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An examination of Hospital Governance in Ghana

Article · February 2008

DOI: 10.1108/17511870810845905

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Patience Aseweh Abor Gordon Abekah-Nkrumah

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Hospital
An examination of hospital governance in
governance in Ghana Ghana
Patience Aseweh Abor and Gordon Abekah-Nkrumah
Department of Public Administration and Health Services Management, 47
University of Ghana Business School, Legon, Ghana, and
Joshua Abor
Department of Finance, University of Ghana Business School, Legon, Ghana

Abstract
Purpose – The purpose of this paper is to examine the nature of governance structures in Ghanaian
hospitals by comparing the governance systems in public and private hospitals.
Design/methodology/approach – This study employs a comparative case methodology. It
compares the governance structures in private hospitals to that of public hospitals in Ghana to
ascertain whether they exhibit different or similar governance systems. The results obtained are
analyzed and discussed to ascertain the extent to which the governance structures in these hospitals
conform to Taylor’s principles of good governance.
Findings – The results of the study revealed numerous differences in the governance structures in
private and public hospitals in Ghana. From the review of Taylor’s principles of good governance and
the comparative case analysis, it was observed that some of the principles are not present in the
current hospital governance systems.
Originality/value – The findings of this paper have important implications for proper governance
and management of the Ghanaian health institutions.
Keywords Governance, Hospitals, Ghana
Paper type Case study

