The case ST. Michael’s Hospital Harvard Case Solution & Analysis


The case ST. Michael’s Hospital: Board Governance basically explains the situation of the hospital where it was merged with the Wellesley Central Hospital. The St. Michael Hospital was formed in 1892 by the sisters of St Joseph to look after poor and sick people of the Toronto inner city. In the early part of 1990s the hospital faced the issue of financial bankruptcy where the debt of the hospital reached an amount of over $63 million. Along with this, the hospital was facing a severe issue where the trust on leadership was no longer present. The situation was such that the Sisters did not trust the board, the board did not trust the management and the doctors trusted no one. However, the situation was controlled by Jeff Lozon who was the COO and theCFO for the company controlled things and made a plan to reduce the debt and in fact pay it off. Along with this, he also made the trust revive amongst the shareholder, management, Sisters and the doctors.

Problem Statement

In 1997, The Health Services Restructuring Commission (HSRC) issued a report where the commission recommended Wellesley Hospital was suggested to relinquish all its services, programs and the building ofthe St. Michael Hospital. The decision to merge the two entities was taken rather negatively by the Board of Wellesley because they felt it was takeover rather than merger because the independence of Wellesley was being hampered with the decision. This created anger and distress among the staff and the CEO of Wellesley resigned while the Chair also resigned from their posts and joined different companies.


The board Chair, Dan Sullivan has to identify the clear terms and conditions which will make the selection of board members from Wellesley to add into the SMH board. Dan Sullivan has to take four board members from Wellesley and 2 medical directors from Wellesley. This decision has to be based on detailed understanding of the requirements for the particular post without being biased with the decision making. It is therefore necessary to select individuals who can serve the needs in a better way because the members will have to effectively build the merged organizations together in a better way in the future.

Determine the potential directors

First of all, SMH needs to identify those individuals in the hierarchy of Wellesley who are the helm of things in the hospital. They should be individuals who are aligned with the mission of the organization. Along with this, they have the complete knowledge of the customers or the patients at the hospital. They should be individuals who have already served as members of the Board at Wellesley so that they can immediately join the same post after the merger with SMH to avoid delays.

Service Professionals

Once the potential directors are identified who can come over to join the team of directors at St. Michael hospitals, the next step for the board of Chair is to select those individuals who are service professionals. Basically service professionals are the individuals who have command over attorneys and accounts that can bring in the diversityof the committee. The board of directors are people who sometimes have to review the financial statement results, agreement and contracts. If the individual is an accountant and attorney who can provide insight and the suggestions that can help the management of the St. Michael Hospital to make decisions and assist the management.

Evaluate Individuals

Once the potential candidates are interviewed and identified by the committee, the board Chair, Dan Sullivan should evaluate each individual on merit. Over here, he has to make a decision that can best suit both the organizations which will be involved in the merger that is SMH and the Wellesley Central Hospital. He should conduct one on one meeting with the potential candidates and understand their minds with the vision they possess moving forward with the idea of the merger between two hospitals.

Eventually, it is important for Sullivan to make them speak and share their views and ideas about the merger and then generate a decision which should be solely based on the needs and wants of the specific individual who can serve as the board of members at the St. Michael Hospital. The selection of the right candidate is the most important aspect of this merger because as the case states, SMH faced the issue of leadership where the shareholders were not trusting the company because of certain issues and lack of vision by the management. Therefore, to overcome this issue Sullivan needs to make unbiased decisions where the Board of director has to be strong, effective and a well-balanced representative of the committee.................

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