Frequently asked questions

Governance is not a system defined by ‘doing what people want or think best’ but rather one that carries a specific responsibility to maximise the chance of the organisation’s aims being achieved while at the same time having duties towards all of that organisation’s stakeholders.

For public services, those stakeholders include government, the taxpayer, regulators, staff, citizens, business and public sector partners, banks, creditors and competitors. Accordingly, governance is usefully defined as ‘permission to govern’.

Governance is not to be confused with simple business efficiency, democracy, social science or populism. This is key in public sector services where those directing an organisation may have been selected through election rather than appointment. Governance, with its emphasis on evidence-based decisions by a defined ‘controlling mind’ of individuals selected for their skills and experience, is the flip side of populism.

Good governance is not about ownership, it is about stewardship.

GGI believes there are ten principal themes that illuminate the different aspects of good governance:

• Clarity of purpose, roles and behaviours – Boards need to ask themselves one fundamental question: ‘what is the point of this organisation?’ The purpose of the organisation, and the vision set by those that govern it to support the achievement of that purpose, is the starting point for any system of good governance.
• Application of principles – The principles driving an organisation must be of fundamental value, understood by all users and reflect the organisation’s purpose. We would argue there are ten: entity, accountability, stakeholders, governance and management, the board and constructive challenge, delegation and reservation, openness and transparency, board support systems, knowing the organisation and its market, and competence. We explore each of these in more detail in our Good Governance Handbook.
• Leadership and strategic direction – Without clear strategic direction and leadership embedded within the governance system, organisations can be successfully reactive, but are also prone to going into organisational free-fall.
• Effective external relationships – Good governance has the interests of all stakeholders at its roots. The best boards and governing bodies ensure their leaders are directly engaged in stakeholder relationships.
• Effective internal relationships – Boards must understand how their own organisations’ internal stakeholders are feeling and acting. At the root of many organisational issues is a lack of good communication between those who run the organisation and those who work for them.
• Transparency and public reporting – Openness builds confidence and early disclosure supports early improvement. A mature organisation will have empowered staff who welcome comments, who apologise when things go wrong and respect users’ expectations that things will be put right.
• Systems and structures – Organisations must be able to benchmark themselves against relevant best practice and track compliance against standards and targets. They must ensure a clear line of sight from the front line of service delivery through to board level on quality and safety.
• Challenge on delivery of agreed outcomes – It’s not always easy to identify and measure outcomes in complex environments or to identify specific causes of failure, but there are tools available to help and boards should be well-informed about them and about how their organisations measure up against relevant benchmarks.
• Risk and compliance – Healthcare organisations in particular work to a broad range of compliance regimes and it is the job of the board to ensure they are always observed – and this includes the conduct of the board itself. The risk system used by boards should properly alert management and boards of any danger of failing to meet compliance standards.
• Organisational effectiveness – Boards should regularly discuss what value they can add to their organisations. Good governance includes identifying a vision, developing a strategy, selecting and supporting a leadership to deliver that strategy, assurance that progress is being made, the stewardship of resources, and the guardianship of quality and safety – all done to the highest standards of probity and transparency.

Good governance should be the beating heart of any organisation.

To be successful good governance is essential to achieve objectives, deliver the right outcomes for citizens and drive improvement.

It is the central facilitation which looks at how organisations are run ethically and in the best interest of employees and citizens.

Governance is the oversight and approach to the setting of an organisations strategy and goals. Management focuses more on the operations of an organisation and the allocation of resources.

Boards have a broad range of responsibilities to ensure an organisation works in the best possible way for citizens and colleagues. This includes:

- setting the strategy for the organisation

- developing and holding the vision, mission and values

- owning the financial responsibilities of the organisation

- being accountable to the citizens, or in the case of private business shareholders, the organisation serves

- executive directors on the board also have the responsibility for day-to-day management of an organisation

Introduced in 1995 by the UK government, the Nolan principles are a set of values that are enshrined in the codes of conduct across the public sector. These values are:

• Selflessness: Holders of public office should act solely in terms of the public interest.
• Integrity: Holders of public office must avoid placing themselves under any obligation to people or organisations that might try inappropriately to influence them in their work. They should not act or take decisions in order to gain financial or other material benefits for themselves, their family, or their friends. They must declare and resolve any interests and relationships.
• Objectivity: Holders of public office must act and take decisions impartially, fairly and on merit, using the best evidence and without discrimination or bias.
• Accountability: Holders of public office are accountable to the public for their decisions and actions and must submit themselves to the scrutiny necessary to ensure this.
• Openness: Holders of public office should act and take decisions in an open and transparent manner. Information should not be withheld from the public unless there are clear and lawful reasons for so doing.
• Honesty: Holders of public office should be truthful.
• Leadership: Holders of public office should exhibit these principles in their own behaviour. They should actively promote and robustly support the principles and be willing to challenge poor behaviour wherever it occurs.

