The question "what is best practice?" about the maximum number of terms governors should serve is one that we are asked quite frequently. There is nothing in statute that limits the number of consecutive terms a governor can remain on the council, but that does not mean that it is best or even good practice to allow governors to remain governors for an indeterminate number of terms.
Typically foundation trusts have been guided by the foundation trust code of governance provisions in respect of non-executive directors (NEDs), because, rather unhelpfully, the code does not address the number of governor terms. The relevant paragraph states:
Any term beyond six years (e.g. two three-year terms) for a non-executive director should be subject to particularly rigorous review.
"Any term beyond six years (e.g. two three-year terms) for a non-executive director should be subject to particularly rigorous review and should take into account the need for progressive refreshing of the board. Non-executive directors may, in exceptional circumstances, serve longer than six years (e.g. two three-year terms following authorisation of the NHS foundation trust) but this should be subject to annual re-appointment. Serving more than six years could be relevant to the determination of a non-executive’s independence."
This makes absolute sense for NEDs because their independence is essential to ensuring good corporate governance. It is an accepted truth that NEDs tend to take a less independent perspective over time as they develop closer working relationships with executive directors. This in turn can make it more difficult for the board to challenge effectively and properly to oversee the work of the executive.
If governors are too distant from the public, they will find it hard to come together as a council to represent the public’s interest to the board.
Specialist advisor (Governance)
But is the same true of governors? To obtain a sense of direction we need to look at two of the council of governors key statutory duties: the duty to represent the interests of members and of the public and the duty to ensure that the board is answerable for its performance via the NEDs. Both of these duties require an outside perspective and a degree of independence. If governors are too distant from the public, they will find it hard to come together as a council to represent the public’s interest to the board.
We would argue that the ability to understand the public perspective diminishes over time as governors identify more closely with the board and less closely with the public. And if governors are too close to the board, they will find the process of holding to account very difficult, particularly if that involves some tough conversations about things that are not progressing well. A degree of distance and objectivity that is not influenced by relationships important. So for governors like their NED colleagues, independence is vital and while there is nothing specific in the code of governance it is both good sense and good practice for trusts to seek to refresh their council membership from time to time by limiting the number of consecutive terms governors can serve.
For NEDs, the code specifies two three-year terms. This is a reduction from three terms in previous iterations of the code and is a reflection of the fact that NEDs have frequent contact with the trust and can, in some cases, lose independence relatively quickly. Governors have less contact time with the trust and are therefore likely to take longer before they become more of a friend than a critical friend. However most NEDs come onto boards as people with experience of operating at a very senior level and even if they don’t have non-executive experience, they very often have executive board level experience.
Governors are often starting from scratch and many governors report that it takes most of their first term just to learn the role.
Specialist advisor (Governance)
If NEDs need induction and to go through an intense learning process on joining the board of an NHS foundation trust, governors are often starting from scratch and many governors report that it takes most of their first term just to learn the role. In an ideal world this would not be the case and the tenure of governors would match the tenure of NEDs and be limited to two terms, but we must accept the reality of the need to learn the governor role from scratch. So perhaps for governors two terms is not long enough, but for governors to remain for longer than three terms is to invite potential problems in terms of independence and objectivity.
The governor role is not similar to the role of directors and is not one of leadership and direction, but rather of representativeness and holding to account. There are no commensurate benefits to governors having additional experience over and above that which they acquire early in their tenure, which outweighs the potential loss of objectivity and independence that time in the role is bound to bring. So we would contend that limiting the number of consecutive terms governors can remain in place to three makes absolute sense and constitutes good governance practice. Trusts might wish to allow former governors to return after a period of time, but there should probably be a gap of at least one three-year term.
Foundation trusts are permitted to make adjustments to their constitutions to limit governor terms under paragraph 8(2) of schedule 7 of the National Health Service Act 2006 as amended by the Health and Social Care Act 2012. Such changes require the approval of both the board and the council and take effect immediately on the approval but need to be ratified by the next annual member’s meeting to continue to be in force. We recommend that foundation trusts consider making this move.
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