Item Description:
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Amending the Bylaws of Hennepin Healthcare System, Inc. (HHS) to remove “system physicians” from the Board and replacing with the elected President of the Medical Staff who will act as an ex officio voting member of the HHS Board
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Resolution:
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BE IT RESOLVED, that Sections 4.3, 4.4, 4.5, 4.9, 7.6 and Article XV of the Bylaws of Hennepin Healthcare System, Inc. (HHS) all be amended consistent with the Ninth Amended Bylaws attached hereto, to appoint the elected President of the Medical Staff as an ex officio voting member and to phase out the requirement that two HHS Board seats be reserved for “system physicians”; and
BE IT FURTHER RESOLVED, that the HHS Board members who are currently appointed to the seats reserved for “system physicians” will complete their existing terms.
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Background:
The Hennepin County Board of Commissioners has certain reserved powers over HHS, its public subsidiary corporation. One of those reserved powers includes approval by the County Board of any change in the HHS Bylaws relating to:
1) the mission of the Corporation;
2) board composition, board and officer selection, terms, removal, or qualifications;
3) the County Board’s reserved powers as specified in these Bylaws;
4) the ability of the Corporation to engage in joint ventures;
5) the ability of the Corporation to incur debt through the County;
6) the ability of the Corporation to create subsidiaries;
7) the ability of the Corporation to use subsidiaries to undertake functions or activities performed by employees of the Corporation; and
8) the ability of the Corporation to merge or dissolve[.]
(HHS Eighth Amended Bylaws at Section 3.4(i)(1-8); see also Minnesota Statutes § 383B.906).
The HHS Executive and Governance Committee commenced its annual review of the HHS Bylaws in January of 2023. The Committee proposed amendments throughout the Bylaws, which the HHS Board approved at its October 25, 2023, meeting. Multiple proposed amendments in Sections 4.3, 4.4, 4.5, 4.9, 7.6 and Article XV are subject to Hennepin County’s reserved powers and are detailed below.
Under the prior Bylaws, two HHS Board seats were reserved for “system physicians,” as part of the 2012 agreement that merged Hennepin Faculty Associates into HHS. Under the proposed amendments to Sections 4.3, 4.4, 4.5, 4.9, 7.6 and Article XV, those two HHS Board seats will no longer be reserved for “system physicians” and are replaced by the elected President of the Medical Staff who will be appointed as an ex officio voting member of the HHS Board.
For continuity, the current System Physicians who serve as HHS Board Directors will serve out their remaining terms. Dr. Thomas Wyatt is anticipated to serve out their term until June 2024 at which time the elected President of the Medical Staff will commence their appointment. Dr. Arti Prasad is anticipated to continue out their term ending July of 2026. When Dr. Prasad’s term ends, the seat will be filled through the usual process of the HHS Board recruiting and recommending a Director, subject to the ultimate approval of the Hennepin County Board.
The HHS Board approved several other amendments to the HHS Bylaws that do not require the approval of the Hennepin County Board because they are outside of the County’s reserved powers. As additional background, those changes include:
• Moving language regarding Board vacancies from section 7.6 to 4.11.
• Adding Mission Effectiveness as Board Committee and description of the same.
• Renaming the “Audit” Committee to the “Audit and Compliance” Committee.
• Changes to the composition of the Executive Committee. Memorialization that one County Commissioner HHS Board member will be offered a seat on the Committee if not already a member by way status as a committee chair.
If the Hennepin County Board approves these proposed amendments, the Ninth Amended HHS Bylaws will become effective on January 1, 2024.
recommendation
Recommendation from County Administrator: Recommend Approval