1. Introduction
Corporate governance has been widely studied and has been identified as an important
determinant of organizational performance (Abor and Adjasi, 2007; Abor and Biekpe,
2007). However, little is known about hospital governance systems. There are concerns
regarding the form of governance system most appropriate for effective and efficient
operation of health care institutions. The issue is whether governance models that are
developed for corporate establishments are also applicable in the hospital setting, and
if they are to what extent can these models be applied in hospital governance. It is
important to study how hospitals ascribe to good governance models.
Hospital governance has been defined to include the responsibility and
accountability for the overall operation of an organization (Bohen, 1995). More
specifically, hospital governance has been conceived of as a shared process of top-level
organizational leadership, policy making and decision making. Although the
governing board has the ultimate accountability, the CEO, senior management and
clinical leaders are involved in top-level functions (Bader, 1993; Alexander et al., 2003).
Most hospitals have their own governing board and a professional team of executive Leadership in Health Services
Vol. 21 No. 1, 2008
pp. 47-60
q Emerald Group Publishing Limited
The authors thank the anonymous reviewers of this paper for their insightful comments and 1751-1879
suggestions on governance and leadership. DOI 10.1108/17511870810845905
LHS managers. Together they constitute the axis of ‘hospital governance’, which is the
21,1 process of steering the overall functioning and effective performance of a hospital, by
defining the hospital’s mission, setting its objectives, supporting and monitoring their
realization at the operational level (Flynn, 2002; Eeckloo et al., 2004). Efficient
governance of hospitals requires responsible and effective use of funds, professional
management and competent governing structures (Ditzel et al., 2006).
48 The expectations of quality care, efficiency, responsive service, ready access,
fairness, and provider morale are a reality in all hospitals, given that health service
activities contribute to the socio-economic development of the country. These
expectations provide significant challenges, not only for health service providers, but
also for hospital boards of directors who have an unprecedented need for sound
governance structures, policies and processes and well-understood accountabilities
(Quigley and Scott, 2004). Eeckloo et al. (2004) suggest that the several major
developments in health care and health care policy require that hospital boards and
managers are challenged to reflect on what good governance means and how they can
implement it in their organizations. Hospitals constitute an important component of the
health care delivery system in most countries. The extant literature explains three
types of health care systems. These are: a liberal health care system, a plural health
care system, and a socialistic health care system. A liberal health care system prefers
private ownership of health care organizations; in a plural health care system, both
private and public ownership are recognized; in a socialistic health care system, all the
health care organizations are owned publicly (Strı́tecký and Pirožek, 2002). Clearly,
private hospitals will exhibit a different governance system from that of public
hospitals.
Considering the relevance of the governance function in managing hospitals, we
investigate the issue in Ghana. Even though the health sector in Ghana is seen as one of
the most performing compared to its neighbours across the West African sub-region,
there still remain agitations within Ghana concerning the performance of the sector.
The donor community especially have raised concerns as what they see as dismal
performance in the wake of massive inflow of resources into the health sector
(Abekah-Nkrumah and Abor, 2007). In addition to this main macro level concern, at the
micro level, the performance of health facilities is seen as rather lopsided
(Abekah-Nkrumah, 2005). It is possible that the performance issue in the health
sector could partly be a governance challenge and therefore the need for this study.
Specifically, this paper examines the nature of governance structures in Ghanaian
hospitals by comparing the governance structures in public and private hospitals. The
results obtained are also analysed and discussed to ascertain the extent to which these
governance systems conform to theoretical models and best practice. The discussion is
done in line with Taylor’s (2000) principles of good governance. Taylor (2000) proposed
nine good governance principles that could be applied to health care management, and
these have been used in previous research studying hospital governance in New
Zealand and Czech (see Ditzel et al., 2006).
The rest of the paper proceeds as follows: section two explains the methodology
used in the study. Section three provides an overview of the health care system in
Ghana. Section four includes a discussion of the results and finally, section five
concludes the discussion and provides recommendations.
2. Overview of the health care system in Ghana Hospital
There are four main categories of health care delivery systems in Ghana – the public, governance in
private-for-profit, private-not-for-profit, and traditional systems (MOH, 1997). The
health system revolves around the Ministry of Health. Administratively, it has a Ghana
hierarchical organizational structure from the central headquarters in Accra (the
capital city) to the regions, districts, and sub-districts. Services are delivered through a
network of facilities, with health centres and district hospitals providing primary 49
health care services, regional hospitals providing secondary health care, and two
teaching hospitals at the apex providing tertiary services (Ghana Medium-Term
Health Strategy, 1995). The two teaching hospitals also play a key role in teaching and
research – offering facilities for the training of physicians and other health
professionals, and as well for medical and public health research (Govindaraj et al.,
1996). The structure of the health sector is illustrated in Figure 1.
The Ministry of Health is charged with the responsibility of regulating the entire
health sector through its several policies. The main function of the Ministry is policy
formulation, coordination and regulation of the stakeholders in the health sector. In
formulating such policies or guidelines for regulation, the ministry collaborates with
various ministries, departments and agencies (MDAs) as well as other partners and
stakeholders in the health sector. According to the Second Five Year Programme of
Work 2002-2006, the targeted MDAs are the Ministries of Education, Environment,
Science and Technology, Works and Housing, and Local Government and Rural
Development. The partners are also made up mainly of bilateral and multi-lateral
donors, NGO’s and civil society organizations. However, the implementation of the
policies and the enforcement of its regulations are carried out directly and indirectly by
such MDA’s and other institutions working with the ministry (Ackon, 2003;
Abekah-Nkrumah, 2005). Policy implementation is carried out through the public,
private and traditional sectors. At the public sector end, the Ghana Health Service
(GHS), Teaching Hospitals Board (THB) and the Quasi Government Institution
Hospitals (QGIH) are the implementing agencies of the ministry.
The Ghana Health Service is responsible for the implementation of government’s
health policy and regulation of state run health institutions (i.e. GHSP – Government
Hospitals, PC – Poly Clinic, HC – Health Centres). For the purpose of carrying out its
functions, the Ghana Health Service has a secretariat that has been decentralized from
the national level to the regions and the districts. At each level there is a team of
management that administers the affairs of the service. The districts report to the
regions and the regions report to the national level as stipulated in the Ghana Health
Service and Teaching Hospitals Act (1996), Act 525. The Teaching Hospital Board
(THB) is the institution responsible for the implementation of government’s health
policy and regulation at the teaching hospital level. This institution was also
established by Act 525. The last of the public sector agencies is the Quasi Government
Institution hospitals (QGIH). This is currently an association and not a statutory body
backed by relevant legislation. It is responsible for the implementation and regulation
of hospitals owned by quasi government institutions (Ackon, 2003; Abekah-Nkrumah,
2005)
The private sector is also a major player in Ghana’s health sector, responsible for
about 40 per cent of total healthcare delivery (Abekah-Nkrumah, 2006). The main
regulatory body for the private sector is the Private Hospitals and Maternity Homes
LHS
21,1

50

Figure 1.
Structure of the health
sector in Ghana

Board (PHMHB), established by Act 1958 (No. 9) as amended. The main providers in
the private sector are the mission-based providers; consisting of Christian and Moslem
hospitals (MBP) and the private medical and dental practitioners. Finally, activities of
the traditional sector are regulated by a directorate in the Ministry of Health. However,
the institutional and legal framework necessary to carry out such work is currently not
in place. The main traditional healthcare providers in this sector are the Traditional
Medical Providers (TMP), Alternative Medicine (AM) and Faith-based Healers (FH)
(Ackon, 2003; Abekah-Nkrumah, 2005).

