GGI’s response to NHS England draft guidelines

On 27 May, NHS England published two new guidance documents, Draft guidance on good governance and collaboration and Draft code of governance for NHS provider trusts, which will play a significant role in framing the way boards work until 2030.

The consultation period for both documents closed on 8 July and the final versions have been promised during the summer of 2022.

On 10 June, we published an initial response to the draft guidance by our CEO Andrew Corbett-Nolan. Today, we publish GGI’s formal response, which was submitted to NHS England as part of the consultation process.

One set of guidelines, one response

GGI welcomes the updating of the code to bring it into line with the current UK Corporate Governance Code, and to reflect the changed policy landscape focused on system working. We are also supportive of the greater focus on culture in the draft guidance, and the new role for boards around assessing culture in organisations and the wellbeing of the workforce.

We note and commend the highlighting of collaborative and collegiate behaviours, and fully support NHS England’s intention of incorporating these into oversight arrangements going forward. That said, as they currently stand the two documents read in a slightly contradictory manner and we feel that it would be beneficial to rework them into a single guidance document.

We also feel that, at present, this is a missed opportunity for looking forward to how governance and collaboration will need to work in the post-2022 Health Act world, which is much more focused on networks and system working.

Overall, we would suggest a refocusing of these two draft documents into a single guidance document on good governance and collaboration that is applicable to trust boards, integrated care boards, and the wider health and care sector infrastructure.

We also propose that more account is taken of the fundamental changes needed to ensure good system governance, and the different governance relationships that networks of providers, leaders and systems necessitate.

There is much common ground covered by the two draft documents, which makes it difficult to offer distinct commentary. Most of the comments we offer here relate to the code of governance for provider trusts as it is the lengthier of the draft documents.

Governance for 2022 and beyond

The timing of the publication of this draft for consultation has coincided with the gestation of integrated care systems. The guidance hasn’t really reflected this, and indeed having a document just for provider trusts feels rather dated. It would be useful if a revised set of guidance could explicitly cover the new ICS infrastructure and particularly consider place-based and provider collaboratives.

There also needs to be more involvement and emphasis on other actors in the new system and how this interface, particularly with local government and the voluntary and community sector, sits with NHS governance arrangements going forward.

There is increased internal and external complexity for all boards involved in the health and care system, and this needs to be acknowledged and reflected in a revised version of the guidance. It would be worth referring to the Nolan Principles of Public Life as a reminder of public sector duties, but not stating them in full.

In order to be most effective, there needs to be an overall view of good governance for the entire system, including how NHS England and the Department of Health and Social Care operate, with a golden thread of collaboration extending all the way through reflecting the values and mission of the NHS as a whole.

We would like to draw attention to the King IV Report on Corporate Governance for South Africa, published in 2016. GGI believes that applying the King IV approach in this code would enable NHS organisations to improve their governance arrangements and, as a result, deliver effectiveness and be able to evidence compliance with regulatory requirements.

King IV’s objectives were 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.

There is merit in adopting a similar approach in a redrafted version of this code. The new NHS is necessarily more complex as the 2022 Act has widened its responsibilities to include, explicitly, the exercise of cooperation and partnership to achieve better outcomes for the population. We would suggest that the NHS needs now to agree the definition of corporate governance as the exercise of ethical and effective leadership by a board towards the achievement of four governance outcomes:

• Ethical culture
• Good performance
• Effective control
• Legitimacy

This model defines a simple focus on practice delivering outcome by defining a set of principles which guide organisations on what they should set out to achieve. For the NHS these principles should be explicitly linked to clinical outcomes and wider health and wellbeing goals, and thus get ownership and traction from clinical leaders (and link across to clinical governance). The code should also try to anticipate how the NHS will evolve over the next ten or more years in the context of integrated care. If the governance vision for health and care is to hold providers (whether NHS, private or voluntary sector) accountable for delivery via provider collaboratives then this code needs to be applicable for them.

Board composition

The draft guidance documents have a lot to say about board composition, and we welcome the fact that the role of both chairs and non-executives is restated and strengthened. We would note that there is much repetition in parts of the document, and our experience suggests that to be adopted and used a code should be short, simple and straightforward.

There is too much in the draft about annual reporting, although it would be worth having a consistent single annual review format across all NHS organisations, including the DHSC, but this code is not the place for it. Recommending an annual board appraisal process, with input from system partner organisations, would be a useful addition and in line with the new ways of working. Moreover, the code would benefit from cross-referencing rather than restating what is already found elsewhere (e.g. guidance for non-executive directors, people promise, quality accounts etc.).

The draft code places much more emphasis on the role of governors, and reference to proper development programmes for councils of governors is to be welcomed. However, the emphasis is probably too strong in the context of overall system development. Surely a better way to ensure that the NHS takes account of the wider benefits to ‘the public’ would be in a duty for boards around engagement rather than additions to one role in just one part of the health and care system.

Likewise, the role of non-executive directors needs to be made more explicit. NEDs and other part-time roles are increasingly being given too much responsibility and set up to fail. We would observe the ‘NED Champions’ which have fallen out from Ockenden and other reviews. Is this really the right use of a NED’s time and role on a board? Conversely, the code currently underplays the importance of the company/ board secretary role, which we believe to be essential for the operation of good governance.

The emphasis on achieving much better board diversity is helpful, but we do wonder whether quotas are the right approach. Crude quotas, particularly relating to a few protected characteristics, are unlikely to address the broader cultural diversity point that lies behind the laudable aim in the draft code.

If the emphasis is for boards to look more like the populations they serve, then what might be more helpful is to ensure that boards think about succession planning and the next generation of leaders in a more meaningful way. How are partners, patients and the public generally able to influence boards? Have boards considered their skill mix and undertaken audits of their skills and areas where they have gaps? Some areas have involved younger people more in their boards, with youth councils or youth champions being given particular associated roles; this might be a better approach.

Boards in Scotland and Wales have staff membership. We feel this would be a useful inclusion and would firm up boards’ corporate responsibility for staff health and wellbeing in a more meaningful way than having a ‘wellbeing guardian’ role for a board NED.

Increasingly too we would like to see the duty of care to staff include those outsourced and not directly employed, perhaps as a reference to the anchor institution role that health and care organisations have.

Other points to note

Overall, while there is much to be welcomed in the current draft code, it is rather long. We would advise making it much more high level and principles-based (along the lines of King IV, referenced above). If the code is to have any real meaning, too, clarity on how it is going to be assessed and enforced should be included.

In relation to equality, diversity and inclusion, the requirements around and references to the Workforce Race Equality Standard, disability, gender and deprivation are helpful. However, we would have expected to see reference to protected characteristics, as outlined in the Equality Act 2010, when discussing under-representation. This lack of an explicit reference to the legal definition could reduce the impact of the work trusts and systems are already doing to recognise the cumulative disadvantage for their staff and patients where multiple characteristics intersect. We would also welcome reference being made to closing the Gender Pay Gap as part of the remuneration section.

Finally, in the current draft appendices there is a reference to how audit committees are expected to work and what their business is expected to be. This feels rather narrow, and to secure their broader value audit committees should look much wider than just finance and ensure that quality is also considered. Going forward, as well, there needs to be somewhere more specific where the board should be able to focus on what it has achieved on tackling health inequalities, and this could be an additional role for audit committees.