Member Article

Review of corporate governance reveals lack of transparency

As the NHS adapts to financial pressures, new commissioning models and independent reports on patient care quality, a review by leading business and financial advisory firm, Grant Thornton, explores the critical role of governance in ensuring clear leadership, the provision of safe and high quality services and commercial success. More than half of NHS leaders feel there is a lack of transparency around collective and individual board performance; only 49% believe the chairs of trusts are providing the right leadership tone for their organisations. In ensuring clear lines of accountability, 34% feel there is room for improvement in their organisation’s corporate structures.

While the move to new commission structures is currently in a state of transition, only 20% of NHS leaders feel that governance arrangements for the forthcoming clinical commissioning groups (CCGs) are well developed and ready for implementation. In their annual reports, a quarter of primary care trusts have been unable to describe the impact of CCGs on their operations and only 11% have disclosed the costs for transitioning to this new model. When asked to cite the main challenges of the move to CCGs, the highest rated response (57%) was a lack of knowledge around the transitioning process.

There are, however, signs that NHS bodies are adopting best practice from the private sector. Non-executive directors are now on the boards of 83% of foundation trusts and 73% of NHS trusts. Over three-quarters (77%) believe their audit committees are well-placed to deal with changing risks. The scope and depth of annual reports is also increasing, with the average length of foundation trust reports increasing by 24 pages and by 16 pages for NHS trusts compared to 2011.

NHS bodies are also setting the standard for gender diversity, with between 37% and 49% of voting positions on boards occupied by women compared to 11% in the private sector.

“Trust and confidence in public bodies is high on the public agenda at the moment and transparent, effective governance is particularly important for the NHS over the next few years,” explains Mark Burke, partner for public sector advisory at Grant Thornton in Yorkshire and the North East. “Good governance has an impact on the quality of care given to patients; it inspires confidence that public money is being wisely invested and supports and protects clinicians in their decisions.”

Mr Burke continues, “There are positive signs that NHS trusts are strengthening annual reporting, benefiting from non-executive expertise and championing gender diversity. However, there is a real need to prepare for new commissioning models. Clinical commissioning groups will empower those closest to patient care to make decisions but it will require effective governance to ensure successful spending and collaboration between doctors, nurses, trusts and the private sector.”

The review by Grant Thornton UK LLP is part of a comprehensive annual analysis of corporate governance amongst the FTSE 350, local government, charities and the NHS. When comparing different organisations, it is clear that governance reporting is not uniform across the NHS and there is a need for greater transparency, consistency and quality across the UK. Clearer leadership from the chairs of NHS bodies will also be vital in guiding their organisations through the significant changes in the sector.

To receive a copy of the Grant Thornton NHS Governance Report 2013, please contact Sandra O’Neill on (0113) 245 5514.

This was posted in Bdaily's Members' News section by Grant Thornton .