NHS governance review 2013 Grant Thornton - Redesign of the HSS governance model - Redesign - 1 Aug

NHS GOVERNANCE REVIEW 2013

The formula for clear governance Finding the equilibrium

2012 highlights

We surveyed 60 NHS leaders and analysed over 100 annual reports of national health service organisations. These are the highlights of our findings:

Annual reports increased in length again and are now, on average, 175 pages for an FT, 75 pages for an NHS trust and 63

Two thirds (67%) of

pages for a PCT respondents believe the CEO

sets an organisation s tone;

just under half (49%) think

the chair performs this key

leadership role

Gender diversity in NHS

boards is setting the

standard with up to half

the board membership  Only 20% of respondents being female felt CCG governance

arrangements were well

developed and ready for implementation

More than half of respondents think there is a lack of transparency around collective

and individual board performance

Non-executive directors

(NEDs) are now in the

majority on the boards of  More than three quarters 83% of FTs and 73% of trusts (77%) of respondents

believe their audit committees are well placed to deal with changing risks

Almost all (95%)

respondents are considering

alternative models of  A quarter of PCTs failed to service delivery adequately describe the

impact of CCGs and only 11% Financial risks and  disclosed their start-up costs in

financial governance are  the annual report increasingly in the spotlight, but

the going concern assertion

is not described in 11% of FT,

71% of trust and 93% of PCT

annual reports

Contents

Executive summary  2 Leadership  6 Non-executive directors and governors  14 Quality and quality governance  25 Risks and performance  29 Audit and assurance  32 Commissioner reforms  37 Communicating effectively  43 About us  47 Contact us  48

Methodology

Our data analysis is based on over 100 2011/12 NHS annual reports and this year we have  expanded our review to include primary care trusts (PCTs). We also received more than 60 survey  responses from NHS leaders to add comment to our objective data analysis. We set out our findings  against each type of NHS body, referred to as PCTs, trusts and FTs throughout this report.

This approach builds on our work from last year, giving us the unique opportunity to review the  evolution of NHS corporate governance and provide a comprehensive review of the state of  governance across the service.

[1]Executive summary

Welcome to Grant Thornton s annual review of governance in the National Health Service (NHS), part of our cross-sector analysis of UK governance practice.

The NHS is at a significant crossroads. In 2013, its challenges  Applying useful learnings

include:  This report is part of our wider review of corporate

• responding to the 2013 publication of the Francis reportgovernance and complements our similar reviews on the

on Mid Staffordshire NHS Foundation Trust FTSE 350, local government and charities.

• answering issues about the quality of care raised by the Our ambition for this comprehensive programme is to Care Quality Commission (CQC), Monitor and other enable organisations to improve governance by learning from health watchdogs other sectors and their peers, to the benefit of themselves and those they serve. Particularly for 2013, Monitor is

• adjusting to new commissioning arrangements introducing a new licence as part of this requirement.

• managing mounting financial pressures.

Finding the right formula for effective and embedded NHS provider licence

governance frameworks will be essential to meeting these

challenges and to ensuring NHS organisations progress Monitor is consulting on the new NHS provider licence[2], effectively, with the support of all their stakeholders. Good brought in through the Health and Social Care Act. It governance is essential to: sets out three components of governance in the licence:

• patients – because they depend on the quality of 1 Board leadership

judgements the NHS makes 2 Organisational management

• the public – as it inspires confidence that the best decisions 3 Quality governance.

are being taken for the right reasons, that the quality of

healthcare is protected and that public money is being Monitor also requires licencees to provide: "a corporate wisely spent governance statement by and on behalf of its Board

confirming compliance with this Condition as at the date

• clinicians – because it supports them in making the best

of the statement and anticipated compliance with this decisions, reduces the likelihood of things going wrong

Condition for the next financial year, specifying any risks and protects them when they do.

