East Meadow, N.Y.-based Nassau Health Care Corp. officials expect to pass a resolution March 8 barring East Meadow-based Nassau University Medical Center officials from traveling to the Cayman Islands twice a year and charging the hospital for expenses incurred on the trip, according to Newsday.
George Tsunis, chairman of the board of Nassau Health Care Corp., which operates NUMC, told the publication the proposal is part of a series of resolutions to cut costs at NUMC, prevent corruption and make the public more aware of executives’ actions.
Nassau Health Care Corp. created a limited liability company, called NHCC LTD, in the Cayman Islands for tax purposes to self-insure for malpractice and general liability claims, according to the report. Company officials must meet outside the U.S. at least once a year to maintain the Cayman Islands location. NUMC’s CEO, COO, and CFO were all named to NHCC LTD’s board, and previously traveled to the islands for two weeks out of the fiscal year to discuss the company’s financial and operational activities.
Under the proposal, two NUMC executives will meet once a year for one day at an offshore location, such as a Canadian airport, to discuss the company’s activities.
The series of resolutions also calls for a reduction in the use of outside legal firms to handle internal legal issues, and to enact anti-nepotism disclosure requirements for hospital trustees, among other initiatives.
Nassau Health Care Corp. officials did not disclose how much the organization would save as a result of the proposed changes, Newsday reports.
Mr. Tsunis said as a safety-net hospital, NUMC should adhere to federal expense guidelines and not use taxpayer money to fund executives’ trips.
“[The proposed resolutions are] essential for credibility. The taxpayers of Nassau County need to be assured that we are protecting their tax dollars and operating at the highest ethical levels,” Mr. Tsunis told Newsday.
Cliff Robertson, MD, is senior vice president of divisional operations at Englewood, Colo.-based CHI and CEO of CHI Health, the system’s Nebraska/Southwest Iowa Division.
As CEO of CHI Health, he oversees 14 hospitals, 136 clinical locations and over 12,500 employees. Prior to joining the system in 2014, Dr. Robertson simultaneously served as interim CEO of Houston-based St. Luke’s Health System and COO of CHI Franciscan Health in Tacoma, Wash.
Dr. Robertson took the time to answer three key leadership questions from Becker’s.
Editor’s note: Responses have been lightly edited for length and style.
Question: Is it important for CEOs to have a public presence?
Cliff Robertson: A public presence is critically important for a CEO; in fact it was one of the biggest changes I experienced when I transitioned from COO to CEO.
I believe a CEO has an obligation to dedicate time toward community engagement because that leads to a public presence for the organization. I actively participate in the local Chamber of Commerce, am willing to meet with media to discuss the issues of the day and specifically meet with business leaders. These gatherings are not only “meet and greets,” but they give me an opportunity to share information about our organization’s strategic direction and initiatives. I also make a point of communicating with community stakeholders directly through monthly updates and video blogs. All of these efforts can be valuable and are designed to create a more public presence for CHI Health.
Q: What is the biggest challenge you face right now as a CEO?
CR: The biggest challenge all CEOs face is explaining the “why” to front-line staff and clinicians. The considerable changes taking place in healthcare today and accompanying disruption create doubt about the future and anxiety for all of us in healthcare.
I focus on helping our team understand “what” is changing and then the “why” behind the decisions we make as an organization. I learned a while ago the best thing I can do as CEO is help our team understand where we are going and at the same time answer their question of, “What does this change mean for me?”
Q: What is the greatest misconception people have about being a CEO?
CR: I think some folks assume I make decisions all the time. I actually believe in the wisdom of groups. That includes having our front-line staff involved in deciding how best to resolve our organizational problems. I see my role as a facilitator of groups that have to “get their hands dirty” as they help us solve the many challenges we face.
The board of Broward Health rejected all four finalists for the chief executive officer’s job Wednesday and voted to give it to their current interim CEO, Beverly Capasso, who is under indictment.
Capasso, who earned $650,000 a year as interim CEO, faces criminal charges along with four other current or former Broward Health leaders over alleged violations of Florida’s open-meetings law in the firing of a previous interim CEO. But board members said she has done an excellent job restoring stability to the organization, with several strong hires in executive positions, and that none of the four finalists turned out to be the stellar candidate with whom they had hoped to fill the job.
At the meeting, none of them mentioned the indictments, focusing instead on Capasso’s efficiency in beefing up the system’s managerial ranks, its improved finances and the apparent end of the crises that had plagued it.
“I think she’s done an amazing job and has an amazing team,” said board member Steven Wellins.
The job of leading the five-hospital, taxpayer-supported system came open more than two years ago, when its last permanent CEO killed himself with a bullet to the chest. Since then, the system has been run by a series of interim leaders, as the board, which is appointed by Gov. Rick Scott, lurched from one hiring process to another, creating instability that affected everything from employee morale to the system’s bond rating.
The vote was 4 to 1 to give the job to Capasso, with board chairman Rocky Rodriguez dissenting from an action that he said would “corrupt the process” of hiring a new leader.
Nancy Gregoire, the newest board member, made the motion to offer Capasso the job, saying she would hold the position until the expiration of a federal oversight agreement, expected some time late in 2020. By then, she and other board members said, they hope Broward Health will have a strong enough national reputation to attract higher-quality CEO candidates.
