Noel Plumridge on the non-exec conundrum

'It has been bloody awful. My confidence is shot. But as a non-executive I can't take them to an employment tribunal.'

Thus Mark Anderson (see page 13 of 7 December 2006 issue), a non-executive director of the United Lincolnshire Hospitals trust from 2000 until he resigned last autumn, expressed his feelings at being forced out of office. Mr Anderson had questioned a strategic health authority requirement to save£28m in one year, part of the nationwide battery of measures introduced to bring the NHS back into financial balance by the end of 2006-07.

According to Bill Baker, another Lincolnshire non-executive, the incoming chair asked all seven non-executives to resign. 'I do question,' Mr Baker wrote, 'the wisdom and appropriateness of removing all of the existing non-executive leadership, particularly given that the function of this part of the board is to provide some independence of thought.'

But the context wasn't simply financial recovery; it was assessment for foundation status. Mr Anderson alleges that the diagnostic exercise used for that assessment had been used to attack the trust's non-executives, portraying them as not up to the job. 'They are not interested in people who know their communities', he said. 'All they are interested in are business people.'

The Lincolnshire affair was widely reported last December, so why rake over it now? First, because Lincolnshire is a transparent example of a change in NHS governance, the scale and implications of which need to be appreciated..

Only 55 per cent of new PCT non-executives have come from the old PCTs. They may not all be business people and entrepreneurs, but that's a lot of new blood by any standards.

So who are these new non-executives? Are we indeed living through a triumph of hard skills over soft, male values over female?

Now I have nothing personally against boards stuffed with accountants, bless their pointy little heads, as long as the NHS vision of business viability isn't limited to the in-year bottom line. Even in the commercial world, that's the way to oblivion.

Firms that don't treasure their relationship with customers perish. There's nothing wussy about boards making a genuine patient focus their top priority, not least because if one starts from the patient experience, those elusive efficiency savings soon come. Ditch this source of patient frustration; scrap that unnecessary delay. The moral? Manage costs, improve productivity, but never forget the customer is king...

Meanwhile, up and down England, as NHS trusts mutate into foundation trusts, unwanted people are leaving or impotently serving out their time. They join a disillusioned procession of former PCT non-executives, redundant from the last year's cull. And with them goes knowledge and experience not easily replaced. The NHS has hardly taken stock of what it is losing.

Moreover, many have found the process brutal. A recent survey of the NHS Alliance's non-executive network found people leaving the NHS feeling 'bruised, hurt and devalued'. NHS Alliance chair Michael Dixon says the survey 'says something about grace and manners and the way the NHS repeatedly fails to thank, value and respect those who work for it.' (News, page 9, 11 January.)

Relentless cost-cutting and a tightening labour market has made macho management or cold bureaucratic process not uncommon. Many PCT managers are feeling battered. But non-executives are different. For them it's not a career - and many remain influential in their communities. The NHS may yet inherit a bitter legacy from this churlish process..

The second reason for raking over the Lincolnshire episode is the light it sheds on non-executive autonomy, a commodity so valuable it needs to be guarded jealously..

A brief reminder of why we have non-executive directors at all: Beneath the long non-executive job description lies the simple truth that their role is to maintain an independent check on executives. Non-executives are a response to past corporate scandal now two decades old - remember the Daily Mirror pension fund? the Cadbury report? - but their importance is undiminished. They are there to ensure the organisation operates in the interests of patients, communities and funders - not directors.

This role is reinforced by corporate structures: a pay and remuneration committee, to make sure executives don't overpay themselves; and an audit committee, for independent scrutiny of finance and governance. Sadly, unless the non-executive voice can be heard, none of this works.

But how does one combine autonomy with corporateness? How can one challenge yet remain part of the team? That's the non-executive dilemma, and it's not new. As last year's Dr Foster Intelligence publication The Intelligent Board asserts, non-executives 'are not simply there to referee a game being played by executives, but to share fully in collective responsibility'.

It's the difference, if you like, between challenge and outspokenness. But if freedom to challenge sinks within the fear of shared blame that keeps executives in line, then why have non-executives at all? One response to the NHS Alliance survey is a statement, from an anonymous re-appointed non-executive, that 'there seems to be a bias against candidates with a record of constructive challenge, even in award-winning PCTs declared fit for purpose.'..

It will be intriguing to see how the new 'business people and entrepreneurs' balance the conflict between the needs of organisations, in the brave new market they inhabit, and the desires of the corporate NHS. Perhaps there will soon be a test of whether new boards have genuine independence, or are still branch offices of the Department of Health.

Noel Plumridge is an independent consultant and a former NHS finance director.