to compliance with this Condition in the next financial

Overall trends in reporting the chair must support the board and chief executive in This year, the quality of NHS governance reporting establishing and embedding shared values that can guide improved, with foundation trusts (FTs) making particular and support all staff through the transition. However, in our progress. As primary care trusts (PCTs) work towards survey, 67% of respondents felt it was the chief executive, new commissioning structures they have not invested in not the chair, who sets the tone, with the medical/nursing governance reporting and, consequently, demonstrate director and finance director in joint second place (51%). poorer standards in this area. Their successors, the clinical The chair fell into third place with 49%, just 2% ahead of commissioning groups (CCGs), will need to draw on non-executive directors (NEDs).

best practice from elsewhere, rather than relying on past

precedent, if they are to launch in 2012/13 with robust Accountability

reporting arrangements.

NHS governance reporting still needs greater

transparency, consistency and quality. There are many The board of directors of each NHS foundation trust (the board)

is accountable for its success or failure and must ensure that the examples of NHS organisations with strong governance

trust operates effectively, efficiently and economically.

frameworks across the country, yet on the basis of this year's

review, the reporting of these arrangements often does the Monitor s Compliance Framework 2012/13, Introduction,

Paragraph 12

NHS a disservice.

The fact that more than one third of respondents think Leadership NHS corporate structures could be improved, suggests that Leadership is a key feature of effective governance. NHS accountability, too, has some way to go.

leaders will need to direct their organisations wisely and The number of board meetings per year remained static. ethically through tough challenges in the years ahead. However, there was a marked increase in the frequency of

It has been three years since the Healthcare Commissionkey committee meetings, such as those dealing with quality, linked poor leadership and NHS failure in its published risk and finance. Disclosures on board meetings and investigation into Mid Staffordshire NHS Foundation Trust: attendance have improved, although PCTs lag behind.

"We have drawn together the different strands of numerous, More than half of respondents perceived a

wide-ranging and serious findings about the trust which, lack of transparency on both collective and individual board when brought together, we consider amount to significant performance. Despite a small improvement, the transparency failings in the provision of emergency healthcare and in theof performance management arrangements and links to leadership and management of the trust We had previouslyexecutive pay remain weak.

raised concerns with Monitor about the leadership of the In December 2012, the Department of Health published trust, and we note that both the chair and chief executive have its final report into Winterbourne View Hospital3. Included

left the trust in the two weeks leading up to the publicationin the lessons learnt is a proposal to strengthen the

of this report"[3]. accountability of the board, and senior managers, against Chairs hold a prime leadership responsibility for setting the quality of care provided. The annual report, including

the tone of governance and ensuring the correct values are transparency on the performance evaluation of the board championed. As NHS organisations face radical change, and its directors, is a crucial tool for boards to be

demonstrate accountability.

Executive summary

NEDs and governors Quality governance

The ratio of NEDs on NHS boards has increased,  Quality, similarly, must not be diluted in new partnership providing a more balanced board. Positively, 81% of survey arrangements. Almost nine out of 10 (89%) respondents respondents thought NEDs offered an effective challenge.  believe their quality governance arrangements have

We advise NHS bodies to make good use of NEDs' demonstrably improved patient care. We urge bodies to commercial skills and experience in the new, more review this assertion to ensure it reflects true conviction that commercial healthcare environment. stands up to transparency and scrutiny and can be supported

Women continue to have a strong foothold at board level,by clear performance data.

holding between 37% and 49% of voting positions. FTs are far more likely than trusts to publish their quality

Councils of governors are becoming increasingly reports within the annual report: 89% compared with

effective. However, to hold boards to account, they will 11%. Of those organisations that publish the quality report need to keep in step with organisational change – and receiveseparately, less than half tell readers where copies can be improved performance evaluation data. obtained. This is a barrier to accessibility and transparency.

