Extent of Hospital Director Involvement in Strategic Management: Does Tenure Make a Difference?

Of particular interest to researchers and practitioners is the impact of board members’ composition and characteristics on corporate activities. With the exception of studies focusing on the gender of board members and the inside director-outside director dichotomy, much of the research tends to treat directors as a homogeneous group. This study seeks to determine whether a relationship exists between hospital directors’ length of tenure and their degree of involvement in the strategic management process. The results of a survey of 240 directors from twenty-one hospitals are analyzed. A MANOVA, followed by a series of ANOVAs revealed significant differences between the longand short-tenure directors. In most areas those with relatively short board tenure tend to be less engaged than their longer-tenured counterparts. The latter are more involved in developing strategic alternatives, providing advice and counsel in discussions outside of board/committee meetings, and setting standards for and evaluating the performance of the hospital and management. However, both groups have very limited involvement in setting standards for rewarding top management and evaluating their performance. Short-tenure directors are more concerned with the interests of major stakeholders and promoting their goodwill and support. Also, they are more actively involved in financial matters. The results raise potentially important strategic dilemmas for hospitals and offer proponents of changes in board composition support for their normative suggestions. Longertenured members are not as concerned with financial matters as well as stakeholders’ interests and support as their short-tenured counterparts. Also, although longer-tenured members were more active in setting standards for rewarding top management and assessing their performance, it is important to note the limited involvement of both groups. The results show a reluctance by both groups to set performance standards for top management and to formally evaluate their performance.