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mark rogers

This board knows best

christopher bing for the boston globe

Allow me to congratulate the board of directors of Blue Cross Blue Shield of Massachusetts for its part in continuing to support the public’s mistrust of all things that emanate from the boardroom. Board members have voted to reinstate their own compensation. The move comes nearly two years after the state’s largest health insurer suspended board compensation in response to Attorney General Martha Coakley’s push for health care nonprofits to end pay for board members.

But don’t worry — Blue Cross’s board did not make this move on a whim. According to spokesperson Jay McQuaide, the board did this only after undertaking a two-year process to strengthen its “governance practices to make sure they are in line with best practices.” I feel better now. That completely erases the fact that these are many of the same people that voted in 2010 to reward the insurer’s outgoing CEO an $11 million golden parachute after the company posted a $149 million loss.

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Furthermore, board members have taken a huge pay cut compared to the level they were back in 2011. Their annual cash retainer is down from $40,000 to $30,000, and their stipend for attendance at each committee meeting has shrunk to a measly $1,000 (down from $1,200).

The whole thing conjures up visions of a boardroom that sits behind closed double mahogany doors, with a beautiful marble and glass conference room table, surrounded by leather chairs and a lavish catered affair that includes filet mignon, lobster, and sparkling water. Around the table sit the members of “the club” — the elite members of the business community who through their own independent accomplishments have distinguished themselves as the only ones capable of making important decisions for the companies they represent (and we should consider ourselves lucky to even have them).

Unfortunately, this is the general perception of today’s boardroom. The reality, of course, is much different, especially for nonprofit boards. The overwhelming majority of the nearly 1.6 million nonprofit organizations in America today are governed by boards composed of compassionate, intelligent, and selfless individuals who are dedicated to stewarding their organizations to level of excellence that befits their mission without monetary compensation for their efforts.

So what makes Blue Cross so different? It looks like arrogance. The board members of Blue Cross made a conscious decision to reinstate their compensation two years after the attorney general first raised the issue. They will no doubt embark on a public campaign over the days and weeks ahead to justify their compensation, likely arguing that because of the insurer’s size and annual revenue ($7 billion), it is unlike most nonprofits and that the related demands on the board justify that they be treated differently than the boards of other nonprofits.

Of course, the simple answer is that the time has come to force these nonprofit health insurers to convert to for-profit status — but don’t hold your breath on that one. The mere mention of that will send them into their talking points about how such a move will result in increased premiums and compromise the ability to offer “affordable” health insurance to its members.

No, the better course of action is to just be quiet. After all, the Blue Cross board knows best — and we are very lucky to have them.

Mark Rogers is CEO of BoardProspects.com, a startup online professional community for board members.
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