Mayo Clinic: Governance and Management Structure

(Approved by Board of Trustees on Feb. 17, 2006)
(Revised and Approved by Board of Trustees on Feb. 15, 2008)

I. Responsibilities, Accountability, and Authority of Mayo Leadership Positions and Committees

1. Board of Trustees
   Responsibilities
   1. The Board of Trustees is the governing body of Mayo Clinic. It has overall responsibility for the charitable, clinical practice, scientific, and educational mission and purposes of Mayo Clinic as set forth in its Articles of Incorporation and Bylaws. The Board of Trustees may delegate management responsibility in accordance with the Bylaws as it may from time to time determine. The Board of Trustees shall:
      1. Monitor, provide oversight, and evaluate the affairs of Mayo Clinic in the best interest of Mayo Clinic, the community it serves, and its employees.
      2. Ensure that the President/CEO leads Mayo Clinic in a manner that is lawful, prudent, and consistent with its corporate compliance plan and with ethical business and professional practices.
      3. Execute the responsibilities of the standing Committees of the Board of Trustees:
         1. Mayo Clinic Board of Governors (which is the Executive Committee of the Board of Trustees)
         2. Audit and Compliance Committee
         3. Committee on Officer Succession, Compensation, and Governance
         4. Development Committee
         5. Investment Policy Committee
         6. Investment Subcommittee
         7. Nominating Committee
         8. Business Planning Committee
      4. Confirm overall enterprise strategy.
      5. Approve operating and capital budgets and long-term financial goals.
      6. Ensure President/CEO meets operating plans.
      7. Preserve the tax-exempt status of Mayo Clinic and its tax-exempt affiliates by ensuring that the President/CEO causes all activities to be conducted in compliance with their IRC 501(C)(3) status.
      8. Review the periodic performance evaluation of the President/CEO conducted by the Mayo Clinic Board of Governors and take appropriate action.
   2. The Board of Trustees shall elect a Chairperson who shall ensure the integrity of the Board's processes and shall coordinate with the President/CEO to discuss issues of importance to the Board of Trustees. Moreover, the Board of Trustees shall elect all other officers of Mayo Clinic nominated by the Mayo Clinic Board of Governors.
      
      In discharging its responsibilities, the Board of Trustees may rely in good faith upon and shall have access to:
      1. Information, reports, and recommendations of the President/CEO and of senior management to whom the President/CEO delegates authority.
      2. Books and records of Mayo Clinic and its affiliates.
      3. Outside auditors and advisors retained by Mayo Clinic to confirm the effectiveness of financial and compliance controls
      4. Such additional advisors and consultants as the Board of Trustees or any of its Committees engages from time to time.
   Accountability

   The Board of Trustees is accountable to the patients, staff, public, and donors served by the charitable, educational and scientific purposes of the Mayo Clinic.

   Authority

   The Board of Trustees has the authority to determine Mayo Clinic policies required for the operation of the institution. The Board of Trustees has the authority to elect the Chair of the Board of Trustees and to act on final election of all other officers of Mayo Clinic nominated by the Mayo Clinic Board of Governors.

   3. President/Chief Executive Officer
      Responsibilities
      1. Subject to oversight and authority of the Board of Trustees, the President/CEO is primarily responsible for leadership and management of the Mayo Clinic. The President/CEO shall:
         1. Serve as the ultimate guardian of the mission of the Mayo Clinic.
         2. Define and coordinate Mayo Clinic's vision, mission, and strategy, and accomplish enterprise alignment with the strategy (including the strategic plan for enterprise diversification activities) and market positioning.
         3. Provide financial stewardship
            1. Develop long-range financial models, to include cash flows and capital expenditures.
            2. Oversee annual operating budgets, including cash flows and capital expenditures.
            3. Set overall financial targets for all operating units.
            4. Set level of Mayo Clinic funding for research
            5. Set level of Mayo Clinic funding for education.
            6. Be responsible for compensation and benefit policies.
         4. Formulate Mayo's position on public policy and represent Mayo at Federal level.
         5. Oversee decisions with system-wide implications.
         6. Ensure adherence to Mayo Clinic policies.
         7. Ensure and maintain system-wide integration.
         8. Lead and facilitate collaborative relationships among Mayo entities.
         9. Maintain collaborative relationships among the site CEOs.
         10. Develop long-range Development strategy including approval of all development funding priorities. Work collaboratively with Development.
         11. In coordination with the site CEOs, communicate regularly with staff regarding the vision, strategy, and performance of Mayo Clinic.
         12. Chair of the Mayo Clinic Board of Governors/Executive Committee of Board of Trustees.
         13. Chair the Mayo Clinic Management Team to achieve:
             1. Quality and balance in clinical practice, education, and research;
             2. Satisfactory financial performance;
             3. Fulfillment of Mayo Clinic's goals; and
             4. Expedite decisions, ensure collaboration, maintain flexibility, and help team members meet their responsibilities.
         14. Cause all activities of Mayo Clinic and its exempt affiliates to be conducted in compliance with IRC 501(c)(3) status.
      2. Evaluate and oversee performance of senior management annually. Ensure that Mayo Clinic has effective leadership development and succession planning.
      3. The President/CEO is responsible to regularly advise the Board of Trustees and its Committees on all corporate matters so that the Board of Trustees has sufficient information to perform its duties. In consultation with the Chair of the Board of Trustees, the President/CEO will develop the agenda for meetings of the Board of Trustees.
      4. Exemplify Mayo's principles and values.
      Accountability

