The delivery of high-quality healthcare involves uncertainty of outcome – that is, risk. Though we must accept that board governance is not infallible, unitary boards are well placed to deal with risk because they can ensure that risk is properly controlled as part of the decision-making process, they bring together NEDs and executives in a way that maximises the potential for constructive but rigorous challenge, and they facilitate the application of good practice rather than promoting unthinking compliance.
The relevant code for NHS provider organisations is Monitor’s NHS foundation trust code of governance (The NHS foundation trust Code of Governance, 2014). In common with the UK code, it recognises the singular role of boards of directors in providing coherent leadership and direction and sets out the same role for boards of NHS organisations as that of their private sector counterparts. The current Foundation Trusts Code was based on an earlier iteration of the UK Corporate Governance Code and is in the process of being revised in line the 2018 iteration of the UK Code, but taking account of system working and the need for the code to cover NHS trusts as well as foundation trusts. They stand for the best interests of the 'owners' of the organisation: the public.
One of the less controversial aspects of the Health and Social Care Act 2012 was to codify for the first time the role of foundation trust boards of directors: "The general duty of the board of directors, and of each director individually, is to act with a view to promoting the success of the corporation so as to maximise the benefits for the members of the corporation as a whole and for the public" (Health and Social Care Act, 2012). There is a read across from Paragraph 1 of Section 172 of the Companies Act 2006. The way in which NHS provider boards exercise this duty, once again like their private sector counterparts, is through corporate governance - a methodology put into action, not a set of rules, procedures or committee structures.
It is worth reiterating that corporate governance is what boards of directors do: setting the strategy of their organisation, supervising the work of the executive, setting and exemplifying corporate culture and being accountable to stakeholders. Research by Professor Andrew Kakabadse of Henley Business School – covering the public, private and third sectors in 14 countries – stresses need for boards to be driven by evidence rather than attempting to duplicate what they have done previously when they engage with their key stakeholders: "Good leaders create value and deliver success through evidence-led stakeholder engagement. They build the commitment and passion which delivers value through real evidence rather than neat consultant-generated strategies, or distant dreams. In these successful organisations, evidence is not an aberration, but the result of hard work, persistence and structure" (Andrew Kakabadse, April 2015). Implicit in this is the need to understand local conditions and build solid evidence based on knowing the organisation and those it serves – something that cannot be done remotely.