3. Methodology
This study employs a comparative case methodology. This study compares the
governance structures in private hospitals to that of public hospitals in Ghana to
ascertain whether they exhibit different or similar governance systems. This is done by Hospital
examining elements of the governance structure in place, such as board size, board governance in
composition, board appointment, and CEO duality. The paper also discusses the
governance systems in light of Taylor’s (2000) nine principles of good governance. Ghana
This is to determine whether or not Taylor’s good governance principles are being
applied in the Ghanaian health care delivery system. We sampled two public hospitals
and two private hospitals. For the purpose of confidentiality, we refer to the public 51
hospitals as Case A and Case B. The two private hospitals are also referred to as Case X
and Case Y. These hospitals were chosen because they are recognized as being among
the largest hospitals in the country, and therefore we believe they would have
relatively more developed hospital governance structure.
Information on hospital governance was obtained through open-ended
questionnaires and personal interviews. We specifically interviewed the hospital
administrators in the respective hospitals to obtain information on the internal
structural elements of each hospital’s governance system. We interviewed some key
players in the health sector including officials from the Ministry of Health. We also
relied on published information and other secondary sources of data on the hospitals
and from the Ministry of Health. The results of the study are presented and analysed in
a descriptive manner.

4. Discussion
In this section, we first discuss the governance structures in private and public
hospitals. Governance elements such as board size, board composition, board
appointment, and CEO duality are looked at. We also discuss the governance systems
in relation to Taylor’s principles of good governance.