      The President/CEO is directly accountable to the full Board of Trustees for personal and enterprise performance. In addition, the position of President/CEO carries with it an explicit expectation of accountability to our patients and staff.

      Authority

      The President/CEO has ultimate authority for the decisions that influence the performance of Mayo Clinic.

   4. Mayo Clinic Board of Governors/Executive Committee of Board of Trustees ("MCBOG")
      Responsibilities
      1. Subject to the oversight, authority, and approval (governance) of the Board of Trustees, serves as the single internal point of high level enterprise internal governance of Mayo Clinic and as the "Executive Committee" of the Board of Trustees. The President is the Chair of the MCBOG.
      2. Assists the President/CEO in accomplishing the following:
         1. Define and coordinate Mayo Clinic's vision, mission, and strategy, and accomplish enterprise alignment with the strategy (including the strategic plan for enterprise diversification activities) and market positioning.
         2. Formulate and oversee Mayo Clinic enterprise goals and policies.
         3. Define enterprise market positioning.
         4. Develop and oversee system-wide Mayo Clinic performance metrics including:
            1. Long-range financial models, to include cash flows and capital expenditures.
            2. Annual operating budgets, including cash flows and capital expenditures.
            3. Overall financial targets for all operating units.
         5. Set level of Mayo Clinic funding for research
         6. Set level of Mayo Clinic funding for education.
         7. Develop long-range Development strategy and approval of Development funding priorities.
         8. Be responsible for compensation and benefit policies directly or through delegation to the Salary and Benefits Committee which is a subcommittee of the MCBOG.
         9. Formulate Mayo's position on public policy to represent Mayo at the Federal level.
         10. Causing activities of Mayo Clinic to be conducted in compliance with IRC 501(c)(3) status.
         11. Ensure that Mayo Clinic has effective leadership development and succession planning.
      3. Final approval authority to appoint all new appointments to the Mayo Clinic Staff at all sites based on recommendations of the Personnel Subcommittee.
      4. Exercise delegated powers of the Board of Trustees to make system-wide management, governance, strategy and policy decisions when decisions that require the approval of the Trustees need to be made between the regularly scheduled Trustee meetings.
      5. Perform functions specified in Section IV regarding the selection and evaluation of the President/CEO, and provide input on performance of other senior leaders.
      6. Establish and oversee Mayo Clinic goals and policies regarding enterprise initiatives and regarding required levels of consistency, coordination, and avoidance of impermissible inconsistencies across the organization. This responsibility includes establishing enterprise committees and assuring that enterprise committees operate effectively and rigorously comply with their respective roles, responsibilities and accountabilities.
      7. Subject to final authority of the Board of Trustees, the MCBOG shall be the primary body that exercises the following reserved powers of Mayo Clinic regarding its subsidiary organizations including Mayo Clinic Arizona, Mayo Clinic Jacksonville, Mayo Clinic Rochester, and Mayo Health Solutions:
         1. Approval of strategic plans of individual sites and Mayo Health Solutions including site strategic and operating plans;
         2. Annual capital and operating budget approval;
         3. Physician, scientist, and senior administrator salary policy;
         4. Employee benefits;
         5. Incurrence of debt;
         6. Each capital expenditure by item or aggregate program account in excess of $5 million;
         7. Any transfer of assets other than in the ordinary course of business;
         8. Use of the "Mayo" and "Mayo Clinic" name and other brand-related activity;
         9. Actions that may impact the tax exempt status of Mayo Clinic or any of its subsidiary entities.
         Accountability

         The MCBOG is accountable to the Board of Trustees and to our patients and staff.

