Trouble at the top - will the updated FPPR guidance fix this?

Headlines highlighting concerns about the difficulties faced by NHS trusts in relation to staff and retention of executives, is not an uncommon occurrence.

This issue has been under the spotlight recently as a result of failings at Liverpool Community Health Trust and how the NHS Trust Development Authority, (now part of NHS Improvement) had arranged a move of the trust’s former chief executive to another provider without informing its leaders of the shortcomings at Liverpool.

As a result of this ongoing problem, there have been calls to toughen the Fitness of Proper Persons test for the appointment of directors in order to prevent people who are unfit for the role from taking up directors’ posts.

The Care Quality Commission has updated its guidance on the fit and proper persons requirement for directors, to reflect the changes outlined in its ”next phase of regulation” consultation. The consultation acknowledged that there was a need for further guidance on some of the definitions contained within the FPPR, in particular, what is meant by serious misconduct and serious mismanagement.

The CQC may review whether a provider has carried out appropriate checks on executives and whether appropriate ongoing performance reviews had been undertaken – this may involve checking personnel files and appraisal documentation

The updated guidance states that examples of “misconduct” may occur when an executive breaches a legal or contractual obligation imposed upon them; it could range from an executive acting in breach of an employment contract or may occur where an executive breaches any regulatory requirements such as not adhering to mandatory health and safety rules.

It is for the provider to determine whether misconduct has taken place. However, when the CQC consider whether Regulation 5 has been breached by a provider, it will make a judgement as to whether the provider acted reasonably when it made its determination.

The CQC may do this by reviewing whether a provider has carried out appropriate checks on executives and whether appropriate ongoing performance reviews had been undertaken – this may involve checking personnel files and appraisal documentation.

Mismanagement

The updated guidance in relation to the FPPR test states that “mismanagement” may occur where an individual is responsible for the management of an organisation or part of an organisation and where the decisions and actions of the individual falls below “any reasonable standard of competent management.”

Within the guidance, the CQC outlines some examples of behaviour that may fall within the definition of mismanagement, such as:

• Providing inaccurate information to a public authority without taking reasonable steps to ensure it was correct.
• Not sharing reports where appropriate, where findings may adversely affect the organisation
• Not having effective processes in place to protect staff members who have raised concerns about the organisation
• A failure to learn from accidents/incidents and for when things go wrong in the organisation.
• Failing to implement quality, safety and/or process improvements in a timely way, for example where CQC have given recommendations or where the need is apparent.

An isolated incident is unlikely to constitute serious mismanagement, but an incident may be construed as a serious mismanagement issue if it calls into question the confidence of the organisation and public, in the individual concerned.

The examples set out above demonstrates that Regulation 5 has a wider impact in scope and application, than it previously did in terms of determining whether an executive may be deemed unfit within the terms of the FPPR test.

It is evident that the CQC wants more accountability from providers in appointing executives/directors, and for providers to have proper systems and processes in place when appointing executives as well as ensuring that there is ongoing performance monitoring.

On the face of it, it does seem like the FPPR test is fit for purpose and that the test would be able to prevent people who are unfit for the role from taking up executive posts. However, it seems that the issue is not about whether the test is fit for purpose, but whether the test is applied appropriately.

To be compliant with the requirements of Regulation 5, providers must ensure that they:

• Provide for appropriate checks not only on recruitment of new directors but also demonstrate ongoing performance reviews for existing executives.
• Ensure that there are systems in place to ensure that executives have oversight of the organisation; for example, through board meetings and other forms of information sharing.
• Review relevant policies and procedures in respect of assessing the “fitness” of executives to ensure the documents cover the requirements within Regulation 5.
• Have information and records readily available for CQC.
• Have relevant systems and procedures in place to demonstrate that there are systems in place to carry out investigations, should new information materialise which calls the “fitness” of executives into question.