Monitor is consulting on a revised version of its Code of Governance for NHS Foundation Trusts, to come into effect from April 2014. The deadline for feedback is November 29th. Here is the feedback that I submitted to Monitor in a personal capacity. The 2gether NHS Foundation Trust is likely to submit feedback separately.
The Code is intended to be a guiding statement of best practice in corporate governance, but it necessarily includes some provisions that are statutory requirements or mandatory for other reasons. This makes it potentially confusing.
In my opinion, the draft Code is not well written. The careful explanation that would be needed to avoid confusion is missing, and there seem to be some statements in it that are just plain wrong.
The consultation document can be found here: Request for feedback on the revised ‘Code Of Governance for NHS Foundation Trusts’
I am a public governor of the 2gether NHS Foundation Trust. This feedback is an expression of my own views based on a very brief reading of the draft Code, which are not necessarily the views of the Trust or of its Council of Governors.
Question 1: Do you have any feedback on the specific changes we have made to the principles and provisions of the code?
Generally, the wording of this draft Code is sloppy in places, suggesting that it was written in haste and has not been thoroughly reviewed and edited before the consultation. I provide some examples below, but do not assume that I have identified all the problems.
The structure of the document is confusing because some of the statements it makes appear in three or four places, but some other statements only appear in one place. If you are using it for reference, and you find some information about the topic of interest, you cannot assume that you have found all the relevant information, because more information might appear in other places. It would be better for the Code to have a logical structure that avoids repetition.
Here are just some examples of sloppy wording that I found. The pointless and confusing repetition throughout the document means that several of these examples occur in more than one place:
- The draft fails to mention anywhere the duty under the Act of each director individually to act with a view to promoting the success of the corporation so as to maximise the benefits for the members of the corporation as a whole and for the public.
- This sentence (p. 10) is difficult to make sense of:
“There should be a clear division of responsibilities at the head of the NHS foundation trust between the chairing of the boards of directors and the council of governors, and the executive responsibility for the running of the NHS foundation trust’s business.”
Perhaps it just means:
“The chairman does not have executive responsibility.”
- This sentence (p. 10) creates confusion:
“The chairman is responsible for leadership of the board of directors and the council of governors, ensuring their effectiveness on all aspects of their role and setting their agenda.”
The chairman cannot be solely responsible for the effectiveness of the board or the council of governors, because the Act (and other law) imposes duties on the board and on the council of governors directly. This sentence implies that an ineffective board or council could simply blame the chairman, contrary to the provisions of the law.
Similarly, the chairman cannot be solely responsible for setting the agenda of the board or the council of governors, because an ineffective board or council could again simply blame the chairman for failing to set their agenda appropriately.
Furthermore, in the case of the council of governors, the agenda might in extreme circumstances include removal of the chairman, and it is absurd to make the chairman responsible for setting such an agenda.
- This sentence (p. 10) is misleading:
“The council of governors has a statutory duty…including ensuring the board acts so that the NHS foundation trust does not breach the conditions of its licence.”
The council of governors has no general power to ensure how the board acts. In general it can only hold non-executive directors to account after the board has acted or failed to act.
- This phrase (p. 10) is misleading: “partner organisations in the local health economy”
The Code should clarify how those governors who are appointed by partner organisations are expected to manage potential conflicts of interest between the organisations that appointed them and the trust members and the public they are required by law to represent.
In the case of elected governors, there is no justification at all for stating that they should represent the interests of partner organisations.
Furthermore, the term “partner organisations” is undefined.
- This phrase (p. 18) is unclear: “the new voting rights established under the 2012 Act”
The Code should identify exactly what voting rights it is referring to.
- This sentence (p. 19) is misleading:
“The council of governors should take care to ensure that reasons are…legally sound.”
The council of governors does not have the power or the resources to ensure that any reason is legally sound.
- This phrase (p. 20) is misleading: “protect the interests of patients”
The Act does not contain this phrase. Therefore it is misleading to imply that it is a statutory requirement. If it is a Monitor requirement, then it needs much more explanation because it significantly extends the role of governors.
- This phrase (p. 20) is misleading: “non-NHS work”
The Act additionally specifies “in England”, ruling out work for the NHS in Wales, Scotland and N. Ireland.
- This phrase (p. 21) is misleading: “private patient work”
The Act does not specify private patient work. It specifies any activity that is not for the purposes of the health service in England. This would include activities for the NHS in other countries of the UK, and for companies and other entities that are not private patients.
