Carillion, Enron, Arthur Anderson, Lehman Brothers…organisational failures that demonstrate the importance of board governance. Though not always a glamorous topic, good governance is essential in helping boards steer their organisations safely, identify and manage risk, and hold executive management teams to account.
A key component of good governance is pin point clarity on who is accountable for what. In the NHS, both the Francis reports into Mid Staffordshire and the more recent Kirkup review into Liverpool Community point unerringly to the accountability of the trust board for the failings in the quality of care within those organisations. Rightly so, because one of the key features of NHS governance is the pin point clarity that trust boards are accountable for everything that happens within their trust.
One of the key features of NHS governance is the pin point clarity that trust boards are accountable for everything that happens within their trust.
But both reports also point to another failure – in the system overseeing trusts. Who was responsible for identifying that the trust board was failing and intervening appropriately? Here, it is deeply instructive that the reports are unable to determine who was accountable. The Kirkup report, for example, identifies the following potential players, their number inflated by the NHS structural changes of the time – the Primary Care Trust, Clinical Commissioning Group, Strategic Health Authority, Monitor, Trust Development Authority, NHS Improvement, NHS England and Care Quality Commission. Little wonder that the report describes this framework, then and now, as “complex” and with “too many players on the pitch”. So much for pinpoint clarity.
The importance of clarity on who is accountable for what, is the key lesson we must bear in mind as we start to develop governance and accountability mechanisms for local health and care systems - mechanisms that could blur current, trust board, accountability.
The importance of clarity on who is accountable for what, is the key lesson we must bear in mind as we start to develop governance and accountability mechanisms for local health and care systems.
Trust level accountability
Given the inherent risk in delivering healthcare, NHS trusts and foundation trusts rightly invest a huge amount of time and effort in ensuring their boards function effectively. This means that trusts have well developed board committee and clinical governance structures that provide detailed ‘Ward to Board’ scrutiny and assurance.
Given the inherent risk in delivering healthcare, NHS trusts and foundation trusts rightly invest a huge amount of time and effort in ensuring their boards function effectively.
Unlike other partners in the health and care system, trusts also operate a unitary board, where non-executive directors (NEDs) are a majority and therefore have a veto on decision making. NEDs play a crucial role. They are appointed because they have the right skills and expertise to be directors of large and complex organisations and to bring an unbiased and independent perspective to the boardroom.
In common with their executive colleagues, they have legal duties to exercise independent judgment as a director and to bring their skills and diligence to bear in carrying out their role. The presence of this constructive challenge should not be underestimated. In particular, it enables boards to identify and manage new strategic risk more effectively, something that is vitally important in today’s environment. NEDs are not there because they have the right job title or local social standing, as some would claim, but because they are a vital component of an effective governance infrastructure.
It’s also right that the quality of trust Board governance is a priority area of focus for the regulators. CQC and NHSI measure the quality of Board governance through their joint ‘well-led assessment’ and also require trusts to undertake internal and external governance reviews to ensure that risk is being properly managed within the organisation in line with the NHS Code of Governance. All this is underpinned by the 2012 Health and Social Care Act and other legislation in which the role and accountability of trust boards is clearly set out.
Moving to local system working
It is therefore frustrating to be described as “pedantic”, “overly legalistic” or “using governance concerns to block much needed change” when we raise concerns over losing the pin point clarity on the role of trust boards as we move to local health and care system working.
We all support the need for local system working to deliver integrated patient care, and recognise that Sustainability and Transformation Partnerships (STPs) and Integrated Care Systems (ICSs) are some of the vehicles to do this. And, yes, there might be some who want to use governance issues to slow down or resist this move. But that doesn’t eliminate the need to properly and fully think through how STP and ICS governance structures sit alongside the legal duties of trust directors and boards.
Lots of good work is going on to develop new forms of local system governance as STPs and ICSs evolve, but we must ensure these are clear on accountability.
Lots of good work is going on to develop new forms of local system governance as STPs and ICSs evolve, but we must ensure these are clear on accountability – who is accountable for delivery and decision making and who they are accountable to. This must also include robust testing of accountability if a risk materialises – such as a serious untoward incident in a joint venture, missing a system control total or not meeting a system performance target.
The role of non-executives will also be crucial as these structures develop. It will be a cultural and technical challenge to bring together the different approaches used by other parts of the system such as CCG lay members and democratically elected councillors. And local system governance must unambiguously sit within the existing legal framework, which will be difficult unless we have legislative change.
Good governance means that decisions are subject to rigorous challenge and that risks are properly identified and mitigated. We must therefore exercise due care and attention if we start to blur the bedrock principle of trust boards being ultimately responsible for taking decisions about the delivery of care within their organisation.
The NHS Providers’ Governance Conference is committed to improving governance and board performance. This year’s conference focuses on working in new partnerships and takes place in Westminster on 18 July 2018.