Financial governance Risks and performance

Against a background of pressure from exacting savings Robust risk reporting and management are crucial to

targets, financial resilience and going concern disclosures  retaining public confidence and effective management.

have improved. Eighty-four per cent of FTs and 26% of Our review suggests NHS risk reporting still needs

trusts described the rationale for regarding the trust as a to improve.

going concern, however no PCT made this disclosure, or Once again, organisations' internal risk reporting systems referred to the going concern of their services into the future.and their annual reports are not telling the same story.

Almost all (95%) of our survey respondents are This year, there were again inconsistencies between the considering alternative models of service delivery. More than different vehicles, with the annual report often playing down risk. four out of five (83%) expect to use special purpose vehicles. NHS bodies must present key performance indicators

As public services evolve, accountability must remain a  (KPIs) and other measures of success clearly, to hold the core principle. board to account. We found FTs and trusts used a broad

spread of financial and non-financial indicators; PCTs had a much narrower focus.

Once again, organisations internal risk reporting  Financial risk is, unsurprisingly, the key perceived risk systems and their annual reports are not telling the  facing the NHS, far above quality (in second place) and

same story. operational performance (in third). Most FTs improved their

financial risk ratings (FRRs) and governance risk ratings (GRRs), but an increasing number have FRRs of one or two and GRRs of red or amber-to-red. These organisations are in danger of being left behind and of having to find alternative solutions to survive.

Executive summary

Audit and assurance Annual reports

There was a significant improvement in audit committee Four out of five (80%) respondents believe the annual report disclosures and more than 78% of respondents believe their is an important way to communicate key information to

audit committees are well placed to deal with changing risks.stakeholders. Yet, this year, annual reports again increased

However, according to the annual report, internal audit isin length, and are now, on average, 175 pages for an FT receiving less attention: FT audit committee monitoring  (2011: 151) and 75 pages for an NHS trust (2011: 59).

of the function's effectiveness fell by 10% to 78%, although In part, this increase is the result of regulatory

our experience at audit committees suggests the true positionrequirements. However, we feel annual reports still

to be better. contain a significant amount of clutter' that obscures key

Clinical audit is being overlooked even further: only messages and detracts from transparent and high quality

43% of FTs and 26% of trusts included disclosures on auditcorporate reporting.

committee oversight of clinical audit.

Health reforms

Outgoing PCTs have not set a comparably high standard for governance reporting for their CCG successors to follow.

A quarter (25%) of PCT annual reports failed to adequately describe the impact CCGs would have and only 11% disclosed the set-up costs incurred.

There is concern about the readiness and effectiveness of nascent CCG boards: just 20% of respondents think they are fit to launch. Our analysis shows boards are inconsistent in balance and composition and many still have vacant posts.

There is concern about the readiness and effectiveness  of nascent CCG boards: just 20% of respondents  think they are fit to launch.

Leadership

Nationwide changes in the NHS require strong and principled leadership from board chairs, but our survey suggests that many have not seized the governance mantle.

Effective governance requires the right organisational culture They must also ensure employees can identify with the

and principled individual behaviour: it is NHS leaders' values and are able to explain how they influence their work. responsibility to embed such attributes by setting the right Leadership was recognised by our survey respondents as a tone. Leaders need to live and breathe their organisation's fundamental feature of effective governance, but crucially

values and be able to set out, in simple terms, their core was also identified as a key area in need of improvement. strategic principles.

NHS governance themes and challenges from our survey

Features of  Barriers to effective governance improvement

• Leadership • Time, people & money

• Structure • Regulatory

• Clinical engagement • Distracted by

• Openness and operational pressures transparency

• Accountability

Focus areas for governance improvement

• Leadership

• Structure

• Clinical engagement

Survey response

 With clarity and focus on our underlying purpose governance is how we make sure we do what we re here to do.