- This sentence (p. 21) is misleading:
“The council of governors should only exercise its power to remove the chairman or any non-executive directors after exhausting all other means of engagement with the board of directors.”
Engagement with the board of directors is not a remedy for a dysfunctional chairman or non-executive director. A council of governors might have good reason to remove an individual chairman or non-executive director even if engagement with the board of directors as a whole is otherwise entirely satisfactory.
- This sentence (p. 40) is misleading:
“Governors should pay due attention to their duty to represent patients…”
This makes it seem that individual governors have a duty to represent individual patients, implying that governors should act as patient advocates. There is no such duty in law. If Monitor has invented this new duty all by itself, then it requires much more explanation.
- This sentence (p. 40) is misleading:
“The board of directors should make some or all board meetings…open to the public.”
This seems to allow the public to be excluded for no particular reason. The Act does not contain the phrase “some or all”. It only allows for the public to be excluded “for special reasons”. This implies that whenever the public are excluded from a board meeting, the special reasons should be publicly stated.
- This phrase (p. 31) is misleading: “regular intervals not exceeding three years”
The phrase “not exceeding” makes it seem that, say, elections every two years would be OK. But elections every two years would be illegal. The Act specifies exactly three years:
“An elected member of the [council] of governors may hold office for a period of three years.”
- This sentence (p. 44) is repeated pointlessly (that is, even more pointlessly than the other pointless repetition in the draft Code):
“The council of governors is responsible for setting the remuneration of non-executive directors and the chairman.”
Question 2: Are the disclosure requirements sufficiently clear?
As I’ve noted above, repetition does not make for clarity. The disclosure requirements in this draft Code are merely repetitive, not clear. If the body of the document were clearly written, Schedule A would not be needed.
In general, there is confusion between those things whose current status must be disclosed, and those things that need only be disclosed retrospectively in the annual report.
Furthermore, it is not made sufficiently clear that the disclosures required by the Code, and the disclosures required in the annual report, are only part of the disclosures that a trust must make.
It would be clearer to gather all the requirements for the annual report in just one place, in the Annual Reporting Manual, and remove pointless repetition from the Code. Then the Code could focus on those things whose current status needs to be disclosed (as opposed to those things that need only be disclosed retrospectively in the annual report).
The long description of Schedule A on pages 7-8 is baffling and useless.
In paragraph A.1.1. (p. 14) there is to be a “formal schedule” that is “complemented with a clear statement” and a further “statement explaining…”. That’s three statements already.
Then the “annual report should include a statement…including a high-level statement”. That’s another two statements, one inside the other, and both inside the annual report.
What’s the relationship between these five statements?
Are all five merely retrospective within the annual report, or are only the last two retrospective?
Why are the first three statements not mentioned anywhere else in this otherwise highly repetitive draft Code? And why is there no explanation of how these first three statements are to be published (if at all, and if not retrospectively in the annual report)?
Paragraph A.1.1. is just one example of this kind of confusion that I noticed. There are probably others.
Question 3: Do you have any feedback on the changes we have made to the tone and structure of the Code?
The claimed “focus on behaviours and outcomes” is not apparent.
For example, Section A: Leadership (p. 13) says that a trust “should be headed by an effective board of directors” but it makes no attempt to say what “headed by” means in terms of behaviours or outcomes.
Later, the word “entrepreneurial” appears, but there is no attempt to define entrepreneurial behaviours or outcomes either.
After only a few sentences, nothing but the old focus on “institutional structures and process” is evident.
In my opinion, a focus on behaviours and outcomes is not appropriate for a Code of Governance, which is essentially a document setting out requirements for structure and process. It would be better simply to drop the claim that the tone and structure have changed, as it is only a shallow pretence.
Question 4: Do you have any feedback on our proposal to retain existing requirements for audit committees?
Question 5: Do you have any feedback on this [non-executive directors with clinical experience] change?
It seems like a good idea, but it is surprisingly weakly stated considering that it is backed by some evidence of effectiveness.
Question 6: Do you have any feedback on these [governance reporting requirements] changes?
Appendix C fails to clarify anything. As noted above, repetition is not clarity and, as far as I can tell, Appendix C merely repeats information that can be found elsewhere.
Question 7: Do you have any other feedback or suggestions for changes?