How boards can better prepare for governance challenges

Recent research from the Institute of Chartered Secretaries and Administrators (ICSA) highlighted a number of challenges facing NHS boards endeavouring to make strategic decisions in line with perceived best practice while complying with a range of demands from regulators.

The Mapping the gap research project carried out by ICSA involved the analysis of 1,277 board agendas, 20 board meetings observed and 176 questionnaire responses and interviews with participating board members. The aim of the exercise was to examine the degree to which NHS trust boards understood issues of governance and the extent to which this was reflected in practice.

In summary the exercise highlights some concerning issues:

• there was little discussion relating to a board’s vision for staff and stakeholders;
• on average, 10 per cent of agenda items were dedicated to strategic issues in contrast to best practice recommendations of 60 per cent;
• observed boardroom behaviours evidenced a lack of appropriate challenge;
• boards were more frequently presented with items “to note” than “for decision”;
• clinical and quality issues took up between 4 per cent and 13 per cent of the top five agenda items, depending on the type of trust, in contrast with governance guidance recommending a minimum of 20 per cent;
• 75 per cent of  board agendas included declarations of interest as an item.

The research focused on four key governance areas: strategy, decision-making, clinical and quality matters and probity and transparency:

Strategy

Boards will continue to face the challenge of having to look up to the NHS Commissioning Board for strategic guidance, while balancing public and patient involvement duties when setting future plans. The proposed changes to the NHS framework contained within the Health and Social Care Bill present additional complexity in the way boards are able to determine their organisational strategy and those strategic goals set by external entities.

Decision-making

Effective decision-making necessitates that boardrooms should not always be comfortable places. Environmental and human characteristics need to be in place to facilitate good decision-making. All board members, particularly independent non-executives, have a responsibility to provide robust scrutiny, but all board members should be contributing to the overall strategy of the NHS entity.

Clinical and quality issues

The NHS Commissioning Board will provide a framework for improving quality outcomes. To a degree, these will be agreed with the secretary of state, and other clinical priorities will be established as part of local commissioning plans in liaison with the public, health and wellbeing boards, clinical networks and senates, along with local HealthWatch.

Boards will have to remain alert to the need to balance strategic decisions with performance monitoring and ensure that they focus their limited time on those organisationalmatters that are rightly the preserve of the board, and allow management to implement agreed strategies.

Probity and transparency

The proposed changes to the NHS framework present a number of challenges to foundation trusts and clinical commissioning groups with regards to demonstrating transparency and probity.

Firstly, the make-up of clinical commissioning groups introduces an inherent conflict of interest which is not satisfactorily resolved by the introduction of two lay members, a registered nurse and specialist secondary care doctor. Other robust mechanisms are required in order to neutralisepublic perceptions of conflicts of loyalty in commissioning decisions.

Secondly, with foundation trust governors due to take on enhanced roles from 2016, the Nolan principles need to be applied to them in an equitable and proportionate manner, given their voluntary role. With their increased powers to veto certain proposals and to demand special general meetings to question directors, governors will require training and support to ensure they perform their duties in accordance with established principles of probity and transparency.

Trust boards are the governing bodies of the NHS and are the primary vehicle by which government policy is translated into local action for the benefit of NHS stakeholders. By aligning its decision-making processes and strategic objectives, a trust is far more likely to succeed in delivering to expectations.  

To address some of the concerns between perceived best practice and reality, ICSA has developed a number of guidance notes for NHS entities to adapt and implement. The full list of guidance includes model templates for board reports, a specimen strategic board agenda, meeting etiquette procedures and more detailed codes of conduct.

The objective of the guidance is to provide NHS boards with the tools to develop governance arrangements, including establishing the most appropriate environment for making decisions, so that board time is focused, strategic, effective and efficient. Adopting codes of governance and policies for managing conflicts of interest enables boards to make decisions in a manner that is consistent with the values of the organisation, transparent and accountable. Developing and adopting agreed behaviours within the board environment also the tone for an organisation and demonstrates that all board members are focused on making the best decisions for the trust, patients, staff and other stakeholders.

Furthermore, all boards should seek to develop the skills of their members in order to fulfiltheir legal responsibilities, meet the challenges of receiving relevant and accurate information, being assured not just by the documents received but by the processes used to acquire that information. A thorough induction and programme of ongoing development for executive directors, non-executive directors, governors and lay-people are essential for enabling boards to make the most informed decisions on behalf of the organisation and its wider stakeholders.

In demonstrating the gap between the theory and reality of board practice in the NHS, the findings from ICSA’s research have implications for the way in which the NHS is currently governed, and for the design of governance systems emerging from the Health and Social Care Bill. NHS entities should regularly review their governance arrangements to ensure they are fit for purpose and meet the varied demands of all stakeholders; looking at guidance from other sectors and adapting it to suit an individual organisation is one way that governance arrangements can remain current, proportionate and effective.

Find out more

• The full findings of the research can be found here
• Download the guidance