The Critical Role of Effective Governance in Credit Analysis – Corporate Governance

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The effectiveness of corporate governance has long been an important part of the health system rating process. Major credit rating agencies routinely conduct in-depth assessment, examining specific attributes of health system governance as part of their broader credit analyzes – reviews that increasingly include an assessment of environmental factors, Social and Governance (ESG) and other non-financial factors. The goal? Help investors assess governance issues consistently.

Health system boards in general—and their finance committees in particular—must therefore monitor the credit rating process and ensure that their governance structures are sensitive to the factors that rating agencies believe contribute to financial stability and debt responsiveness.

To highlight the important links between financial risk management, the credit rating process and effective governance, Michael Peregrine welcomes Lisa GoldsteinSenior Vice President of Kauffman Hall and nationally recognized nonprofit health care analyst, speaker, writer, and expert, for a conversation exploring:

  • The Responsibilities of a Strong Finance Committee

  • The value of subject matter expertise on the finance committee

  • Key indicators used by rating agencies to assess governance

  • Insights from High Performing Health System Boards

  • The role of covenant management in repayment performance

  • Lessons learned from the pandemic, including credit crisis management

  • ESG Issues for Nonprofit Healthcare

Originally published August 26, 2022

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