The Critical Role of Effective Governance in Credit Analysis - McDermott Will & Emery

The Critical Role of Effective Governance in Credit Analysis

| |


The effectiveness of corporate governance has long been an important element in the health system credit rating process. Leading credit rating agencies routinely perform a close assessment, looking at specific attributes of health system governance as part of their broader credit analyses—examinations that increasingly include an evaluation of environmental, social and governance (ESG) and other non-financial factors. The goal? Helping investors evaluate governance issues on a consistent basis.

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

To highlight the important connections between financial risk management, the credit rating process and effective governance, Michael Peregrine welcomes Lisa Goldstein, Senior Vice President at Kauffman Hall and a nationally recognized analyst, speaker, writer and expert on nonprofit healthcare, for a conversation exploring:

  • The responsibilities of a strong finance committee
  • The value of subject matter expertise within the finance committee
  • Key metrics that rating agencies use to evaluate governance
  • Insights from high-performing healthcare system boards
  • The role of covenant management in repayment performance
  • Lessons learned from the pandemic, including credit-related crisis management
  • ESG issues for nonprofit healthcare