The role of the chair IN YOUR ORGANISATION, WHICH INDIVIDUAL(S) SETS THE TONE Chairs have a crucial role in setting the right tone and FOR GOVERNANCE?

achieving cultural change. Chief executive   67% Medical/nursing director  51%

As the public s primary representative inside the  Finance director  51%

49% boardroom, the chair must ensure the right thing is  Trust chair  46%

always the done thing. Non executive dirTrust secretary ectors   30% Internal audit   23%

In the face of severe financial challenges and ever- Other (please specify)   15% increasing expectations on service availability, NHS

organisations are increasingly required to make difficult

decisions and continue to face pressure, to put cost savings

first. As the public's primary representative inside the Survey response

boardroom, the chair must ensure the right thing is always How does this individual set the tone for governance?

the done thing.

That is not to say that the chair can do it alone. No chair Takes responsibility at board level and drives the

– not even the most passionate governance advocate – can tone through the goals and values of the trust. embed ethical principles and effective practices without

support from other senior figures, particularly the chief Walking the walk, not just talking the talk. executive and trust secretary. Less acceptance of status quo as a sign of all is well.

Overall our survey shows that – in the perception of

respondents at least – the natural order' of leadership is

inverted: 67% of respondents felt it was actually the chief What do we expect from executivemedical/nursingwho wasdirectorresponsibleand financefor settingdirectorthetone,injointwithsecondthe the chair?

place (51%). The chair fell into third place (49%), only

marginally ahead of NEDs (47%). •  Set the tone – with internal and external stakeholders,

These perceptions raise the question of whether chairs supported by tools such as the Department of Health's and trust secretaries/directors of governance are taking (DH) Board to Ward guidance, to open honest sufficiently active governance roles within their boards. dialogue with frontline staff

• Collaborate –with the chief executive, to embed

values and governance

Effective self-governance sits at the heart of the Compliance

Framework. The board takes primary responsibility for  • Partner – with clinical leads, to support clinical compliance with the Authorisation. The chair of an NHS foundation  engagement and engender a sense of shared purpose trust should ensure that the board monitors the performance of  • Support – the trust secretary/director of governance to the trust effectively and satisfies itself that appropriate action is  implement effective and robust governance structures taken to remedy problems as they arise.

• Publish – their annual report introduction to outline,

Monitor Paragraph 12s Compliance Framework 2012/13, Introduction,  honestly, how they set the tone for governance and

oversee the embedding of the organisation's values

The annual reports of 80% of trusts (up from 45%), 83% ofIN ENSURING CLEAR LINES OF ACCOUNTABILITY, HOW EFFECTIVE DO FTs (slightly down from 87%) and 86% of PCTs describe YOU THINK YOUR ORGANISATION S CORPORATE STRUCTURES ARE?

how the board operates and how its duties are discharged. Needs considerable   0%

improvement

An improvement in transparency is a positive step, but, as

Needs improvement  34%

more than one third (34%) of those surveyed agreed, there isEffective  56%

still a need to strengthen corporate structures. Very effective   10%

Disclosures on board meetings and attendance

statistics have got better, but quality could improve further. THE PROPORTION OF REPORTS IN WHICH BOTH THE NUMBER

For example, most trusts and PCTs do not indicate the levelOF MEETINGS OF THE BOARD AND COMMITTEES AND OVERALL

of attendance at regular meetings – a fundamental of FTSEATTENDANCE IS DISCLOSED

350 disclosures. FTs  Trusts  PCTs  FTSE 350

The number of board meetings remained static, year- 2012  91%

on-year, while quality, risk and finance committee activity 41%

4% increased substantially. Quantity does not, however, 99%

always equate to quality. As 34% are dissatisfied with the

effectiveness of corporate structures, we recommend that 2011  73%10%

boards assess the value of meetings. Boards may also ask not collected

whether the increase in sub-committee meetings has led to 100%

shorter board meetings that focus on strategy.

Reporting board meetings Accountability and transparency are not

just characteristics of good leadership, they Annual reports should include: are vital to maintaining public faith in the

• a simple info-graphic on the board and sub-committees, showing quality and sustainability of NHS services. the chair of each, to demonstrate the governance framework

• tabular layout of committee meetings and attendance records.

