23 February 2024 – NED webinar – NHS audit committees

GGI’s latest monthly webinar for NHS non-executive directors was the second of four sessions focused on the main board committees.

This month we looked at audit committees—the same month that saw the release of the new edition of the NHS Audit Committee Handbook. GGI senior consultant Joanna Watson is a member of the HFMA governance and audit committee, which developed the handbook. For the first time, this is open access, and while it's written with the NHS in mind, many of the principles will be of interest to other sectors too.

Our special guest for this session was Alan Edwards, non-executive director at Black Country Integrated Care Board. Alan is an experienced public sector board member who has held NHS governance positions with Royal Wolverhampton Hospitals NHS Trust, Walsall Healthcare NHS Trust and Birmingham Women’s and Children’s NHS Foundation Trust.

Alan is a public sector accountant by training and had a number of years in local government before becoming an audit firm partner. He said ICBs are complex organisations with governance arrangements that are still evolving. He said his own ICB had only agreed a new operating model last month, after months of discussion and multiple iterations.

The new operating model is based on a system focus on place and provider collaboration, as well as the development of an integrated care partnership. It is underpinned by individual governance at each of the organisations involved.

Alan said the Black Country ICB operates through a typical range of committees, including audit, finance, and quality. He said that it also operates with a wide range of system-wide programme boards for its major service groups.

Alan believes NEDs have a vital role to play in ICBs. He said they can help provide independent oversight and challenge, as well as bring a wealth of experience and expertise.

One of the key points he raised was the rising workload for NHS executives. He said: “An issue being raised among the NED community is the growing demands that we're placing on our executive directors in the current financial and operational environments, and particularly in what is bound to be a fraught pre-election period.

“Many of us are worrying about how we're going to fill senior roles in the future and about succession planning, both at chair and non-executive level as well as at executive level. Could this increasing ICS-wide governance provide a new avenue for the NED community to come together at system level and drive change?”

Chairing the session, GGI CEO Andrew Corbett-Nolan raised another key issue facing boards. He said: “As things have become much more complex, all kinds of committees need to spend more time understanding their organisation and the market and the interconnections rather than just repeating business-type reports and metrics. Organisations that are well governed – the ones that explicitly help non-executives in particular – understand the plausibility of the assurance they receive.”

Andrew also drew attention to an article written by Dr. Nadeem Moghal about the ability of the NHS to tackle health inequalities. Andrew said: “Nadeem says that placing the responsibility around tackling health inequalities on the health component of the public sector is almost the most perverse thing to do, because it's every other bit that actually can do something about it.”

Also overheard during this month’s webinar:

“One of our problems was that we tried to do transformation. And then the cuts came in. We are probably abandoning transformation for cuts rather than letting the transformation deliver cuts.”

“We need to start thinking about the competency and capability of an organisation to deliver transformation – or just to deliver service as is. And we don't seem to be doing that within ICBs, which is why I get worried about our ability and capability to deliver any form of transformation.”

“The stretch on executive directors is something that worries me a lot. We're asking people to do almost a superhuman job here, when we're asking them to put together so many programmes of change, both within their own organisation, across organisations, across systems... Look at Sandwell and West Birmingham Trust, they're operating across two systems. The scale of relationships that they've got to manage is just enormous, as well as the scale of the delivery challenge.”

[On the importance of diversity of experience among NEDs] “…try to recruit a pipeline. So people who would be good enough, we try to keep them engaged, even if they're not appointed. We also almost go out of our way to not appoint a load of health professional dinosaurs such as myself, but try to get people who have an understanding of health and the communities in which they operate, who actually have a wider non-executive and executive history.”

“We’ve got to be a bit careful about falling into the trap of everybody doing everything, just because we talk about collaboration. To me, collaboration's got to have a hard edge, which means you've got to be pretty clear about demarcation and who's accountable for what. […] Don't forget, you’re the NED of an organisation. And that organisation has specific risks and responsibilities. And that's got to be front and centre of what you're planning.”

[On the role of audit committees] “The audit committee is not just about compliance; it deals with performance as well. If you don't do that, that's when you get siloed and you become a nonentity, because it's just looking at whether the income is right, and that we get the right set of accounts. What we should be looking at is conformance, which is performance and compliance.”

“[Our audit committee’s] primary function is to provide some kind of assurance that stuff is being done properly, that the numbers in the accounts are right, that the processes and procedures are being followed, whether there are any problems with processes and procedures that need to be dealt with, and obviously to ensure that the reporting that we make to the public is accurate.”

These meetings are by invitation and are open to all NHS non-executive directors, chairs and associate non-executive directors of NHS providers. Others may attend by special invitation.

If you have any comments, questions or suggestions about these webinars, please contact: events@good-governance.org.uk