In the current challenging environment, the hope of change for the better acts as a point of focus, sometimes to the exclusion of other considerations. For many organisations the status quo is not a viable option and they are drawn to the prospect of change. At the same time the evidence suggests that organisational change will be necessary to deliver services designed to meet the changing needs of patients and service users in the medium term. So the buzz of discussions on new care models, organisational forms and regional devolution of healthcare budgets is both welcome and understandable. But in looking to change it is important not to forget some of the fundamentals.

What matters is whether organisations are resonsible for their own corporate governance or not and how well they demonstrate their accountability to those who depend on their services

However healthcare is delivered, it will be delivered by organisations in some form. Unless the leaders of those organisations are prepared to take on unlimited personal liability, which should be unlikely, those organisations will have some sort of legal form that limits the liability of its directors. The current legal forms for secondary care NHS organisations are NHS trusts and public benefit corporations, otherwise known as NHS foundation trusts. These are complemented by joint ventures and wholly owned companies, typically taking the form of companies limited by guarantee or companies limited by membership. Often foundation trusts are described as an organisational model, but they are in fact nothing of the sort, they are a legal form.

So what does it take to be a public benefit corporation? At its most basic a public benefit corporation or foundation trust must have members, it must have a council of governors responsible for representing the interests of the public and for holding the board to account via the non-executive directors and it must have a unitary board of directors with whom the power lies to control and direct the organisation. For clarity a unitary board of directors is a board made up or executive and non-executive directors with a collective responsibility for effective corporate governance of the organisation. There are a few procedural and reporting requirements but basically that is it. Everything else about foundation trusts is a matter of choice; either exercised by the foundation trust board itself or more often by the regulators. The alleged inflexibility of ‘the foundation trust model’ is in fact a common misapprehension. Just like a PLC or a company limited by guarantee, it is as flexible as its leaders, its commissioners and its regulators want it to be.

This should be the time when the foundation trust as a legal form comes into its own

But if foundation trusts are just another legal form, then what are the issues at stake? I think what really matters is whether organisations are responsible for their own corporate governance or not and how well they demonstrate their accountability to those who depend on their services. For the sake of clarity, by corporate governance I mean the ability of unitary boards of directors to set strategy; to control the organisation by supervising the work of the executive; to set organisational culture and to do all of that in a way that allows the organisation to be held to properly to account. This is a binary state of being; organisations are either responsible for their own corporate governance and the autonomy that is implicit in that, or they are not – shades of grey fall into the second category of an organisation not being responsible for its own governance.

Most people probably don’t spend much time thinking about why it is important that organisations are led by a unitary board or why it is important that they are responsible for and able to deliver their own corporate governance, but it is worth considering from time to time. The unitary board is a tried, tested and for the most part successful means of delivering good corporate governance. Good corporate governance provides a solid platform (but not a guarantee) for organisational success. It provides the right tools to lead and direct organisations and, crucially, it is very clear who is responsible and answerable for quality and performance: the buck stops with the board.

Conversely where organisations are not responsible for their own corporate governance there is increased potential for a lack of clarity. An executive team potentially being pulled one way by the board and another by an external performance manager doesn’t, in reality have its work properly supervised by anyone. Just as importantly, where organisations are subject to external, legally enforceable performance management, their performance manager is at least partly accountable for the outcomes achieved, whether they accept that accountability or not. Performance management comes with its own problems. At best it delivers little other than compliance with a set of targets that may or may not have local resonance. At its worst it skews the allocation of resources, hampers the effective governance of an organisation and puts in place a system where the buck stops nowhere and no one is properly accountable if things go wrong.

So as we move into new organisational forms, I would argue that the need for good corporate governance remains central. If we want a solid platform for success we should insist on a strong system of governance based on the tried and tested model of the unitary board responsible for the leadership, control and culture of the organisation and accountable for the outcomes it delivers. If we want that organisation to be responsive to the people who use its services and embedded in the communities it serves we would want to build in some sort of local accountability relationship. In short we would wish to construct something that looks very much like a foundation trust.

It is hard to envisage new models of care being delivered effectively without the leadership provided by good boards and without good governance. But sound governance between organisations will also be essential. Organisations that have already put their own house in order and are delivering good governance are far more likely to be able to also deliver good governance between organisations than their peers. Organisations that are autonomous are best placed to be sufficiently fleet of foot to adapt and change as circumstances change. So rather than requiring a new legal form the NHS Five year forward view cries out for the proper mobilisation of a tried and tested legal form to deliver effective change within and between organisations.

That is not to say that that the foundation trust model has been implemented flawlessly. As a sector we’re on a journey in continually strengthening local accountability including engaging most effectively with governors and to support governors in engaging with the local community. There are many good reasons why the board/governor/member/public line of accountability is not as well developed as it might be. But we should not allow scope for further development of local accountabilities to be an indictment of the legal form or a reason to take a retrogressive step to central command and control.

There are also lessons to be learned from local government although we should not assume that councils should be the only means of engagement for local communities, or that they are skilled or equipped to adopt a greater role in commissioning or being locally accountable for healthcare services. One lesson we can learn though, is not to be your own worst critic. Whenever there is a crisis in local government, and there have been many over the years, we never hear local authority leaderships castigating the model or speculating that local democracy has run its course despite relatively low voter turnouts. Rather, they rally together to put their house in order and carry on the stronger for it. Perhaps the NHS provider sector can do the same.

This should be the time when the foundation trust as a legal form comes into its own, because like the company limited by guarantee it is an all purpose, all terrain vehicle. While no legal form guarantees good governance – only conscientious boards can do that – the foundation trust legal form allows for the probability of good governance. We should support it.