From The Top

Author:Mr John Coutts
Profession:ICSA
 
FREE EXCERPT

Boards of directors have been around in the NHS for some time. At NHS Providers we have been a vigorous advocate of board leadership as the best means of delivering strong but responsive and accountable leadership and direction. Among trust chairs, non-executive directors (NEDs), governance professionals and many executive directors, the role of boards of directors is well understood. But outside of this group, awareness of the role of boards, and what makes them distinctive, could be improved. For example, in the context of collaborative working in local systems, the term 'board' is used increasingly to describe standing meetings of senior leaders rather than the directors of a body corporate. Unfortunately this use of language can be misleading, but it also serves to undermine widespread understanding of the role, responsibilities and composition of actual boards. So what are boards and why do we have board-led organisations?

The Composition

Boards are quite deliberately made up of a mix of executive directors and NEDs with independent NEDs in the majority and a balance in power between the non-executive chair and the chief executive. This mix brings outside expertise and independence to the boardroom which brings diversity of experience and opinion and helps guard against the dangers of group-think. Boards are constructed in a way that generates a dynamic constructive tension that acts as a bulwark against complacency and promotes robust debate.

In the UK the requirement for boards is derived in two ways - through legislation and through codes of governance based on experience. English company law is based on common law duties. The latest iteration of company law is the Companies Act 2006. One of the less controversial aspects of the Health and Social Care Act 2012 was to codify, for the first time, the role of foundation trust boards of directors by saying: “The general duty of the board of directors, and of each director individually, is 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”. The way in which NHS provider boards exercise this duty, once again like their private sector counterparts, is through corporate governance: a methodology put into action, not a set of rules, procedures or committee structures.

Corporate Governance

The first iteration of the UK code of governance setting out how boards should approach corporate...

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