         Authority

         The MCBOG has the authority to determine Mayo Clinic system-wide policies required for the operation of the institution, subject to the final approval of the Board of Trustees.

         The MCBOG has the authority to nominate the members of the MCBOG and recommend internal members of the Board of Trustees, subject to election by the Board of Trustees.

         The MCBOG has the authority to nominate the Mayo Clinic officers with input from and subject to election by the Board of Trustees.

         The MCBOG has the authority to confirm the election of members and officers of the site Executive Boards.

   5. Mayo Clinic Management Team
      
      Responsibilities:

      The Mayo Clinic Management Team supports the Mayo Clinic President/CEO in:

      1. Coordinating implementation of the Mayo Clinic strategic plan; dissemination of information to the sites and responsible parties.
      2. Overseeing operations that are common to all sites and oversee operations of one site that impacts other sites.
      3. Streamlining decision-making process for management decisions and approvals within the organization. Clarify "approval" from "information" in decision-making process.
      4. Allocating system-wide resources (personnel, facilities, capital) within overall financial and capital plans approved by MCBOG and Board of Trustees.
      5. Approving business plans in support of system strategy established by the Site Executive Boards of the Mayo Clinic sites, Mayo Health Solutions, and other enterprise diversification activities to ensure alignment of the plans with Mayo Clinic strategy and goals.
      6. Providing oversight of operational initiatives to ensure that performance meets approved business plan expectations.
      7. Fostering cooperation among Mayo Clinic Site leadership to enhance success for each entity.
      8. Fostering collaboration in practice, education, research, finance, administration, development, and communications across all operational units.
      9. Preparing operating plan that outlines system-wide initiatives.
      10. The President/CEO, with approval of the MCBOG, may delegate to another individual all or a portion of the role of Mayo Clinic Management Team Chair.
      Accountability

      The Mayo Clinic Management Team is accountable to the President/CEO. How the President/CEO utilizes and assigns responsibility to the Mayo Clinic Management Team will vary as determined by the President/CEO — the President/CEO's use of Mayo Clinic Management Team is subject to periodic review by MCBOG. The Mayo Clinic Management Team also is accountable to the individual sites and operating divisions and to the patients and staff of the Mayo Clinic.

      Authority

      The Mayo Clinic Management Team has the authority to make decisions necessary to fulfill its assigned responsibilities.

   6. Mayo Clinic Site CEOs
      Responsibilities
      1. Chair and provide leadership and direction to the site Executive Board to achieve:
         1. Quality and balance in clinical practice, education, and research
         2. Satisfactory financial performance
         3. Effective management of allocated resources
         4. Leadership development and succession planning
      2. Define and implement the site strategic plan in alignment with the Mayo Clinic strategic plan. Additionally, the Mayo Clinic Rochester Site CEO is responsible for the strategic plan and operational plan for Mayo Collaborative Services, Inc. laboratory outreach as part of Mayo Clinic Rochester Department of Laboratory Medicine and Pathology.
      3. Allocate resources at the site (personnel, facilities, capital).
      4. Ensure that site performance meets enterprise expectations.
      5. Work with Department Chairs to fulfill enterprise and departmental goals.
      6. Work collaboratively with the department chairs to ensure succession planning and leadership development.
      7. Participate actively in the Development program.
      8. Represent Mayo at the regional level.
      9. Work collaboratively with other Mayo Clinic leaders.
      10. Lead and facilitate collaborative relationships with other Mayo entities.
      11. Communicate regularly with staffs regarding the vision, strategy and performance of Mayo Clinic and the respective Mayo Clinic sites.
      12. Ensure adherence to Mayo Clinic policies.
      13. Exemplify Mayo's principles and values.
      14. Implement enterprise and local market positioning locally as defined by President/CEO and MCBOG.
      15. Cause all activities of site and its exempt affiliates to be conducted in compliance with IRC 501(c)(3) status.
      Accountability

      The site CEOs are directly accountable to the President/CEO of Mayo Clinic. The position of site CEO also carries with it an inherent expectation of accountability to the site Executive Board, patients, and staff.

      Authority

      The Site CEOs have authority to make decisions that influence the performance of the respective Mayo Clinic sites. Working in conjunction with the site Executive Board, the site CEO has the authority to make the decisions necessary to fulfill his/her assigned responsibilities.

