Does Governance Affect Organizational Performance? Governance Structure and Hospital Performance in Tennessee

It is critical for a hospital to perform efficiently, to provide quality health care, and to maintain a high reputation in the community that the hospital serves. Since hospital governing boards are charged with ensuring superior performance on the part of the hospital, it is important to understand the features of governing boards that contribute positively to hospital performance. This study investigates the relationship between hospital governance and hospital performance in Tennessee. It measures the performance of 125 community hospitals from 2008 to 2012 using data envelopment analysis (DEA). This study finds that hospitals that adopt a corporate governance model perform better than hospitals that embrace a philanthropic one.