THE board of the VHI meets today, with much to occupy its members. The organisation must quickly find a new chief executive and does not appear to have a coherent strategy for future development.

In a couple of months it faces competition for the first time from the giant British insurer BUPA. It is still engaged in damaging rows with many of the health providers, such as the private hospitals. And its finances need to be improved without resorting to regular hefty premium increases ahead of the rate of inflation.

Finding a new chief executive to tackle these problems may be no easy task. Potential candidates will be wary. Over the past two and a half years the previous two chief executives have resigned. Mr Tom Ryan left after arguing with the chairman, Mr Noel Hanlon, about his role, while just over a week ago Mr Brian Duncan departed after a series of disagreements with the board. These disputes have absorbed much of the organisation's time, divided its management and left it without a coherent strategy.

Apportioning blame for this state of affairs is not easy, and is possibly not very useful at this stage. Whatever the arguments of both sides, it is clear that the normal relationships between the board and management necessary for the running of any company completely broke down. Now the guard is changing. Mr Duncan has left and Mr Hanlon's current term will finish next February. It is up to the remaining members of the board to chart a course for the future.

The issues which the board must face come under two broad headings. One is internal management structures and the other is strategy. If the first of these is not addressed, then whatever new strategies are developed will not be properly implemented.

The first job is to pick a new chief executive. At this stage it appears most likely that someone from outside the organisation will be recruited.

One likely option could be the recruitment of a consultant as acting chief executive on a short term contract for one to two years. This would allow a quick appointment and would mean the consultant and the board could start work on charting future strategies for the organisation.

The strategic questions facing the board and management are not easy ones. It needs to develop new products, particularly to attract a younger subscriber base. And it needs to find a better way of doing business with health providers such as consultants and private hospitals. Here some of the onus for change also rests with the health providers and, indeed, with the Minister.

A key issue is the need to balance the price of new medical technology against costs to VHI subscribers. Getting a better balance between premiums and claims would help to address the company's poor underwriting performance - its underwriting loss was £15 million last year - and put it on a sounder financial footing.

Time is short to address these issues and like a number of state company boards in recent years, the members of the VHI find themselves under pressure to push through change. Time was when membership of a state board was seen as a cushy number. But not any more.