GGI has found the work of the King Commission into corporate governance an invaluable authority on good governance. Since 1994, the King Commission has published four major reports, the latest being King IV in 2016. GGI believes that applying the King IV approach will support NHS organisations to improve their governance arrangements and, as a result, deliver effectiveness and demonstrate compliance with regulatory requirements.

King IV’s objectives are to:

• promote corporate governance as integral to running an organisation and delivering governance outcomes such as an ethical culture, good performance, effective control and legitimacy
• reinforce corporate governance as a holistic and interrelated set of arrangements to be understood and implemented in an integrated manner
• encourage transparent and meaningful reporting to stakeholders
• present corporate governance as concerned with not only structure and process, but also with an ethical consciousness and conduct
• broaden the acceptance of the King IV by making it accessible and fit for implementation across a variety of sectors and organisational types.

The form of governance advocated by GGI has always relied heavily on the concept of stewardship, a word that has its origins in the Anglo-Saxon 'stig weard’ or ‘keeper of the hall’.

GGI explains stewardship through the image of a ninth-century village, somewhere in the Midlands perhaps, where the most important building would be the communal hall. Here, justice would be dispensed, sagas told, feasting and celebrations of important moments held. The hall would also offer protection in difficult times. The keeper of the hall was the guardian of community property.

Drawing from this concept, GGI defines stewardship as being accountable for something that you do not own which is valuable to the community, and then passing it on to the next custodians in a better state than you took it on. To us, stewardship is the key word to describe the governance duties of a director in a modern enterprise

Other governance authorities, particularly those active within the corporate sector, see stewardship as something distinct from the role of the board. In their lexicon, stewards are those responsible for major investors or shareholders, who should be diligent stakeholders in an enterprise and concerned with holding the board to account for the investment they have made, on behalf of – and in the interests of – others.

This broader concept of stewardship, intertwined but separate from the board, is captured in various public sector concepts such as antimicrobial stewardship, which is the systematic effort to educate and persuade prescribers of antimicrobials to follow evidence-based prescribing in order to stem antibiotic overuse, and thus antimicrobial resistance.

Excellent communication is key to good governance. It means both being open and honest while also ensuring you are listening to the thoughts of your staff, stakeholders and citizens. Communications should always be aligned with your organisational strategy and should allow staff members and stakeholders what their role is with any decision, project or task. It should inform, engage and be aligned with key value principles.

Governance is often seen as complex. Good communication about governance should make it simple and accessible. Ultimately it is to help people do a good job and excellent governance should save people time. Communicate with staff and stakeholders in a way that shows the use of good governance and how it will help people in their jobs.

Good internal communication is aligned with your organisational strategy. It should be engaging and provide opportunity for feedback and questions for staff - it should not be a one-way street. It should allow conversation and dialogue. As many channels should be used as possible to reach staff with different learning approaches - including staff events, film, written text and images. Good internal communication should mean that board and staff are fully aligned.

Good stakeholder engagement is about building relationships. Have a strategy for stakeholders aligned with your organisational strategy to bring the right people on-side. Always approach and engage with stakeholders when a decision is being taken that might affect them. Work in partnership wherever possible to bring additional value to the communities served. Be open and transparent about decisions that are taken and why stakeholder voice has been taken into consideration or not. To keep a relationship open, ensure you have a person who is aligned with each stakeholder, keeping the conversation going even during times when there isn't specific work taking place with them.

You can integrate the community voice into board meetings in many ways, but the key is to ensure it is listened to and acted upon, not just present in the meeting itself. Where possible, have a representative or champion at board meetings. Request that all papers coming through the board have been checked with a community group in advance of the paper being raised. Ensure your board is diverse - bringing not just business expertise but also the lived experience of the communities and groups you serve.

Without clear strategic direction and leadership embedded within the governance system, organisations can be successfully reactive, but are also prone to going into organisational free fall.

Leadership is absolutely key to the success of an organisation.

Assurance is key to any decisions made at board or committee level. Assurance is providing evidence of what is happening including data, research and fundamental outlines of process. Reassurance is when someone or a group of people make a statement to remove any doubt or fear, but without evidence.

Yes – boards must demonstrate compliance with regulatory requirements and hold the organisation to account to achieve this.

An executive director is employed by the organisation they work for. This means they are responsible for the strategic direction, management and delivery of activities. A non-executive director does not engage in day-to-day management but will be involved in strategic decision-making and oversight.

A non-executive director provides independent objectivity and oversight of the strategy and running of an organisation. In their role that tends to be only for a couple of days per month, non-executives provide perspective at a board level and on key committees such as audit and risk. Non-executive directors hold employed, executive directors to account.