CCG boards in development

Questions to consider on  Respondents revealed a high level of concern about

board meetings emerging CCGs' corporate structures and readiness

for implementation. Eighty per cent felt governance arrangements were not sufficiently developed.

• Has the increase in sub-committee meetings led to

Seventy two per cent felt the proposed membership and shorter board meetings and allowed the board to

size of CCG boards would not support effective governance. focus on strategic issues?

(Each CCG board requires a chair, an accountable officer,

• When was the delegated authority for decision a CFO, two lay members, a nurse, a medical director and a making last reviewed? secondary care clinician.)

• When was the last time the effectiveness of key Our own analysis of CCG boards, which still have many committees last tested? unfilled executive and lay posts, found much variance in practice with board members ranging from six to 25. There was little

• NED time commitment is heavy: the NHS Trust

correlation between board size and population served. Development Agency estimates the role requires

At this important crossroads in the evolution of NHS

at least 2.5 days per month – are board meetings

commissioning, it is important for CCGs to focus on core focused enough to enable the best use of NEDs'

governance principles to identify the most effective form of time?

governance. A reflect and refresh' review during 2013/14, to

• Is the rise in the number of meetings driven by an test whether arrangements are proving fit for purpose, is also increase in business? recommended.

The effective board

• Clear strategy aligned to capabilities

• Vigorous implementation of strategy

• Key performance drivers monitored

• Effective risk management

• Sharp focus on views of key stakeholders

• Diverse membership

• Healthy, constructive tension

• Regular evaluation of board performance

TO WHAT EXTENT DO YOU AGREE WITH THE FOLLOWING STATEMENT: GOVERNANCE ARRANGEMENTS FOR OUR CCG ARE WELL DEVELOPED AND READY FOR IMPLEMENTATION ?

Strongly disagree  35% Tend to disagree 45% Tend to agree  20% Strongly agree  0%

TO WHAT EXTENT DO YOU AGREE WITH THE FOLLOWING STATEMENT: THE PROPOSED MAKE-UP AND SIZE OF CCG BOARDS WILL SUPPORT EFFECTIVE GOVERNANCE ?

Strongly disagree  14% Tend to disagree  57% Tend to agree  29% Strongly agree  0%

9

Board evaluation and accountability

Accountability Adjective

1  Required or expected to justify actions or decisions;

responsible

2  Able to be explained or understood Oxford English Dictionary

HOW MUCH EXPLANATION IS THERE OF HOW THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS ARE ANNUALLY FORMALLY EVALUATED FOR THEIR PERFORMANCE?

 FTs  Trusts  PCTs

Not at all  6% 56%

68%

To some  55% degree  37% 32%

To a  28% reasonable  7%

Accountability and transparency are not just characteristics degree  0% of good leadership, they are vital to maintaining public faithDone well  11%

in the quality and sustainability of NHS services. 0% 0%

Explanations that boards, committees and individual

directors were evaluated have improved significantly. In 2012,Standard  0% 6% of FTs and 56% of trusts were silent on this, down fromsetting  0%

0% 34% and 79%, respectively. This brings FTs closer to the

large corporate sector, where only 3% failed to provide any

explanation on performance evaluation.

However, few NHS organisations articulated in

their annual reports how performance was measured,

either for individuals, or the full board: this area needs

significant development.

10   CORPORATE GOVERNANCE REVIEW 2012

We believe disclosure should cover all board members, not THE NON-EXECUTIVE DIRECTORS (OR GOVERNORS) MEET just executives. Such transparency would both instil public WITHOUT THE CHAIR AT LEAST ANNUALLY TO APPRAISE THE confidence in leadership and enable councils of governors toCHAIR S PERFORMANCE

hold boards to account.

