Comparing the best and the not quite so good reveals some of what makes an NHS organisation’s board highly effective, say Naomi Chambers and Alison Pryce, with Manchester Business School PhD students Yanchao Li and Petra Poljsak.
The evidence is growing about where boards go wrong, how they fail patients in their care and what lessons can be learned – but often are not. In our study of boards of high performing NHS organisations we wanted to ask a different question. What are they doing differently? What are the lessons to be learned from success?
Using a combination of measures we identified the top 19 NHS organisations in England. We included metrics over several years to exclude sheer good luck or unsustained high performance. Then, from publicly available information, including analysis of board agendas and minutes, we examined the key features of these boards in comparison with others. We found a positive link between high performing organisations and:
- chief executives being in post for longer than four years;
- number of women on their boards;
- contribution of non-executive directors at board meetings;
- dominance of specialist/tertiary trusts over other types of organisations;
- It is important to emphasise that these are links rather than causes, but they are important.
Effective board working
There is no shortage of steer for NHS boards. The Healthy NHS Board emphasises three main roles: formulating strategy, shaping culture and ensuring accountability. The NHS Confederation has identified four characteristics: a focus on strategic decision-making, corporate working, constructive challenge and a strong chair. A good relationship between the “two at the top”, the chair and the chief executive, is also important.
From the Higgs Review in 2003 onwards, there has also been a growing focus on the role of the non-executive director. A study published last year by Professor John Storey pointed to a positive association between active non-executive director involvement and superior organisation performance.
Looking beyond the NHS, there is evidence that a high turnover of chief executives is associated with poorer firm performance. Boards of successful commercial organisations have been found to be more focused than others on strategy, on use of resources and on talent management. Professor Bob Garratt refers to the learning board and to the cycle of board tasks, from setting direction, making strategic choices, monitoring performance through to accounting to shareholders.
The evidence about the importance (as opposed to the desirability) of diversity on boards is more mixed. Research on board composition is equivocal: some studies have shown that smaller public sector boards with effective sub committees are associated with better outcomes. In terms of board dynamics, a climate of high trust coupled with robust challenge and a firm grip on the business is emerging as a compelling proposition.
Our study examines to what extent the boards of top-performing NHS organisations match these features or show others.
NHS organisations are subject to many external performance reviews and assessments with specific focuses. We wanted to take a more balanced view. We looked at performance across three perspectives: customer, business and employee.
We also wanted to look at reliable high performance. So, where performance scores have been measured consistently for a number of years, we looked for continuous high performance over time.
First, we identified high performing organisations separately for each of the three perspectives (see table). Then we looked across the three lists to see which organisations were high performing from at least two of the perspectives. We identified 19 NHS organisations that we believe are truly high performing.
Just three organisations were high performers from all three perspectives:
- Clatterbridge Centre for Oncology Foundation Trust
- Queen Victoria Hospital Foundation Trust
- The Royal Marsden Foundation Trust
All five of the high performing specialist trusts were high performing from both the customer and business perspectives. The three high performing acute trusts were also high performing from both the customer and business perspectives.
Three of the four high performing mental health trusts were high performing from both the employee and business perspectives.
Foundation trusts sweep the board over non-foundation trusts. But it is puzzling that among the organisations identified, no general acute trusts were consistently high performing from the employee perspective. In particular, job satisfaction scores were lower than staff recommendation scores (either as a place to work or to be treated).
By contrast, specialist and tertiary trusts are over represented on our list, with three high performing from all three perspectives. There are some “common sense” reasons for this: these are likely to be smaller and more unified organisations, able to attract the best staff in their field, with lower staff turnover and high customer loyalty. The culture, management and leadership arrangements in these organisations deserve, however, further investigation to identify what learning may be extrapolated for others.
In order to determine whether boards of high performing organisations have specific features and behaviours, we compared the boards from our 19 high performing organisations with the boards of 19 “not so high” performing organisations. The group of 19 not so high performing organisations was made up of the same number of specialist trusts (five), acute trusts (three), mental health trusts (four), primary care trusts (six), and care trusts (one) selected at random from the organisations that were not identified as high performing from any of the three perspectives.
We wanted to know whether the boards of high performing organisations:
- had more stable leadership;
- were smaller;
- had a higher proportion of women members
- had meetings at which non- executive directors made more of a contribution;
- gave priority to items relating to patient experience, strategy, talent management and organisation development.
Table 3 outlines our findings. Because of the organisation turbulence caused by the NHS reforms, we used 1 March 2010 as the cut-off date. Eight of the high performing organisations had a chief executive who had been in post for at least four years up until 1 March, compared with just two of the “not so high” performers.
There was no difference in the board sizes of high performing organisations and not so high performing organisations. Both groups had an average (median) of 13 members. We reviewed the board membership for gender balance. Three of the high performing organisation boards had least 50 per cent female members and only one of the not so high performing did. We examined board minutes to establish the contribution of non-executive directors and found a higher number of non- executive contributions per page of board minutes in the high performers. We did not find any difference between the priority given to patient experience, strategy, talent management and organisation development at board meetings between the two groups.
We need to be cautious about how we interpret this data. Because the numbers are small, the results are not statistically significant. Only publicly available data was used. But the findings do suggest some trends and we believe that the evidence points to the following:
- The foundation trust model is associated with superior performance
- organisations should seek to retain their chief executive (and possibly their leadership team) over a sustained period of time
- board diversity may make good business sense
- on-executive directors should be encouraged to provide constructive challenge at board meetings
- general acute hospital trusts may wish to tackle sources of job dissatisfaction and learn from others (for example in mental health and in specialist trusts) that score better in this domain
- More research is needed to open the black box of board working to establish the difference that boards can make to organisation performance.
Find out more:
- For a copy of the report email Naomi Chambers
- Read: Effective Boards in the NHS? A study of their behaviour and culture