Increasing media stories describing conflicts arising from
“angel” and similar types of startup investments take
on more relevance as health systems add sophisticated investors to
their various system governing boards, and those
investors/directors pursue broadly diverse direct and indirect
investment portfolios. This has the potential for both conflicts of
interest and appropriation of corporate opportunity issues.
Two governance issues are in play here, and they are not easily
reconciled. One is the recognized need for health systems to
recruit as board members individuals who are financially
sophisticated, to help assure effective oversight and decision
making with respect to financial matters. This is especially the
case with respect to service on board investment committees, as
many large health systems maintain suitably sophisticated and broad
based portfolios that reflect a diverse investment philosophy.
Financially sophisticated directors provide an enormous
