An assessment of the relationship between board composition and healthcare organization financial performance
Abstract
Previous empirical literature regarding the relationship between an organization's board of directors (or trustees) and its financial performance is ambiguous. In this study, I use secondary data reported to the Internal Revenue Service through form 990 tax filings from 2004 to 2006 to test three hypotheses. The sample was the largest 100 non-profit healthcare organizations in the United States. Various measures of board composition, such as board Size and number of medical doctors were used as independent variables in this study. Four measures of financial performance (i.e., Return on assets, operation margin, debt ratio and days of working capitals) are calculated from tax forms and used as dependent variables in the research. OLS regression and Pearson correlations were performed to test the association among these variables. Descriptive statistics was conducted in this study to analysis the changes of incoming rank and board size of those organizations. Results suggest a trend towards transformation of governance models from a “philanthropic” model to a more “corporate” model. Results also show that higher performing hospitals tended to have smaller boards and greater percentage of physician directors. Implications for the industry are provided, and a discussion of the overall distribution of these top 100 non-profit organizations' are also described in this study.
Subject Area
Management|Health care management
Recommended Citation
Gu, Yingliu, "An assessment of the relationship between board composition and healthcare organization financial performance" (2009). Texas Medical Center Dissertations (via ProQuest). AAI1467436.
https://digitalcommons.library.tmc.edu/dissertations/AAI1467436