Session 2: The governance landscape and theoretical frameworks - PowerPoint PPT Presentation

Session 2: The governance landscape and theoretical frameworks Claire Lea, Thursday 14 September 2017, 4pm My microphone is currently muted

Record session

Session 2: The governance landscape and theoretical frameworks Claire Lea, Thursday 14 September 2017, 4pm

Structure and timings • Presentation length: 45-50 minutes • Questions • Technical issues and sound check • Slides, recording and preparation • Handbook and PDF student guide

The study text

The student guide

The governance landscape and theoretical frameworks

Today’s plan • Introduction • Definitions and issues in governance • Definitions and issues in health service governance • Theoretical frameworks • Sample exam question

Defining governance • Governance: the concepts of governance which are generally applicable regardless of landscape. • Corporate governance: the governance applied to the corporate commercial business world, including public and private companies. • Health service governance: the governance applied to NHS organisations. • Public sector governance: the governance applied across the wider public sector including the NHS.

The difference between governance and management In the chat box, please describe how you would see the difference between governance and management?

The difference between governance and management

The Governance Landscape “Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.” (Sir Adrian Cadbury, UK, Commission Report: Corporate Governance 1992)

The balance of power

Setting objectives for an NHS organisation In your view what are the main objectives for an NHS organisation? Who will come out on top?

Corporate Governance

Key issues in governance Transparent reporting and auditing Exercise of board-level power Risk management Stakeholder engagement Corporate social responsibility

Corporate Governance Voluntary codes such as: • UK Corporate Governance Code (updated June 2016) • Higgs Review & Improving Board Effectiveness • Smith Report & FRC Guidance on Audit Committees • Turnbull Report • FRC: Corporate Culture and the Role of Boards (2016) • King Code III & IV • The Davies Report 2011/2013/2015

Health Service Governance Voluntary codes such as: • Nolan Principles & NHS Board Standards • The Good Governance Standard for Public Services • The Intelligent Board • Integrated Governance Handbook • FT Code of Governance • Healthy NHS Board • Taking it on Trust • Well-Led Framework

Definitions and issues in health service governance ‘Health service governance is the system by which NHS organisations are directed and controlled. Boards of directors or governing bodies are responsible for the governance of their organisations. The stakeholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board or governing body include setting the organisation’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to stakeholders on their stewardship. The actions of the board or governing body are subject to laws, regulations and the stakeholders

When it all goes wrong - Can you describe aspects of poor governance? ‘Governance is sometimes regarded as an obscure subject, not necessarily visible in its own right, but it becomes a high-profile reputation issue when it is found lacking. At its core, delivering good governance is about strong, dynamic leadership and it should not be the preserve of “governance specialists” or experts, nor should it be driven by compliance with processes alone. Corporate governance is about leadership and is the system by which all board-led organisations across the public and private sectors are directed and controlled including NHS foundation trusts and NHS trusts.’ NHS Providers and Beachcroft LLP - The Foundations of Good Governance: A Compendium of Best Practice

NHS Constitution • Principles • Values • Patient rights and pledges • Patient and public responsibilities • Staff rights and responsibilities

Five Year Forward View and Dalton Review

STPs and new models of care Chris Hopson, CEO of NHS Providers, states: ‘If we are to move to new care models, adopt new integrated organisational forms and deliver services effectively across a wider geographic footprint, then we have to ensure the governance of service delivery and the accountability for that service delivery remain robust and effective. This means maintaining our investment in good corporate governance by organisations, but also developing a more robust approach to governance between organisations and being clearer on lines of accountability at the local system level.’

Governance issues for STPs and new models of care • Accountability • Patient and public engagement • Relationships with local government • Tension between speed, openness and transparency • Preserving the clinical voice • Independent scrutiny • Audit and assurance

Theoretical frameworks In your study of the student guide – what theoretical frameworks have you been introduced to?

Theories to consider • Stakeholder theory • Agency theory • Stewardship theory • Transaction cost theory • Policy governance theory • Generative governance model

Past question - (a) Outline the theoretical frameworks for corporate governance. Discuss the strengths and weaknesses of three of these frameworks in relation to health service governance. (18 marks) (b) List the range of external and internal stakeholders which NHS organisations need to engage with. Choose one external stakeholder and one internal stakeholder and explain why it is important to engage with them. (7 marks) Examiner’s comments Question 2 (June 2016) was the least popular question and asked candidates to discuss theoretical frameworks for corporate governance and to then apply them to the NHS context. All of the candidates who attempted this question passed with a high level of mark; 50% of candidates scored a Merit and 25% a Distinction. Candidates did particularly well at describing the frameworks and their applications to the NHS.

Suggested answer (a) In order to discuss their application to health service governance three theories have been set out below, setting out their strengths and weaknesses in relation to health service governance. Stakeholder theory - Brief description the purpose of governance should be to satisfy, as far as possible, the objectives of all key stakeholders – employees, investors, major suppliers and creditors, customers, the government, local communities and the general public. The board of directors should therefore consider the interests of all the major stakeholders. However, some stakeholders are more important than others, so management should give priority to their interests above the interests of other stakeholder groups.

Suggested answer (a) Strengths • trying to achieve a range of different objectives, because different stakeholders each have their own (different) expectations of the organisation, which the organisation’s management should attempt to satisfy. • considers the role of organisations in society, and the responsibility that they should have towards society as a whole. • The general public are taxpayers and as such they provide the economic and social infrastructure within which NHS organisations are allowed to operate. • NHS is so large, and uses tax payers money so its influence on society is so strong, therefore, they should be accountable to the public for what they do.

Suggested answer (a) Weaknesses • Are the different objectives of each stakeholder clear? • How does the NHS organisation gain a view as to responsibility to society as a whole? • How is the balance between local demands and national requirements balanced?

Suggested answer (b) External stakeholders include the following: Other NHS providers locally Other Any Qualified Providers locally Clinical Commissioning Groups Local Community groups Health and Well-being Boards Voluntary agencies Professional bodies Regional representatives of NHSE Care Quality Commission NHSI Local authorities or councils Local HealthWatch groups Overview and Scrutiny Committee Internal stakeholders might include: Staff Patients and their families Governors Members Patient focus groups or their equivalents Please note that this list is not exhaustive and additional valid responses would be recognised.

Following this session… • Your chance to ask questions • Slides and recording • LinkedIn forum • Session 3: Wednesday 20 September, 4pm. Link to follow • Reminder: exam entry deadline/deferral for November is 1 October

Thank you