Directors and Trustees
Nursing homework help
Chapter 10
Directors and Trustees
Learning Objectives
Place of directors in organization hierarchy
Basic legal duties of governing board members
Compliance duties of board members
Role of board members in compliance program work
Legal penalties for inadequate compliance effort
Potential personal liability of board members
Criteria for assessing board effectiveness
Introduction
The highest authority in an incorporated organization is the governing board, composed of directors or trustees
The board members of an organization hire a CEO to carry out and manage its strategic and operational activities.
They count on the CEO carrying out these duties within the limits of the law.
Traditional Legal Duties of Governing Boards
Setting and following strategic direction
Management oversight
Financial oversight
Quality of care oversight
Board evaluation and growth
Public voice
Fiduciary Duties of Governing Boards
Duty of loyalty
Duty of obedience
Duty of care
Board oversight function explained in a series of court decisions involving Caremark International
http://www.kslaw.com/library/pdf/lookoutforlandmines.pdf – Look Out For Land Mines: The Duties of Directors Under Caremark
Legal Risks of Inadequate Compliance
Payers allowed to recoup improper payments
Criminal and civil monetary penalties assessed
Organization and individuals excluded from participation in Medicare and Medicaid
OIG requires that organization enter into a Corporate Integrity Agreement
In extreme cases, board members may be held personally liable
Criteria for Assessing Board Oversight of Compliance Efforts: Compliance program structure
Logical and likely to succeed
Compliance reports to board members
Clear-cut goals, including realistic limitations
Risks identified and addressed
Supported by sufficient authority and resources
Supported by top management
Compliance a factor in performance reviews
7
Criteria for Assessing Board Oversight of Compliance Efforts: Policies and Procedures
Internal controls to combat compliance risks
Guides employees in appropriate behavior
Code of Conduct promoted to all employees
Criteria for Assessing Board Oversight of Compliance Efforts: Preventing violations
Education & training on employee compliance
Stay up-to-date on new compliance risks
Regular compliance evaluations of risk areas
Criteria for Assessing Board Oversight of Compliance Efforts: Responding to violations
Quick-reaction process to evaluate & respond to suspected violations
Protect legal rights of whistleblowers and those accused of misconduct
Reporting compliance violations to the board
Policy for reporting certain violations to government authorities