   7. Mayo Clinic Arizona, Mayo Clinic Jacksonville, and Mayo Clinic Rochester Executive Boards
      

      Responsibilities

      1. Management and operational performance of the Site.
      2. Authority for local management issues delegated to the local site by the MCBOG.
      3. The Site Executive Board supports the Site CEO to:
         
         1. Define and implement the Site strategic plan in alignment with the Mayo Clinic strategic plan.
         2. Recommend to the MCBOG appointment of Mayo Clinic Staff at the local site and to administer site privileging consistent with Mayo Clinic policies.
         3. Review/audit organizational behavior to assure compliance and alignment with system wide policies.
         4. Allocate resources at the site (personnel, facilities, capital).
         5. Provide oversight to ensure that site performance meets enterprise expectations.
         6. Foster collaboration and integration across departments, shields, and sites recognizing and effectively managing the balance between Site optimization and enterprise coordination and optimization.
         7. Assure Site leadership development and succession planning.
         8. Represent Mayo at the regional level.
         9. Assure local implementation of enterprise and local market positioning.
      4. Participate in the process of selection, evaluation, and management of succession of the Site CEO.
      5. Mayo Health System will continue to report to Mayo Clinic Rochester.
      6. Assist site CEO in causing activities of site and its exempt affiliates to be conducted in compliance with IRC 501(c)(3) status.
      Accountability

      The Site Executive Boards are accountable to their respective Site CEOs and staff.

      Authority

      This group has the authority to fulfill its assigned responsibilities.

   II. Selection /Evaluation of President/CEO

   SELECTION:
   President/CEO

   1. A search committee will be recommended by the MCBOG to the full Board of Trustees for their approval. It will consist of the Chair of the Board of Trustees, a public member from the Committee on Officer Succession, Compensation, and Governance, two senior Mayo physicians who are self-determined non-candidates for the position, and one senior administrator. The Board Chair will act as search committee chair.
   2. Broad input regarding issues to be addressed, personal characteristics, and potential candidates will be obtained from the organization and from the Board of Trustees. A letter will be sent to all physician and administrative voting staff inviting their written input if they desire to provide it. In addition, individual interviews will be held with members of the three site Executive Boards, senior administrative leaders, Chairs of MMV, MCSI, Foundation Research Advisory Committee, Clinical Practice Advisory Group, Education Committee. All Trustees may give their comments to the search committee in writing or verbally.
   3. The search committee will then report their findings and recommendations to the MCBOG. With the concurrence of the MCBOG, the findings and recommendations will be presented to the full Board of Trustees for discussion.
   4. Election by the Board of Trustees.

   EVALUATION:
   President/CEO

   1. The President/CEO shall prepare written annual objectives for submission to the Board of Trustees by February 1st of each year. These will be discussed and approved at the February meeting of the Board of Trustees.
   2. The President/CEO shall prepare a written summary of accomplishments against the objectives by early October of each year. These will be submitted to an evaluation committee recommended by the MCBOG. It will consist of the Chair of the Board of Trustees, a public member from the Committee on Officer Succession, Compensation, and Governance, two senior Mayo physicians, and one senior administrator. The Board Chair will act as evaluation committee chair.
   3. This committee will evaluate the President/CEO's performance against the objectives. The committee may interview senior physicians when appropriate to aid in the evaluation. The committee's conclusions shall be reported first to the MCBOG (excluding the CEO) and then to the entire Board of Trustees in a session not attended by the CEO.
   4. Based on the committee's evaluation and Board discussion, the Chair of the Board of Trustees shall share the evaluation with the President/CEO immediately after the November meeting.
   5. The results of the evaluation shall be taken into consideration in the preparation of the CEO's succeeding year objectives.

   III. Selection/Evaluation of Site CEOs

   SELECTION:
   Site CEO

   1. The selection of a site CEO should be a common process across Mayo Clinic. To ensure both local and system-wide involvement and accountability, the following process will be used:
   1. A search committee will be formed which shall include two members from the local site Executive Board selected by the local site Executive Board (who are self-determined non-candidates for the position) and two members from the MCBOG selected by the MCBOG. Members from MCBOG should not be members of the site Executive Board in question. The search committee will be chaired by one of the two members of the site Executive Board. Broad input regarding issues, personal characteristics, and potential candidates will be obtained from the staff. The findings and recommendations of the search committee will be taken to the site Executive Board for approval. The findings and recommendations will then be taken to the MCBOG for approval.
   EVALUATION:
   Site CEO
   
   1. Annual evaluation (may periodically involve 360? review).
   2. The President/CEO and a designee of the local site Executive Board will perform an annual evaluation of each respective Site CEO. The evaluation process will include interviews by the President/CEO and Executive Board designee with individual members of the site Executive Board--the results of which would replace the "annual election" mentioned in the current version of the Mayo Clinic Rochester bylaws. These findings will be shared with the site CEO and, as appropriate, with the site Executive Board, in the context of achievement of an explicit list of performance expectations (defined previously).
   3. The President/CEO determines appropriate action based upon the review.