Hospital governance structure

The size of the hospital board is an important element in its overall governance
structure. It has been argued that a board’s ability to monitor and make important
decision improves with its size. This is because there is the need to ensure diversity of
perspectives, backgrounds, expertise and experience within the board. However, it has
also been suggested that, there is the need to keep board size sufficiently small to
facilitate open and effective dialogue and the full participation and contribution of each
director (PMH Foundation and the Canadian Comprehensive Auditing Foundation,
2001). Maintaining a small board size is likely to result in the board’s ability to give
more effective oversight to the management of the hospital. Jensen (1993) argues that
there should be an upper limit to board membership to make it an effective governance
mechanism. In practice, determining an optimal board size may be dependent on the
size of the hospital and its scope of operation. In our study, it was noted that the public
hospitals, i.e. Case A and Case B currently, have board size of 11 excluding the
ex-official member (board secretary). The private hospitals (Case X and Case Y) employ
about four and six board members respectively. Clearly, the differences in the board
sizes between the public and private hospitals could be attributed to the size of the two
types of hospitals. Public hospitals are generally bigger than their private
counterparts.
The composition of the hospital board is also a critical component of the hospital
governance system. Greater emphasis is currently placed on outside directors because
LHS they are usually in a position to play a more crucial role in decision making. Jensen
21,1 (1993) suggests that a high proportion of outside directors provide a better forum for
decision-making; in many cases the executive team has less influence. In addition to
looking at the board composition in terms of the proportion of non-executive directors
on the board, it is important to consider the board composition in terms of those with
medical or health background and those with other experiences. We observed in this
52 study that, each of the public hospitals had five non-executive or outside directors and
six executive directors. The private hospitals had two executives each on the board.
For the hospital board to function effectively, it is suggested that board members
must consist of individuals who have both generic attributes and specific skills to
support the policy formulation, decision-making and oversight processes in relation to
the full scope of board responsibilities (Quigley and Scott, 2004). Current best practices
in the selection of board members emphasize the importance of hospital boards
establishing clear policy guidelines for director selection, including generic attributes
and specific skills and expertise and a systematic annual process for analysing the
current skills and expertise within the board. This should serve as a foundation for
succession planning and recruitment of new directors to fill the gaps. Once this
framework is established as policy by the board, the responsibility for implementing
the guidelines and process on behalf of the board can be delegated to a board
committee, typically a Governance Committee (University Health Network, 2002).
In the Ghanaian public hospitals such as those under the Ghana Health Service,
board members are appointed by Ghana Health Service Council. The board members of
the teaching hospitals are appointed by the Ministry of Health. Such appointments are
often perceived as appointment by the government since both the Ghana Health
Service and the Ministry of Health are accountable to the government. This situation
restricts the board in playing an independent role. The public hospitals’ inability to
function independently of government could render them ineffective. It is also not clear
how representations of the boards are of the community they serve (Govindaraj et al.,
1996). The boards of these public hospitals are constrained in a number of respects. For
instance, they cannot unilaterally change the hospitals’ fee. They cannot develop their
own procurement system (Weinberg, 1993). They are also restricted in their control
over staffing and capital investment (McPake, 1996). These restrictions could limit the
boards from ensuring efficiency in the running of the hospitals. The private hospitals’
boards as in the case of Case X and Case Y are appointed by the owner/CEO. The board
members are usually friends and family members of the owner. Even though the
boards in principle have the responsibility of formulating policies and developing
strategy for the functioning of the hospitals, these are mostly done by the CEO. The
board of directors as a team is mostly not actively involved in the overall strategic
management of the private hospitals.
In both Case X and Case Y, the hospitals use the board structure typology where the
CEO also acts at the board chair. The CEOs also happen to be medical doctors who are
involved in daily clinical work. Studies have shown that, in a board system where the
CEO also acts as board chair, it could lead to leadership conflicts. Considering that
these private hospitals are owner-managed, the CEO acting as the board chair certainly
renders the board inefficient. This explains why most decisions are taken without the
approval of the board as a team. The CEO mostly wields more power to implement
certain decisions without consulting the hospital board. However, in the public
hospitals, the CEO’s position is different from that of the board chairman. The CEOs in Hospital
the public hospitals are also persons with medical background but are comparatively governance in
less involved in daily clinical assignments as their private counterparts. The boards in
the public hospitals are appointed by government through either the Ghana health Ghana
council for Ghana Health Service hospitals or the Ministry of Health for teaching
hospitals. We found that all the CEOs in the four hospitals are medical doctors with no
expertise in management. This could affect the efficient running of these hospitals. 53
Principles of good governance
We now discuss the hospitals’ governance systems in line with Taylor’s (2000)
principles of good governance. These principles are summarized in Table I. The first
principle deals with “knowing what governance is”. The boards of the public hospitals
tend to have clearly defined functions and responsibilities. Both Case A and Case B
have mission statements and sets of objectives which are mainly defined by law. The
two hospitals interviewed currently have eleven-member boards normally appointed
by government through the Ministry of Health. The boards are made up of executive
and non-executive directors with backgrounds in medicine, law, finance, research and
teaching. The private hospitals (Case X and Case Y) also have clear mission statements
and sets of objectives. They have a five-member board (in respect of Case X) and a
six-member board (in respect of Case Y). The board members are appointed by the
owner/CEO, who is also a medical doctor. Though a greater proportion of
