A recent article from the Stanford Graduate School of Business, “Netflix Approach to Governance: Genuine Transparency with the Board,”provides a fascinating review of Netflix’s “unique and innovative” governance practices, which may offer interesting options for the health system board.
The article focuses on two notable boardroom practices: (1) fostering director attendance at management meetings; and (2) the manner in which the company provides information support to directors. According to the article, both practices are very popular with the board.
More specifically, Netflix provides for directors to periodically attend (in an observation capacity only) monthly and quarterly executive and senior executive management meetings. These attendance opportunities are education-focused. The expectation is that the opportunity to directly observe management will provide directors with a greater understanding of the range of issues facing the company, the decision making process of management, and the advantages and disadvantages of the options.
In addition, Netflix board communications are made through narrative-styled, quarterly online memos (averaging 30-pages) that incorporate links to supporting information, and provide access to all data and information on the company’s internal shared systems. In addition, the format includes the ability to pose clarifying questions to the subject authors. Notably, the memo is written by and distributed to a substantial portion of the leadership team, as well as the board.
As described in the article, the “Netflix approach to governance” applies highly innovative ways to support director responsibilities. Yet these practices may run counter to long-established approaches adopted by the board and senior leadership of many health systems (especially in with respect to access to management discussion and documentation). Indeed, the authors express due caution on the broad application of these practices. However, the report would be highly interesting reading for health system board governance committees, if only to spark renewed discussion on how best to support informed oversight and decision-making.