Health Service Focus

In the boardroom

NHE speaks to the author of a report critical of the way many NHS trust boards are operating at the moment, Louise Thomson, the head of policy for the not for profit sector at The Institute of Chartered Secretaries and Administrators – the acknowledged experts on corporate governance.

A hard-hitting report detailing the ways in which too many trust boards are neglecting strategic issues and failing to perform effectively, called ‘Mapping the Gap’, has now been followed up with detailed guidance aimed at members of NHS boards.

The advice and recommendations are specific, including, for example, a specimen schedule of matters reserved for a PCT cluster board, a specimen code of conduct for NHS foundation trust governors, and a model conflicts of interest policy for clinical commissioning group board members.

The original report, Mapping the Gap, and this follow-up guidance, was the work of Louise Thomson, the head of policy for the not for profit sector at ICSA, the Institute of Chartered Secretaries and Administrators, a leading authority on corporate governance.

She undertook a vast amount of work for the original report, analysing 1,277 board agendas, attending 20 open and closed board meetings, interviewed board members and received 176 responses to an online questionnaire, focusing on four key areas of board responsibility – strategy, decision-making, clinical and quality matters, and probity and transparency.

Decisions, strategy and vision

At the heart of the ICSA report, released in summer 2011, was the finding that board members usually understood the theory of good governance, but in practice, what goes on at board meetings is often less than perfect.

Thomson’s analysis found that strategic issues accounted for only around 10% of agenda items – instead of the 60% suggested by best practice – while just 1 in 20 boards clearly aligned their clinical/ quality and strategic objectives. Far too many agenda items, Thomson found, were for the board to just ‘note’ or ‘discuss’ – rather than make a decision about.

She told NHE that her findings “would suggest that some strategic decisions are being made elsewhere, and not being discussed at the board table, which is where they should be discussed”.

She added: “If they are being made in the board meetings, then they’re not being recorded appropriately, which raises its own issues about probity and transparency and accountability.”

The report acknowledges that some of these issues around decision-making, focusing on strategy, and the overall quality of debate, are hardly unique to the NHS.

Thomson added: “Some of those issues cut across all sectors, and some were identified in the banking crisis and the Walker review. Some of them are quite evident in the not-for-profit sector generally.

“But the problem unique to the NHS is that they have such a huge raft of requirements that they have to meet and report on. That impacts to a greater degree on the extent to which they can make decisions and focus on strategy. I would say they’re hindered to a degree, compared to other organisations, because they don’t necessarily have the same amount of freedom to set their strategy and report on certain things.”

The best information

Thomson’s research found that the reports that go to board members are not always of a high enough quality, and that responsibility for this has to be shared.

“There is responsibility for that among board members themselves, the trust secretary has an important role, plus the chairman and chief executive also have responsibility.

“It’s not unusual for hospitals and trusts to have pre-meetings between the chairman, chief executive and trust secretary just to go through the agenda and look at the reports before they’re sent onto the full board.

“So they should be looking at the quality of the information that’s being presented, whether it’s clear what the board is being asked to decide on or discuss.”

Accountability

The Mapping the Gap report notes a degree of territoriality at board meetings, with executive directors too narrowly focused on their own directorate, rather than the corporate and strategic issues of the trust as a whole, while non-executive directors were sometimes unwilling to be challenging enough, being generally more comfortable asking questions regarding the patient experience than financial or operational performance, for example.

In the report, Thomson commented: “For example, a London PCT with a substantial deficit did not raise questions as to how the situation would be arrested and resolved. In another instance, the information that a foundation trust was non-compliant with its terms of authorisation resulted in the board being asked to note the risks.”

She told NHE: “There’s a degree of ongoing training required for all directors. For many of them, for executive directors especially, there needs to be a better understanding of what it means to be a member of the board. With the boards I observed, there’s a concern that some executive directors were too narrowly focused on their directorate, rather than actually being a board member, dealing with the issues that the trust as a whole faces. Non-executive directors need to achieve the balance between being representative of their members, if they’re a foundation trust, but not representing their constituency. They’re there to be non-executive directors and take a more holistic view of what the trust is doing, not just from the point of view of a particular patient group or membership body.”

The report also contains specific guidance on behaviour issues, with advice for board members on what is and is not appropriate and useful before and during meetings – from non-verbal gestures to mobile devices.

Theory and reality

In their answers to questionnaires, many board members clearly felt their meetings dealt well with strategic issues, or clinical/ quality issues, while Thomson’s analysis of the agendas themselves suggested this was rarely the case.

“When you actually analyse the agendas of the trusts, there isn’t really that much that looks at clinical and quality issues, certainly not the 20% recommended by best practice. You could argue that if they’re talking about a specific performancerelated management line, that they’re taking the finance, performance, clinical/ quality issues all in one go – but I think you have to be there at the discussion to discover whether they really are discussing the ‘quality’ angle.”

Asked if the boards generally contained the right people, or if some needed a wider shake-up, Thomson said: “There are those who perform well, and those who don’t perform quite so well, both non-executive and executive directors. That’s a charge that can be levelled at other organisations and types of boards as well.”

The debate about open vs closed meetings is now effectively “obsolete”, Thomson said, because of the provisions in the Health & Social Care Bill – which was close to becoming law as NHE went to press.

“All trusts are going to have to have open board meetings. The impetus now should be making them relevant, real and meaningful, and that’s a challenge. Done well, they can be good things; done badly, they just come across as being stage managed and rehearsed.

“There’s a nervousness, understandably; board members don’t want something to come out that might be a slight problem that’s then whipped up into something that is more than it is.

“But for those people who go and attend these meetings, both press and the public, they really appreciate some honesty, along the lines of, ‘this was a problem, this is what we did to rectify it, these are the lessons learnt’. I think people can forgive mistakes, as long as lessons are learned and they’re not made again.”

CCGs’ ‘inherent conflict of interest’

When it was published last summer, the Mapping the Gap report was blunt about the governance shortfalls in the proposals for clinical commissioning groups (CCGs): “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 neutralise public perceptions of conflicts of loyalty in commissioning decisions.”

The debate and amendments since then have not reassured ICSA, Thomson said.

“One of the guidance notes is a model conflicts of interest policy for CCGs, and it’s still a work in progress, because the governance arrangements around CCGs are still unclear. ICSA and other professional bodies with an interest in making sure there is accountability and transparency, and that we avoid conflicts of interest in those situations for the public benefit, still have to keep monitoring the situation and revising our guidance so that it is the best it can be. But I think there is still some way to go on working out the governance arrangements for CCGs, because they’re not good enough yet.”

Counter-argument

Feedback on the report, Thomson suggested, has included some board members insisting that they do discuss strategic issues more than her report would suggest – just not in open meetings.

Thomson took that on board, but told NHE that having analysed so many board papers, she remained unconvinced that there was enough decision-making on strategic issues taking place.

The original report made eight main recommendations, including around better training, and the new guidance and specimen codes should also help.

Thomson said the provisions of the NHS reforms will also have an inevitable effect, especially the vastly enhanced role that governors will play at foundation trusts.

She concludes: “They’re going to have a potentially very powerful role, and will need new skills and training to be able to hold the board to account effectively. They’ll wield the power of veto over some really big questions that will face trusts in the future.

“To govern effectively they’ll need ongoing extra support, training and information. In turn, trust secretaries will have to work hard to ensure that relationship between the council of governors and boards of directors is fruitful.” 

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