
- A board strategy committee can give strategy development and oversight regular attention, while the full board remains responsible for making major strategic decisions.
In Practice Example
Management proposes a new outpatient service line projected to break even in three years. Before approving it, the board asks what specifically would trigger a reassessment — a competitor entering the market, slower-than-projected volume — rather than simply approving the business case as presented.
Governance Questions
- What is our strategic plan?
- How are we progressing?
- What assumptions have changed?
- What are we solving for?
- What are the key influencers of strategic success? (i.e., workforce recruitment, network expansion, drivers of quality and safety, etc.)
- Who are our consumers? What do they need from us? Are we providing the best value to them?
- What separates the good from great?
- What changes are happening in the market and how do we lean into those changes?
- How do we define a strategic “win”?
- What will we NOT become?
Resources & Reads
- Strategy Committee Charter
- Major Capital Investment Decision Framework
- Strategic Oversight in a Complex Environment
Witalis LLC is a national healthcare governance consulting firm specializing in governance design, board effectiveness, strategic planning, and board retreat facilitation for hospitals, health systems, medical groups, and other healthcare provider organizations.