non-executive directors are represented on the boards of private hospitals, they are
mostly not actively involved in the strategic decision making.
The second principle is “achievement of strategic ends”. Hospitals and other health
service agencies are increasingly under pressure to be effective, in the provision of the
right service, at the right place, at the right time, and at an affordable cost. Therefore,
the governance and organizational structure of today’s hospital must be such that
performance objectives or ends can be set, measured and accomplished in terms of
values, goals and activities (Taylor, 2000). The sources of funding public hospitals in
Ghana include government budgetary allocation, user fees, and donor support through
aid and grants. Public hospitals are not required to make profits and therefore their
boards are not under any pressure to maximize shareholder value. Such boards usually
have the responsibilities of achieving social and non-financial goals. This situation is
very different in private hospitals, especially profit-making hospitals. The two private
hospitals in our sample are for-profit-making organizations. Their boards are therefore
required to return profit to their shareholders, whiles ensuring effective and efficient
health delivery by the hospitals. Their main source of funding is patients’ fees. The
boards of the private hospitals are also expected to ensure efficient management of the
hospitals’ resources.
The third principle is “board-CEO relationship”. Carver (1990a) maintains that the
relationship between the board of directors and the CEO is very important for ensuring
organizational effectiveness. Gillies (1992) also explains that any organization will be
effective and high-performing if there is a high level of mutual confidence and trust
throughout the organization, especially between the board of directors and the CEO.
With such confidence, the board can perform the role of advising and consenting to the
CEO’s plans and strategy implementation (Colley et al., 2003). Taylor (2000) suggests
that it is important to think of the organization as a number of concentric circles with
LHS
Principle Application
21,1
Knowing what governance is CEO is responsible to board for implementing its
policies plans and strategic directions. Board is
responsible for developing corporate policies and
plans; monitoring and measuring organizational
54 performance against those policies and plans; and
acting as a voice of the ownership of the hospital.
Board’s governance responsibilities are to provide a
linkage between the hospital and its moral
ownership; monitor the performance of the CEO; and
develop an explicit statement of values for the
hospital
Achievement of strategic ends To be effective by providing the right service, at the
right place, at the right time, and at an affordable
cost. Hospital governance structures must be such
that performance objectives can be set, measured
and accomplished
Board-CEO relationship Relationship is typified by a high level of mutual
confidence and trust throughout the organization
and particularly between the board of directors and
CEO. Governance viewed as a solemn partnership
between board and CEO. Board members and the
CEO are equals, colleagues. Organizations should be
conceived of as a number of concentric circles with
clients in the outermost circle and the CEO in the
inner circle
Unity of direction The CEO and board should function as a common
body to pursue a common end. There should be only
one board of governors, one CEO, one strategic plan,
mission or vision, at any one time
Unity of command Orders should be received from one superior only.
Decision making authority should flow in a straight
line from the top to the bottom of the organization
Unity of accountability and responsibility Authority is a derivative of responsibility. Every
employee, including the CEO, must be held
accountable for the exercise of authority in executing
his/her responsibilities
Ownership needs A hospital’s board ultimate accountability is to the
organization’s ownership
Self-improvement and quality management Continuous improvement should be part of an
organizational philosophy and should permeate all
hospital management and governance practice
Understanding the cost of governance These include: board member’s personal opportunity
costs, direct board meeting expenses, the costs of
staff supporting board activities, the costs associated
with errors made by boards, and the costs of
ineffectively structured governance-management-
Table I. organization relationships
Taylor’s principles of
good governance Source: Ditzel et al. (2006)
clients in the outmost circle and the CEO in the innermost circle, than as layers or Hospital
pyramids. The CEO and board of directors form a governance partnership at the centre governance in
of these circles. Mintzberg (1987) argues that the board by majority vote has authority
over the CEO and the CEO is accountable to only the board as a whole for the Ghana
organization’s performance. The board is in charge of hiring, evaluating and firing the
CEO (Taylor, 2000). In public hospitals, the boards and CEOs are appointed by the
Ghana Health Service Council and the Ministry of Health for Ghana Health Service 55
hospitals and the teaching hospitals respectively. Unlike the Ghana Health Service
hospitals, the appointment of CEOs in teaching hospitals is often times influenced by
government. This situation contradicts Taylor’s (2000) principle, in that, where the
appointment of the CEO is influenced by government, it may undermine the work of
the board, thus, adversely affecting the board-CEO relationship. In the case of the two
private hospitals interviewed, because one person combines the positions of CEO and
board chair, he tends to wield too much power. This clearly puts the CEO in a position
to manipulate the board. It is conflict of interest to have the CEO sit as a voting
member, let alone function as board chair (Carver, 1990a; Gillies, 1992). Our findings in
both the private and public hospitals violate the principle of board-CEO relationship.
The fourth principle of good governance is “unity of direction”. It has been observed
that higher performing organizations have only one board of governors, one CEO and
one strategic plan, mission or vision at any time (Fayol, 1949). It is suggested that all
aspects of the organization’s governance system should function in unison to ensure
strategic success. The creation of governance partnership of the hospital board and the
CEO is crucial in pursuing a common mission or vision. The public hospitals can be
said to exhibit unity of direction. All elements of the hospitals’ governance systems
pursue a common goal. The CEOs and hospital boards aspire to meet the same social
objectives of their respective hospitals. However, there are instances where activities of
the boards are undermined by the actions of the CEOs. This could be attributed to
government’s interference in the appointments of these CEOs. The principle of unity of
direction is not really a problem in the private hospitals’ settings. This is mainly
because roles of the board chair and CEO are handled by one person. For instance, in
all the two private hospitals interviewed, the owner is the same as the CEO and board