THE ANNUAL REPORT EXPLAINS WHETHER AN EXTERNAL  81 % EVALUATION OF BOARD EFFECTIVENESS HAS BEEN CARRIED OUT 2012

36% FTSE350 2012

2012 FTs

43% 80%

28% 17% 4% 35% 2011 2011

FTs FTSE350 FTs Trusts PCTs FTSE350

THE NON-EXECUTIVE DIRECTORS (OR GOVERNORS) MEET WITHOUT

THE CHIEF EXECUTIVE AT LEAST ANNUALLY TO APPRAISE THE CHIEF OUR ORGANISATION PROVIDES SUFFICIENT PUBLIC INFORMATION  EXECUTIVE S PERFORMANCE

ON HOW THE BOARD AND INDIVIDUAL DIRECTORS ARE ANNUALLY  

FORMALLY EVALUATED FOR THEIR PERFORMANCE FTs  Trusts    PCTs

Strongly disagree  6% 2012  23%

15% Tend to disagree  50%

0% Tend to agree  35%

Strongly agree  9% 2011  22% 2%

 not collected

Remuneration and performance appraisal IT IS STATED THAT THE BOARD (OR GOVERNORS WHERE REQUIRED) SET Effective and transparent disclosure on executive pay THE REMUNERATION FOR THE NON-EXECUTIVE DIRECTORS [FT ONLY]

and performance is a key ingredient in good corporate FTs  FTSE 350

governance. The recent furore over the package awarded

to the outgoing BBC director general after his 54 days in

office, shows the level of public sensitivity about executive

reward. If the NHS is not open about board performance  

and remuneration, and details leak out, there could be a

damaging backlash. In 2013, we would expect transparent 69% 77% 94%

reporting of executive pay and severance arrangements, 2012 2011 2011

particularly in PCTs.

Organisations are becoming more open about the

performance evaluation of chairs and chief executives.

This year, 80% of FTs disclosed appraisal information

on their chairs, more than double the 2011 ratio (40%).

And 81% of FTs and 24% of NHS trusts provided basic THERECOMMITTEE IS A DESCRIPTION, INCLUDING THE OF  THEPROCESSWORKITOFHASTHEUSEDNOMINAIN RELATIONTION TO disclosures about their chief executives' evaluation, up from BOARD APPOINTMENTS [FT ONLY]

31% and 15%.

However, the standard and quality of performance

disclosures still leave room for improvement. 8%

DETAIL PROVIDED ON THE PROCESS OF APPRAISING THE CHAIR 28 %

Not at all

 To some degree 32%   To a reasonable

degree

 Done well

32%

DETAIL PROVIDED ON THE PROCESS OF APPRAISING THE CHIEF EXECUTIVE

CHIEF EXECUTIVE £ 000

 FTs  Trusts

Salary and  158 allowances   163

Performance  7 related bonus  10

Non cash  28 benefits*  12

FINANCE DIRECTOR £ 000

Salary and  114 allowances  118

Performance  6 related bonus  2

Non cash  50 benefits  10

MEDICAL DIRECTOR £ 000

Salary and  117 allowances  100

Performance  89 related bonus  55

Non cash  28 benefits  6

NURSING DIRECTOR £ 000

Salary and  97 allowances  92

Performance  2 related bonus  1

Non cash  16 benefits  6

CHIEF OPERATING OFFICER £ 000

Salary and  104 allowances  92

Changes planned for quoted companies

Remuneration reports will be split into two sections: one detailing proposed future policy for executive pay, the other setting out how pay policy was implemented in the preceding year.

Organisations are becoming more open about the performance evaluation of chairs and chief executives.

+ pressure on NHS finances

+ large

bonuses

Public perception

(minus) transparency

= combustible cocktail

Performance  16 related bonus  3

Non cash  3 benefits  1

OTHER DIRECTORS £ 000

Salary and  78 allowances  69

Performance  17 related bonus  11

Non cash  14 benefits  10

* Relates throughout to benefits in kind, eg car allowance.

Non-executive directors and governors

Boards have been strengthened across many organisations, with more non-executive directors and strong female representation. However, PCTs have lagged behind.

