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...approximately 90,000. community provider, Regional Hospital has a deep-founded commitment to both the city in which it is located and the region it serves. The hospital is the product of a 1980s merger of two hospitals--a Catholic hospital founded in 1914 and a non-Catholic hospital founded in 1902.
PROBLEM SUMMARY
The merger of the two hospital boards of directors brought together two very different philosophies of governance: one that supported policy governance and one that valued hands-on leadership. The mix of philosophies not only caused disharmony among directors, it also created an unstable and unpredictable relationship between governance and management. Resolution of this internal conflict of philosophy and perspective was essential to achieving effective governance and organizational performance.
PROBLEM DESCRIPTION
The merger of two organizations is fraught with challenges. The managers of the post-merger organization must lead the process of integration and ensure the provision of uninterrupted service, and the board of directors must achieve effective integration and alignment so that they can provide the governance needed for organizational performance.
The merger of the two hospitals resulted in the creation of a new not-for-profit corporation that, not surprisingly, immediately became the largest employer within the community. As the largest employer, the hospital had tremendous visibility and influence within and around the community. The high-profile nature of the hospital merger also generated significant local media interest with frequent newspaper and television coverage.
The literature on organizational mergers has documented that a post-merger board of director's effectiveness can best be achieved through a process of careful and equitable integration of individual directors from the pre-merger organizations (Arthur Andersen 1999). A conscientious effort was made to facilitate integration through the creation of a new 13-member board of directors consisting of an equal number of directors from both organizations and the president of the newly combined medical staff. The organization was sensitive to the sponsorship and philosophies of both pre-merger hospitals and selected directors who had served as the voices of those philosophies. Among the most articulate was a nun from the Catholic hospital's sponsoring order.
As the new board of directors formed and began to coalesce, a high-profile, well-respected member of the community was elected to serve as chair. This person had served as an active member of one of the hospital boards for a number of years and had a strong, if not contemporary, understanding of governance. During the new organization's first three years, the board of directors focused on many important challenges, including providing the leadership needed to consolidate all hospital...
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