Gregoire said in an interview that the indictment was a concern, but that the charges were only second-degree misdemeanors and that Capasso should be considered innocent until proven guilty.
“Certainly it bothers me,” she said. “However, I really believe that the four candidates we had to review were not the best thing for Broward Health right now. I’d hate to make a mistake and make matters worse.”
Several board members pointed to the mediocre scores the four finalists received from executives of Broward Health’s hospitals, who had met with the finalists. Their scores ranged from 1.7 to 2.9 on a 5-point scale.
Capasso, a registered nurse, rose through the ranks to become a hospital executive, eventually becoming chief executive of Jackson Memorial Hospital in Miami.
The job description distributed by Broward Health says the CEO position requires a master’s degrees. Capasso has one in health administration, but it’s from a defunct mail and online institution called Kennedy-Western University that federal investigators identified as a diploma mill, an institution that confers degrees for little or no academic work.
Former Broward Health board member Joseph Cobo denounced the decision to hire her. There’s talk that the whole process was a “sham,” he said, and that the plan was always to give Capasso the job.
“I have never, ever, in the 40 years I’ve been around this place, seen a staff more scared from the retaliation that has been occurring,” he said. “You need a change. Yes, there are some very good people in this organization. But a lot of people have been hurt.”
Capasso, a former Broward Health board member who lives in Parkland, was indicted along with Rodriguez, board member Christopher Ure, former board member Linda Robison and general counsel Lynn Barrett for allegedly violating the state’s open-meetings law in the secretive manner in which they handled the investigation and firing of previous interim CEO Pauline Grant. All have denied wrongdoing. The cases are pending.
The firing of Grant, one of the county’s highest-ranking black officials, gave a racial tinge to the debate over the CEO job, with many black leaders denouncing the move. But at the meeting Wednesday, five black clergymen, some of whom had criticized the board in the past, spoke in favor of giving the job to Capasso.
“From my understanding of talking with different individuals and having real heart-to-heart conversations, I think the current interim CEO and the team that she’s put together is taking the ship in the right direction,” said Pastor Allen B. Jackson, of Ark Church of Sunrise. “I think they are doing a great job bringing the ship through the storm and taking the ship where it needs to go.”
In explaining his opposition, board chairman Rodriguez said he didn’t believe in springing something at the 11th hour and that there had been an explicit and public understanding that Capasso would serve only on a temporary basis.
“We made a promise to this community that this was not going to happen,” Rodriguez said.
“But we’ve heard from the community,” Gregoire said.
“Well, they’re part of the community,” Rodriguez responded. “With all due respect, they’re a huge part of the community, but there’s other people in the community that are not here.”
Capasso was not present at the meeting, which was a special meeting called just to discuss the CEO issue. But she was in attendance at the subsequent regular meeting, where she said she would accept.
“I’m humbled and honored to accept the terms of the contract,” she told the board. “We have stabilized Broward Health. We will continue to stabilize Broward Health for our patients, our community and the 8,000 employees of Broward Health.”
As CEO incentive pay packages bring attention to transparency issues in executive compensation, a group of directors and chief risk officers from The Directors and Chief Risk Officers Group published a set of guiding principles for compensation committees around the governance of risk related to pay and performance.
The report aims to give a company’s board of directors and board-level compensation committees guidelines for the governance of risks linked to an organization’s compensation culture.
Here are 10 guidelines for compensation committees to best guide executive pay and performance, according to the report.
1. Compensation committees must fulfill both direct and indirect pay governance responsibilities to define the best compensation culture for the company. Under direct governance responsibilities, CEOs must establish and continually review company-wide compensation philosophy. To fulfill indirect pay governance responsibilities, a company’s executives must ensure adequate resources and processes are in place for the organization’s incentive plans.
2. Committees should emphasize incentive pay for corporate performance when designing and communicating the company’s compensation philosophy. Incentive pay for an individual’s performance must be carefully applied when it is appropriate to fulfilling the individual’s role.
3. A CEO’s total compensation should be driven by how they impact the long-term interests of the company, which includes how effectively the organization takes risk.
4. A company should minimize use of external benchmarking, or the comparison of its statistical data with other organizations in the same industry, for executive pay. Instead, companies should work to incorporate internally-focused pay evaluation for executive pay.
5. Incentive-based compensation should always be considered to be “at risk,” subject to deferral periods and influenced by the company’s long-term performance.
6. Compensation committees must continually use discretion in determining an executive’s final incentive pay package. In this way, committees must make rules for determining these pay packages subject to discretionary override when the compensation culture of the organization appears to be violated.
7. When considering performance reviews and compensation design for an organization’s CEO and individuals in the succession plan, the compensation committee must provide complete transparency to the entire board. This includes the board’s approval of full details of the CEO’s performance and any final awards given to the executive.
8. Compensation committees should obtain public certification that ensures their processes of governing pay risk and compensation philosophy are “fit for purpose,” which entails executing a statement that verifies a company has performed due diligence on its pay governance processes.
9. The members of a company’s compensation committee should have diverse backgrounds and experience, expertise in risk, finance, and management and should cross-populate the company’s risk and audit committees.
10. To ensure proper compensation risk governance, companies must incorporate collaboration, feedback and review among board committee’s and the firm’s social network to maintain a properly established compensation culture.