Nursing Presence on Boards: A Call to Consider Legal Duty. Kimberly Cleveland, ESQ, MSN, RN, C-MBC Yvonne Smith PhD, APRN-CNS

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1 Nursing Presence on Boards: A Call to Consider Legal Duty Kimberly Cleveland, ESQ, MSN, RN, C-MBC Yvonne Smith PhD, APRN-CNS

2 Objectives Identify key functions and legal duties of nurse board members that strengthen role performance and decrease liability. Describe how nursing presence on boards is impacted by execution of their legal duties. Identify appropriate orientation considerations for nurses serving on boards. Consider ethical issues that may pose legal risks to nurses as board members such as conflict of interest and self-dealing. Consider professional and personal limitations that may impede executing the duty of obedience.

3 Why this discussion? 2010 IOM Report: The Future of Nursing, Leading Change Advancing Health Robert Wood Johnson Foundation Future of Nursing Campaign for Action 2015 Nurses on Boards Coalition 2015 Nurse Ethics Statements Interpretive Guidelines Positions of Professional Organizations

4 Current Paradigm Nurse leaders are uniquely situated to influence changes in health care delivery (IOM, 2010) AONE Nurse Executive Competencies support the nurse-board member (AONE, 2015)

5 Board Membership Member of the governing board...who volunteer time to the organization...and acceptance of the assets in trust for the community (White & Griffith, 2010).

6 Recognized Disciplinary Significance Unique disciplinary perspective which shapes their contributions to influence health care Experts in quality safety and patient centered care Ability to advocate for patients Ability to use innovation to solve problems Ability to work as a team to accomplish goals (Hassmiller, 2011; IOM, 2010; Patton, Zalon, & Ludwick, 2015; Prybil, 2009; Totten, 2010).

7 The Role of Nurses on Boards To understand and oversee continuous performance improvement To understand transformation challenges and how these impact the organization To mitigate risk while providing advancement To understand what patient/family focus is To understand care systems and community Lead current, complex fragmented multidisciplinary systems through changes in regulations, structure and financial support (Martin, 2017)

8 Oversight & Key Board Functions Formulate, Implement and Monitor Strategic Plan Establish and Protect the Mission & Vision Establish and Revise Policy Select, Evaluate and Develop Executive Staff Advocate on behalf of the organization Participate in Financial Management and Oversight Establish, Monitor and Assess Organizational Quality (Brown & Guo, 2010; Chait, Ryan & Taylor, 2005; Ingley & Van der Walt, 2001; Inglis et al., 1999; Nicholson & Kiel, 2003; Pesut, 2016: Pointer and Orlikoff, 1999; Soltz, 1997)

9 The Issues? Are nurses prepared to execute board member duties? Do nurses duties to patients and the boards they serve produce a conflict interest? How can nurses be advised in regard to the execution of board memberships?

10 The issue is ripe for consideration: How do you respond to a sleeping board member? TAANA Listserve Query, 2017

11 The challenge for nurses to serve and advocate is on! The nurse promotes, advocates for, and protects the rights, health, and safety of the patient (Provision 3, ANA, 2015). The nurse has authority, accountability, and responsibility for Nursing practice; makes decisions; and takes action consistent with the obligation to promote health and to provide optimal care (Provision 3, ANA, 2015).

12 Professional Organizations Sigma Theta Tau International President Cathy Catrambone Call to Action: Advocacy (2015)

13 Legal Duties Duty of Care Duty of Loyalty Duty of Obedience Fiduciary Duty (Board Source; Davidson & Murdock, 2013)

14 Duty of Care Each board member has a legal responsibility to participate actively in making decisions on behalf of the organization and to exercise his or her best judgment while doing so. ard-service/roles-responsibilities/

15 Yardstick of action centers around prudence...reasonableness...trust (White & Griffith, 2010). Consider Smile Head Start Program having lost its federal funding in July, Consider and revisit the Business Judgment Rule

16 Duty of Loyalty Three components: 1) Cannot use corporate opportunities for personal gain, 2) Must avoid engaging in interested transactions without board approval, and 3) Must maintain the organization s confidential information Requires the decision maker to act for the benefit of the organization Requires : Extreme measure of candor, unselfishness, and good faith. See International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d (Tex. 1963)

17 Considerations Disclose conflict Know a board s conflict of interest policy and specific definition Disclose conflicts early and make these known This includes public policy issues Disclose when a multiple director Assure that the duties of organizations do not conflict

18 Duty of Obedience Board members bear the legal responsibility of ensuring that the organization complies with the applicable federal, state, and local laws and adheres to its mission.

19 Fiduciary Duty An obligation to act in the best interest of another party. (Black s Law Dictionary 2nd ed.)

20 Duties are defined in the scope of the board Considerations: Type of board ( for profit, not for profit, corporation) Federal and state reporting laws Composition of the board Formal orientation to the board

21 The Right Tools

22 Impact of agency law As a general rule, a director should acquire at least a rudimentary understanding of the business of the corporation. Accordingly, a director should become familiar with the fundamentals of the business in which the corporation is engaged If one feels that he has not had sufficient business experience to qualify him to perform the duties of a director, he should either acquire the knowledge by inquiry, or refuse to act. Francis v. United Jersey Bank 87 N.J. 15, 432 A.2d 814, (1981)

23 Knowledge Bylaws of Board Procedural Rules Conflict of Interest Corporate Governance Sarbanes-Oxley Compliance Executive Accountability/Evaluation Financial Evaluation Strategic Planning

24 Resources for Education AHA: Center for Healthcare Governance Best on Boards Essentials for Healthcare Governance Harvard Business School Board Source Kellogg School of Management Sigma Theta Tau International The Governance Institute

25 Paving the road to successful role delineation Board membership is not just something to add to your CV. It s governance-and both the work and board members must be held to the highest standards. -S. B. Hassmiller, PhD, RN, FAAN

26 Contact Information Kimberly A Cleveland JD MSN RN C-MBC Kent State University College of Nursing, Kent, OH kthoma43@kent.edu Yvonne M. Smith PhD APRN-CNS Kent State University College of Nursing, Kent, OH ysmith@kent.edu

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