Non-executive directors AT LEAST HALF THE VOTING BOARD (EXCLUDING THE NHS boards, like all others, need non-executive balance CHAIR) CONSISTS OF INDEPENDENT NON-EXECUTIVE and diversity to do their jobs effectively. NEDs are now DIRECTORS

in the majority on the boards of 83% of FTs and 73% of

trusts, bringing greater independent scrutiny and breadth

of experience to the board.

All NHS bodies should review their boards to  

see whether they have the right composition  

to progress forward not just sustain historic  

performance.

80%

2011

81%

2012

54% PCTs

2012 FTSE 350

Not collected

2011

83% 520119%

2012

FTs

Trusts

67%

2011

73%

2012

Composition This year, board numbers increased. This expansion makes

Last year, NEDs were in the minority on 41% of FT boardsit even more important to justify and measure the value each and 33% of trust boards. This year, the NED imbalance hasmember brings.

reduced to 16% at FTs and 27% at trusts. The picture is notA slight fall in the number of associate directors was offset so positive for PCTs, where NEDs remain the minority in by a rise in the number of executive directors: the latter may 46% of cases. reflect a desire for additional experience or expertise, or talent

All NHS bodies should review their boards to see retention. There was also a rise in the number of NEDs. whether they have the right composition to progress forward FTs have made considerable improvements in disclosures

– not just sustain historic performance. This is particularly relating to the independence of their NEDs: only 9% now pressing for CCGs, which need to consider carefully whethermake no commentary on this, down from 30%. However,

the governance models adopted from legacy PCTs offer we suggest that trusts and PCTs, which trail behind, should sufficient independent challenge. review their approach.

HOW WELL TRUSTS DESCRIBE THE CONSIDERATION OF

INDEPENDENCE OF THEIR NEDS Eighty-one per cent of our respondents thought  FTs  Trusts  PCTs  NEDs offered an effective challenge at board

meetings. NHS bodies would be well advised to Not at all  46%9% make good use of this resource.

57%

To some  43% degree  27% 22%

To a  40% reasonable  24% degree  21%

Done well  9% 2%  

0%

Standard  0% setting  0% 0%

HOW CHALLENGING DO YOU THINK NEDS ARE AT BOARD MEETINGS?Diversity

Needs considerable   5% Board diversity is another component of good governance: improvement  not just around gender balance, but also in reflecting different Needs improvement  14% skills, experience, ethnicity and mindsets.

Effective  52% The NHS board gender balance continues to outshine

Very effective  29%

the business sector, with between 37% and 49% of voting

positions occupied by women, compared to 11% on large

corporate boards. The EU has proposed that, by 2020, 40% Reporting on NEDs and governors of NEDs in listed companies should be women: in this, the

NHS is leading the way.

• Explain the value your NEDs bring rather than just

listing their experience PERCENTAGE OF VOTING BOARD THAT ARE FEMALE

• Describe clearly how NEDs maintain their FTs  Trusts  PCTs  FTSE350

independence 2012  48%

• If NEDs are in the minority, acknowledge this is a  37%49%

risk and explain how it will be managed 11%

• Explain how NEDs hold the board to account,  2011  35% which committees they attend and how often 34%

10%

• Explain the relationship between the board and  10% council of governors

PERCENTAGE OF FEMALE CHAIRS

 FTs  Trusts  PCTs  FTSE350

2012  36% 22%

39% 1%

2011  34% 14%

not collected 1%

PERCENTAGE OF FEMALE CHIEF EXECUTIVES

 FTs  Trusts  PCTs

2012  30% 44%

32%

However, further work could be done to reflect overall

diversity in the wider workplace, including providing clarity Reporting broader diversity

on equal pay, to instil stakeholder confidence in the NHS as a

local and national employer. • Draft a statement of employee diversity, including

Diversity is not just about women on boards, but gender analysis of workforce composition