This is the first of my articles that explicitly addresses executive as well as non-executive NHS board members.
I apologise to NEDS if, therefore, I seem to be restating a number of fundamental truths and identifying a number of characteristic dilemmas. However, it is in their interests (and in all of our interests) that there should be explicit clarity and agreement between them and their executive board colleagues as to what NHS governance is and, equally importantly, what it is not.
The definition of governance
There is continuing uncertainty about the meaning of the term governance. It is almost as often misused as it is used - not least by the Department of Health and others in the NHS who should know better. People frequently write/talk about the board “managing” or “leading” the organisation. This is, in my opinion, profoundly to misunderstand the board’s function - which is to govern. Governance is both legislative and judicial. That is, the board makes organisational “law” and it sits in judgement on the organisation’s compliance with these laws and national statutory duties.
It is not the task of the board to lead the organisation itself and far less to manage its operations. These are executive functions and thus the responsibility of the executive arm of the organisation - the CEO and other executives (acting in their functional as opposed to their board member role), the management team and the staff group. The executive arm can only operate effectively if:
- it has the board’s sanctioned authority to act within parameters established through the board’s exercise of its legislative governance duty and
- if it is transparently accountable to a board that scrutinises its performance and thus holds the organisation to account.
The board’s legislative function - the definition of organisational principle, purpose and priority
By the legislative function, I mean the explicit definition by the board of the organisation’s principles, purpose and priorities (the three P’s). In the definition of both principle and purpose, it is vital that a board is attentive to its overall duty to the public good - rather than to the narrowly defined organisational good.
The definition of these three P’s is not a once and for all activity. In a rapidly changing global environment and in the face of fundamental change in the national and local landscape of health and social care, the two latter P’s need (in collaboration with partners) to be kept under constant iterative review. In other words, the legislative element of governance has within it a significant forward focus.
The board’s assessment function - the scrutiny of organisational performance
By the assessment function, I mean the board’s duty systematically and rigorously to hold the organisation to account for the enactment of its principles in practice, for the consistent pursuit of its core purpose and for timely progress in pursuit of its priorities. “Holding to account” is seldom defined. It is the scrutiny of evidence and the exercise of judgement. Such judgements range from enthusiastic endorsement of achievement, through requiring corrective action, to the imposition of sanctions.
The board’s identification of risk
By its nature, healthcare is (arguably uniquely) risk rich. As a key component of its assessment function, the board needs to identify and keep under ongoing review the key risks to which the organisation and the patients and the communities that it exists to serve are exposed. Since risk can have a positive as well as a negative dimension, it is for the board to define the organisation’s appetite for risk and to foster the development of a risk sensitive but not risk averse culture. So that it can maintain a grip but not a stranglehold on the ways risk is managed, it must ensure that an appropriate assurance framework is in place to test risk related policy and practice and to deliver the robust evidence which forms the foundation of reasonable assurance.
Evidence to underpin assurance
Risk and other forms of assurance scrutiny focus on the organisation’s operations (its systems, processes, actions and achieved outcomes) and the evidence that they generate. The volume of such evidence is almost limitless and much of it data that in raw form can obscure rather than reveal underlying reality. It has become a truism that is not data that a board needs, but intelligent information -another term frequently used but almost never defined. Intelligent information is data and other hard and soft facts, factors, or impressions that have been subjected to a robust and appropriate analytic process that renders input into an output that is fit to inform judgement. Governance and assurance are joined at the hip by intelligent information.
The role of board sub-committees
Such is the range and scope of activity of almost all NHS bodies, that a board would be overwhelmed by the sheer volume of even intelligent information if all came directly to it. For this reason, a board needs to have in place a sub-committee structure that engages in in-depth scrutiny, on the board’s behalf, of evidence derived from specified areas of the organisation’s activities. Through this scrutiny, sub-committees test out the effectiveness in action of clinical, management and administrative policies, systems, processes, controls and outcomes. A sub-committee does so in order either to satisfy the board that performance is compliant with principle, purpose and priority or to alert it to significant variance so the board can require the executive to take corrective action.
Board sub-committees, in other words, while they do not govern have a vital role to play in supporting the governance function. In order to do so, they must sit entirely outside the executive/management line. They must neither lead nor manage areas of the organisation’s operations, since to do so would fatally prejudice their assurance support function and confuse what ought to be clear and unambiguous lines of clinical/managerial accountability.
The scope and extent of governance
To be assured, a board needs to be satisfied that, with the support of its sub-committees, it governs all aspects of the of the organisation’s activities - in other words, governance is an overarching umbrella, not a vertical chimney of activity. This is, perhaps, best illustrated by considering the way the duty of care is as actively engaged in car parks as it is in surgery. It is all embracing - notwithstanding the fact that, within current Standards for Better Health it is one discrete domain of seven - as if the other domains were self-governing, which is inherently absurd.
Governance and the exercise of judgement
No matter how comprehensive the intelligent information is that underpins a board’s deliberations and decisions, assurance seldom amounts to certainty. The test of governance is not and cannot be infallibility. Nonetheless, responding to dilemma lies at the heart of the public sector governance task and this is an onerous responsibility. However, since governance is a collective activity, responsibility does not lie solely on the shoulders of the chair, or the CEO. Board governance is the application of collective wisdom to complex and often profound uncertainty. I will examine, in my next article, those cultural factors within boards that inhibit or promote collective ownership of the governance task and wisdom in its discharge.
Find out more: attend HSJ’s NHS Governance 2009 conference