Let’s hang on to good corporate governance

27 May 2016

Whatever might be said of the NHS there is no lack of initiatives designed to bring about change. We have local sustainability and transformation plans, the success regime, new models of care, for some devolution and for the unfortunate few, the failure regime.

On top of all that there is “business as usual”, but “business as usual” really means becoming more effective and efficient, meeting access targets, achieving the right CQC rating and delivering tangibly good services in reality as well as on paper. There are demands on organisations in which provider boards must continue to identify and manage risk, engage staff, bolster morale and run a tight ship – as well as a growing need to look outwardly at how they might collaborate with partners in their local health economy now and in the future. And of course given the pressures the NHS faces, there is an imperative to “just get on with it,” while governance is often seen as “something to sort out later”.

I’m conscious that the above could be taken as an overly negative perspective on concrete efforts to tackle increasingly urgent problems. It is indisputable that much of what is happening involves a real rethink about how services can be designed around the needs of the patient or service user, something that could bring about very tangible change for the better. It is equally indisputable that the status quo is not a sustainable option; change must happen and relatively quickly if we are to avoid a disastrous clash between finance and quality. But just because change is necessary does not mean that it comes without risk. So my intention here is not to talk down the need for change, but rather to identify some of the key risks that we need to take into account.

Deferring often difficult discussions about who will control what and how is at best storing problems for later and at worst setting up problems that become intractable over time. Later is tempting, but it simply won’t do.

Perhaps first on the list of risks is the idea that current NHS legislation represents an insurmountable barrier to change that at best we need to work around, or more ominously, ignore. It should be quite obvious that wishing the law were different does not make it so. In fact those people with legal standing, directors of NHS foundation trusts and trusts for example, can quite quickly find the law coming to bite them if they fail to fulfil their statutory duties. In fact from the perspective of the consumer and the ‘owner in spirit’ of NHS services, the public, that part of NHS legislation that creates NHS foundation trusts and trusts as bodies corporate is a positive benefit because it creates bodies that can be held to account in a way that a system never can be. It is also just not true that these two types of bodies corporate cannot also be multi-speciality providers or accountable care organisations or any of the other forms of organisation currently being explored as new care models. Far from being a barrier to change the body corporate allows for proper, enforceable accountability, but it also allows for proper corporate governance.

Second on my list of risks would be the idea that ‘governance can be sorted out later’. Corporate governance is the means by which organisations are directed and controlled. Deferring often difficult discussions about who will control what and how is at best storing problems for later and at worst setting up problems that become intractable over time. There is never a better time to sort out how the delivery of services will be controlled and directed than at the outset when relationships are likely to be at their best. Later is tempting, but it simply won’t do.

The third on my list of risks is the management of risk itself. New ways of working, in new configurations with a range of partners brings its own unique risks, particularly at the interface between disciplines in addition to those inherent in the provision of a given service. It should go without saying that these risks need to be owned and managed and never allowed to fall between two stools, but the chances of that happening increase with complexity and where there is lack of clarity on who is accountable.

Corporate governance is a tried and tested methodology that when applied with skill has a considerable track record of delivering successful outcomes.

Finally there is a significant risk that the legal duty of care of directors to the communities and individuals they serve will come to be perceived as a barrier rather than a benefit. Without directors there can be no boards and without boards there can be no proper corporate governance. Would that be a disaster? Corporate governance is a tried and tested methodology that when applied with skill has a considerable track record of delivering successful outcomes. It rates far better than any of the alternative means by which the delivery of services can be directed because it allows for robust strategy development, proper accountability of executives and assurance that they are delivering and will continue to deliver. Nor does it stop boards from working collaboratively with others.

There are ways of negotiating the need for change and for working more closely that are compliant with existing legislation and which allow for good corporate governance. They require thought and effort and they will need real collaboration rather than coercion from the centre or institutions hanging on to what they have. Our governance conference this year will examine a range of viable solutions to problems inherent in transformation without legislative change. We hope you will join us there.

See the full programme for the governance conference and book your place.

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