chair. Clearly, such a situation creates conflict of interest.
The fifth principle, “unity of command” requires that decision-making authority or
chain of command flows in a straight line from the top to the bottom of the
organization. That is from the board to the CEO to various staff levels in the hospital.
Anything contrary to this principle can result in confusion, undermine authority,
threaten stability, breed irresponsibility and possibly wreak havoc (Fayol, 1949;
Mintzberg, 1979; Anderson, 1984). Even though the CEOs in the public hospitals are
supposed to report to the hospital boards, there are many instances where they have
dealt directly with the Minister of Health. The current governance structures in the two
private hospitals interviewed (in both Case X and Case Y) do not allow for direct
application of this principle. Since the CEOs are also chairpersons of the hospital board,
they tend to wield a lot of power, and often take decisions without bringing them to the
attention of the boards. However, in both the public and private hospitals, the chain of
command flows from CEO through management to various staff level, though the
private hospitals maintain a relatively flat organogram.
LHS Principle six is known as “unity of accountability and responsibility”. Subordinates
21,1 are usually responsible for their performance directly to their supervisors, and
supervisors are directly responsible for the performance of those they supervise
(Anderson, 1984). Fayol (1949) suggests that authority within an organization should
always be commensurate with responsibly. Four aspects of accountability have been
proposed in a hospital setting, and the governance structure and culture of the hospital
56 should enable the fulfilment of each (Alexander et al., 1995; Gamm, 1996; Griffith, 1996;
Shortfall et al., 1996; Taylor, 2000). These are political accountability, commercial
accountability, clinical accountability, and community accountability. Political
accountability deals with the hospital’s achievement of all externally imposed
mandates within the boundaries set. Commercial accountability is the net value created
within the services provided by the hospital. Clinical accountability connotes patient
outcomes and satisfaction. Community accountability is the hospital’s role in
improving the health status of its community. The boards of directors in the public
hospitals in Ghana are accountable to stakeholders, i.e. the community they serve and
the government through the Ghana Health Service and Ministry of Health. The CEO is
also accountable to the board and management is also accountable to the CEO.
However, in the private hospitals, the board is accountable to the owner who happens
to be the CEO. The governance structures in the private hospitals do not allow for
proper adherence to the principle of unity of accountability.
“Ownership needs” is the seventh principle. The stewardship theory suggests that
the board of directors is put in a position of trust, to take care of the owners’
investments. The governing board is required to do a good job and to be a good
steward of the organization’s assets (Donaldson and Davis, 1991). The board is
required to act as a voice of the owners. In the public hospitals, government as the
owner appoints the hospital boards, who are responsible to government through the
Ministry of Health, and in the case of non-teaching hospitals through the Ghana Health
Service. The board is expected to fulfill government’s plan of ensuring effective and
efficient healthcare delivery in the community. In the two private hospitals (i.e. Case X
and Case Y), appointment of the board is done by the CEO/owner. Since the private
hospitals in our sample are for-profit-making, the hospital boards are expected to
maximize shareholder value in addition to ensuring effective and efficient health care
delivery.
Principle eight is known as “self-improvement and quality of management”. To
ensure total quality management, continuous improvement as an organizational
philosophy needs to permeate all aspects of the hospital (Taylor, 2000). This is because
hospitals are not just economic entities but also social entities (Saltman, 1997). The
boards in the public hospitals are largely representative of people from various
backgrounds, including strategic management and finance, legal, medicine, research,
education etc. They include very competent and qualified members who can easily
learn and pick up issues they were not originally trained in. The relatively small size of
the private hospitals’ board does not allow for broad representation of various
disciplines, however their board members are qualified in business management, law
and medicine, some being friends and family members of the owner.
The last principle covers “understanding the cost of governance”. Most boards are
also regarded as cost centres and the cost elements will cover payment of board
members, direct cost of meeting, cost of staff supporting board activities, costs
associated with errors made by boards, and costs of ineffectively structured Hospital
governance-management-organization relationship (Carver, 1990b). Another important governance in
element of hospital governance should include cost of external audit and cost of
maintaining an audit committee. Both the public and private hospitals’ board members Ghana
are paid directors’ emoluments and in some cases sitting allowance. It is important to
note that the size of the hospital board has implications for meeting expenses. In this
regard, the public hospitals are expected to incur huge expenses on photocopying, 57
postage, refreshment, education etc. The public hospitals have an audit committee and
are also subject to regular audit processes. Their annual reports clearly spell out the
financial position and operations of the hospital during the year. The private hospitals
do not have an audit committee but their accounts are also subject to annual audit by
an independent private audit firm.
Good hospital governance underpins effective health services delivery. It requires
good management, good performance, good stewardship, and, ultimately good
outcomes. It is important to consider that good governance is a component of hospital
leadership. Effective leadership could be seen manifested when people display good
governance practices. It could also be argued that good governance of the hospital
would be difficult if not impossible without effective leadership in the hospital. One
could explain then that the governing board’s performance is a function of the
leadership skills of its members. Without effective leadership in the hospital,
governance suffers and ultimately health services are affected. Effective leadership
creates a vision of the future that considers the legitimate long-term interest of the
parties involved in the organization, develops a strategy for moving towards that
vision, enlists the support of employees to produce the movement, and motivates
employees to implement the strategy (Rue and Byars, 2005). Effective hospital
leadership goes hand in hand with good hospital governance, and together they are the
twin engines that power good health services delivery.