   IV. Membership Selection and Criteria for MCBOG, Mayo Clinic Management Team and Mayo Clinic (Site) Executive Boards

   Membership of the Mayo Clinic Board of Governors/Executive Committee of Board of Trustees

   1. Basic principles are as follows: physician-led, clear physician majority, non-representational, and self-perpetuating membership with input from and confirmation by the Voting Staff. "Non-representational" in this context means that, regardless of whether a member is in a "designated position" or an "at-large position", when at the MCBOG, all members are to function in a non-representational fashion. Generally, current clinical and scientific department and major division chairs will not serve concurrently on the MCBOG.
   2. The MCBOG will initially have 14 voting members as follows:
      
      Designated Positions
      
      • President/CEO, Chair
      • CAO, Secretary
      • MCJ CEO
      • MCR CEO
      • MCS CEO
      At-Large Positions
      
      • MCJ physician/scientist at-large*
      • MCR physician/scientist at-large*
      • MCS physician/scientist at-large*
      • Three Physician/scientists at-large**
      • Two Physician/scientist/administrators at-large**
      • One administrator at-large**

      *Eventually, the goal is to have all "at-large" positions free of any site designation; however, initially, each site should be assured of a minimum number of seats. It is recommended that the overall governance approach and this particular issue be re-evaluated every 2-3 years.

      **It is recommended that the individuals serving in these positions not simultaneously be members of a site Executive Board

   3. Members are nominated by the MCBOG, with input from key stakeholders, and are appointed by the Board of Trustees. Beginning in the fall of 2006 for terms staring in 2007, "at-large" members will be subject to confirmation by the single, combined Mayo Clinic Voting Staff in Arizona, Jacksonville, and Rochester. Also beginning in the fall of 2006 for terms starting in 2007, "designated" members will have their nomination submitted for endorsement by the single, combined Voting Staff and the results of such endorsement vote shall be reported to the Board of Trustees before the Board of Trustees votes on the appointment of such individuals to the MCBOG.
   4. Members should have senior leadership experience.
   5. Chair is President/CEO of Mayo Clinic except in extraordinary times such as transition or sickness.
   6. Vice Chair is a physician who is also a Vice President (VP) of the Mayo Clinic.
   7. The maximum membership is 14 members and the minimum membership is 7 members.
   8. The five "Designated Positions" and the seven "At-large" members with the longest tenure (on the MCBOG combined with prior service on the Mayo Foundation Executive Committee) shall be Internal Trustees. All internal trustees are not necessarily members of the MCBOG — initially, two members will not be Internal Trustees.
   9. Members shall serve staggered four-year terms. The usual duration for "At-large" positions is two consecutive terms (including prior consecutive terms on the Mayo Foundation Executive Committee).
   10. The Chair is responsible for defining roles for members and defining a process for member performance evaluation.
   11. By October 1 of each year, the MCBOG will determine the ex-officio, non-voting members of the Board for the following year.

   Membership of the Mayo Clinic Management Team

   1. Members shall include the Mayo Clinic President/CEO, Mayo Clinic CAO, Mayo Clinic CFO, site CEOs, site CAOs, and other members as designated by the Mayo Clinic President/CEO.

   Membership of the Mayo Clinic (Site) Executive Boards

   1. Members of the Mayo Clinic (Site) Executive Boards shall be nominated by the respective CEOs and respective site Executive Boards, subject to election by the MCBOG, and finally, confirmation by the local site Voting Staff.
   2. Members should be leaders from the organization who, preferably, have a breadth of experience across the institution. Members must be members of the Voting Staff of Mayo Clinic. Members are expected to actively solicit input from the Voting Staff and from enterprise leaders.
   3. Members should serve their local entity and support and serve the goals of Mayo Clinic.
   4. Terms shall be four years in duration. The usual maximum duration is two consecutive terms.
   5. The site CEO shall automatically become and shall remain a member for so long as he or she serves as site CEO.