10 June 2022 - Non-executive directors - NHSE consultations on key governance guidance

This week’s discussion was led by GGI CEO Andrew Corbett-Nolan, who focused on the two new guidance documents from NHS England: Draft Guidance on good governance and collaboration and Draft Code of governance for NHS provider trusts.

He said discussion would return to the third significant document published last week, the Messenger Review, which he said was the best document of the three but nevertheless contained nothing new: “It could have been written three years ago – but is interesting for that. It emphasises the same leadership behaviours and challenges that are very apparent and it’s good to have them restated.”

Returning to the two guidance documents, Andrew said: “They help us start to unpick the direction of travel about how to behave and structure our contribution in a more complex system orientated environment. There is lots in these documents that will take weeks to unpick. But both will form part of the system oversight framework.”

Code of Governance

Andrew said the new code of governance contained: "a strong thread that goes all the way back to the foundation trusts. In a way it’s a bowdlerisation of codes of governance from The City with the principles of the unitary board. The 2006 Act had City very much in mind when it created governors.

“You could say there’s nothing new here – old wine in new bottles – or you could say it’s full steam ahead. It emphasises classic corporate governance.”

He added: “It emphasises role of chair and non-execs to a degree that I’m not comfortable with. For example, one of the stipulations in the document is that executive directors will be appointed by a committee comprising chair, non-execs and the chief executive. I would prefer it to be decided by the chief executive with the involvement and agreement of non-exec board.”

One surprise in the document for Andrew was its emphasis on governors. He said: “The word governor is mentioned 255 times in the document. In a number of places it makes it clear that governors need to be of the skill to be able to carry out their governor duties. I believe it extends the role of governors a bit – makes them more pivotal to how the governance of a trust is constituted. The work we do with governors might be skewed towards organisations that have issues with governors but there’s going to have to be a lot of attention to recruiting and developing governors if you’re not going to roll back from the position they have now. Governors can be great – but governors can be governors too.”

Turning to board composition, Andrew said: “For the first time, there are targets set on the ethnic composition of the board mirroring the ethnic composition of the area – or of the staff, whichever is the greater. It sets a tone around board composition too. It emphasises the challenge and assurance role non-execs, but it’s muted on their role in the development and agreement of strategy.”

Perhaps most significantly, the guidance emphasises a tone of collaboration and compromise. Andrew said: “We’ll need to move beyond a mindset that intuitively promotes the primacy of your own organisation’s performance, regulator rating and financial health. This seeks to dismantle that to a system-first approach.”

Good governance and collaboration

Turning briefly to the second document, Andrew said: “It’s the first time I’ve seen expected behaviours in a code of governance – it lays out the things it will judge and will probably put into the system oversight framework about being collaborative and compromising. And remember, compromising means that you sometimes don’t act in your own best interests – you act in the best interests of others.”

The guidance sets out expectations of providers in respect of three key areas: engaging consistently in shared planning and decision-making, consistently taking collective responsibility with partners for delivery of services, and for delivery of agreed system improvements and decisions. It also offers five characteristics of governance arrangements providers should have in place to support collaboration.

Andrew said: “Trusts will need to think about this in terms of how they organise work programmes for the board, what committees are looking at, what assurances they’re giving for delivery of a system focus. Some trusts will have been doing this for a while – I suspect more believe they are than really are. Some will find they don’t have the reports and metrics that enable you to say your governance is characterised in this way.”

Also overheard during the webinar:

“As a NED at a foundation trust, the governor piece is very important to understand. Especially in the current environment when so many foundation trusts are managing a group of dissatisfied governors due to their arm's length involvement during Covid.”

“Trying to draw extra volunteers into activity in a severe economic period in a deprived area (governors) is not ideal, but I like the challenge and it is right that we try. It will help us hear place. In a way the NEDs are now asked to be looking at the entity in a system, the governors anchor in place?”

“It’s an interesting debate – the private sector through its GRC programmes is thinking and introducing shadow boards to satisfy their need of equality, diversity and inclusion – of thought and protected characteristics groups. This is part and parcel of their ESG programmes and it’s changing.”

“With the focus on behaviours, does the Code make reference to continuing with the Nolan Principles and building on these? Like others have said Messenger refers to appraisals, measures and leadership behaviours – I would hope there is a cross reference between the two documents.”