5. Conclusion and implications

This study compares the governance structures in private and public hospitals in
Ghana. The paper also discusses the current governance systems in these hospitals in
line with Taylor’s (2000) principles of good governance. The results of the study
revealed numerous differences in the governance structures in private and public
hospitals. Public hospitals employ large board size compared to the private hospitals.
This difference in the board sizes could be attributed to the size of the two types of
hospitals. Though the small size of the private hospital’s board is not rightly
represented, if it is well organized, it could be well positioned to be effective in
achieving the hospitals’ strategic goals. The public hospitals also employ greater
proportion of executive directors. These are typically, heads of the departments. In
Ghanaian public hospitals, board members and CEO are appointed by government
either through the Ghana Health Service or the Ministry of Health as the case may be.
This situation restricts the board in playing an independent role. The private hospitals’
boards are appointed by the owner/CEO. The board members are usually friends and
family members of the owner. The private hospitals use the board structure typology
where the CEO also acts as the board chair. The CEOs also happen to be medical
doctors who are involved in daily clinical work. However, in the public hospitals, the
CEO’s position is different from that of the board chairman. The CEOs in the public
LHS hospitals are also persons with medical background but are not as involved in daily
21,1 clinical assignments as their counterparts in the private hospitals.
From the review of Taylor’s (2000) principles of good governance and the
comparative case analysis, it was observed that some of the principles are not present
in the current hospital governance systems in our sample. In the public hospitals, the
principles of “board-CEO relationship”, “unity of direction”, “unity of command”, and
58 “unity of accountability and responsibility” are not adhered to. This could be attributed
to government’s interference in the appointments of the CEOs, especially for teaching
hospitals, thus undermining the work of the board. Where the CEO is appointed by
government, we are likely to find a situation where the CEO does not account to the
board but rather the Minister of Health, thus breaking the chain of command that is
supposed to exist in the hospital. In the case of the private hospitals, the current
structure violates the principle of “knowing what governance is”, “unity of direction”,
“unity of command”, and “unity of accountability and responsibility”. The
appointment of friends and family members on the board does not augur well for
proper hospital governance. Moreover, the board typology of having the CEO/owner
also serving as the board chair gives excessive power to act and take decisions outside
the board. The board under such circumstance is only seen as a rubber stamp.
To ensure proper governance in our hospitals, it is recommended that the
appointment of the CEO in the public hospitals should be left to the board without
government’s influence. The board should be in charge of hiring and firing the CEO.
The private hospitals should consider a board typology where the roles of the CEO and
board chair are handled by different people. There should be clear guidelines regarding
the appointment of the board members in both the public and private hospitals. This
should include the caliber of board members, tenure of the board, board size and
composition. The roles and responsibilities of the board as a team and the individual
members should be clearly detailed. Appointments of the hospitals’ boards should be
based mainly on competence and devoid of nepotism and cronyism. It is also
recommended that non-medical personnel with expertise in management should be
appointed CEOs in the hospitals, while medical specialists run their departments and
clinics. This is the model used in most hospitals in Europe, North America and other
developed economies.
The findings of this study have significant implications for the leadership of these
hospitals. Good hospital governance could be seen as an important aspect of
leadership. Hospitals with good governance structures could positively influence
leadership practices and therefore enhance the achievement of the hospitals’ goals.
Further research is however needed to fully understand the governance systems in
Ghanaian hospitals. Future research should increase the sample size by looking at a
country wide study that focuses on all the health care delivery systems in Ghana. Also,
future research should incorporate a comparison with other African health care
systems. Another research area will be to empirically examine how hospital
performance is affected by the hospital governance system.

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Corresponding author
Patience Aseweh Abor can be contacted at: patienceaseweh@yahoo.com

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