There is an increasing acceptance that risk management, in all of its permutations, transcends the duties of management to become a prominent responsibility of the board. The general counsel is well advised to brief the board on the elements of this responsibility.
Several new best practices compilations are available to help clarify for the board its responsibilities with respect to the oversight of a health system's risks. These include those published by The Business Roundtable, the National Association of Corporate Directors (NACD) and The Conference Board.
As most general counsel are aware, the historical judicial threshold in most states for breach of the risk oversight obligation is very high. However, in a recent publication, a prominent governance authority warns of the potential for egregious fact patterns to drive unfavorable outcomes, particularly in jurisdictions outside of Delaware.
For this and other reasons, the general counsel may want to encourage the board to revisit its approach to oversight of risk management; using state case law and these best practices compilations as benchmarks. The value of such an exercise exists regardless of whether the health system has an existing enterprise risk management program.