Integrated Governance Framework

Approved by: Board of Directors

Date: XXXX

Overview

This document presents the agreed comprehensive intergrated governance framework for the Trust.

This document sets out:-

  • The aims and objectives of governance in the Trust, together with structures and processes which will be in place to successfully deliver corporate and quality governance in an integrated manner.
  • How risk management sits within the Trust’s governance framework and, in particular, the co-ordination of risk management across clinical and corporate areas.
  • How governance and accountability links into the Trust Executive and performance management arrangements.

Prime responsibility for governance rests with the Board of Directors.

Contents

  1. Introduction

1.1‘Integrated governance’ is described by the Department of Health’s ‘Integrated Governance Handbook’ (2006) as “systems, processes and behaviours by which trusts lead, direct and control their functions, in order to achieve organisational objectives, safety and quality of service and in which they relate to patients and carers, the wider community and partner organisations”.

1.2In Oxford Health NHS Foundation Trust (the ‘Trust), integrated governance is about the integration of the corporate and quality governance, and risk and performance management in order to give the Board of Directors and key stakeholders assurance regarding the services that the Trust provides.

1.3As an NHS foundation trust (FT) we are subject to scrutiny by a number of bodies. Some have statutory standard-setting, inspection, monitoring and, in some cases, enforcement powers. Other bodies have a statutory role but lack the powers to enforce compliance. There are also bodies with no statutory powers over FTs but which may have a legitimate interest in their operations. The table below sets out some of the bodies with which the Trust has a relationship. The bodies shown are indicative and the list is not exhaustive.

1.4FTs are expected to meet their statutory obligations towards all such bodies and abide by their duty to co-operate with NHS bodies and local authorities. The board of each FT is responsible for the success or failure of the FT and must ensure that it operates effectively, efficiently and economically. The board must decide how best to organise and manage the FT to optimise the way in which they deliver services. The board must monitor the performance of the Trust in an effective way and satisfy itself that appropriate action is taken to remedy problems as they arise. This document sets out the integrated governance framework within which the FT shall manage the internal control mechanisms needed to ensure it delivers its responsibilities.

  1. National Context – Strategic

Corporate Governance

2.1The term ‘corporate governance’ is used here to mean the system and processes by which an organisation is directed and controlled to achieve its objectives and meet the standards of accountability, probity and openness.

2.2The corporate governance framework started to develop in the early 1990s, following a series of corporate failures, major frauds, management and administrative failings, in both the private and public sectors. In response a series of governance reviews took place including:-

  • The Cadbury Report (1992)
  • The Greenbury Report (1995)
  • The Hample Report (1998)
  • The Smith Report (2003)
  • The Turnbull Report (2005)

2.3Following the Cadbury Report, which established the basis for UK corporate governance, the further reviews focussed on remuneration, board balance and composition, role of the audit committee, role of non-executive directors, and risk management. These all helped inform the development of the ‘Combined Code of Corporate Governance’ which, following review in 2010, became the ‘UK Corporate Governance Code’.

2.4Alongside this, following the early reports on governance failings, in 1994 the ‘Corporate Governance Task Force’ developed four guiding principles which would underpin corporate governance in the NHS:-

  • Accountability - Stand the test of Parliamentary scrutiny, public judgement and professional codes of conduct
  • Probity - Absolute standard of honesty
  • Integrity - Hallmark of all professional conduct
  • Openness - Sufficient transparency to promote confidence

Furthermore, in 1995 the Nolan Principles, which are the basis of the ethical standards expected of public office holders were first published:-

  • Selflessness
  • Integrity
  • Objectivity
  • Accountability
  • Openness
  • Honesty
  • Leadership

2.5More recently, governance in the public sector and NHS was the focus of a number of reports including:-

  • The Intelligent Board (2006) – considered board level information
  • The Integrated Governance Handbook (2006) – considered the requirements of sound governance
  • The Intelligent Board – modernising mental health services (2007) – focussed on the role of the board in mental health trusts
  • The Healthy NHS Board: Principles for Good Governance (2013) – set out the principles of high quality governance

2.6There followed a series of governance developments, which the Trusthas implemented in full. These include:-

  • Standing Orders and Standing Financial Instructions
  • Requirement for a board of directors comprised of certain executive director posts
  • Establishment of a committee structure to include an Audit Committee
  • Appointment of Internal and External Auditors
  • Introduction of Codes of Conduct and Accountability
  • Designation of Chief Executive as ‘Accounting Officer’
  • Comprehensive review and improvement of internal audit standards and provision
  • Annual Governance Statement
  • Business Planning
  • Board Assurance Framework & risk management arrangements

2.7Since 1997/98 all Chief Executives have been required, as the ‘accounting officer’, to sign the Annual Governance Statement (formerly known as the Statement of Internal Control), an assurance statement, on behalf of the board of directors to assure its stakeholders on internal controls (both financial and non-financial controls).

2.8Finally, with the creation of FTs from 2004, Monitor has published ‘The NHS Foundation Trust Code of Governance’ in 2014. First published in 2006, this code provides guidance to FTs to help them deliver effective corporate governance arrangements, contribute to organisational performance and discharge duties in the best interest of patients. The Code is best practice advice; it is not mandatory guidance. It is well established in the UK that governance arrangements need to be dynamic and proportionate to the size and scope of an organisation; accordingly, there is an acceptance that there may be circumstances that warrant divergence from codes of best practice. Known as ‘comply or explain’, where an organisation does not comply with governance code provisions then they must explain their reasons why it is appropriate to make different arrangements. The Monitor code for FTs adopts the same principle with FTs expected to explain non-compliance in annual reports.

2.9Accordingly, the main principle of the corporate governance codes (both private and public) is that organisations should be headed by an effective board which is collectively responsible for the success of the organisation. A board’s role is to provide leadership within a framework of effective controls which enables risk to be assessed and managed.

NHS Foundation Trusts and Corporate Governance

2.10Under the National Health Service Act 2006, FTs are established as legal entities in the form of public benefit corporations. This legislation and the Health and Social Care Act 2012 provide FTs with a governance regime that is different from other NHS bodies (such as NHS trusts). Central to this regime is the FT board of directors having more autonomy to make strategic and financial decisions.

2.11The FT board of directors is a unitary board which means that both the non-executive directors and executive directors make decisions as a single group and share the same responsibility and liability.

2.12There is also a framework of local accountability for FT board of directors which replaces the central control from the Secretary of State for Health. All FTs are required to have a council of governors which is responsible for holding non-executive directors, individually and collectively, to account for the performance of the unitary board. In turn, the governors are accountable to the members who elect or appoint them and the governors must represent the interests of those and the public.

Quality Governance

2.13The ‘NHS Next Stage Review: Leading Local Change’ set out that, for the NHS, quality comprised three elements (all of which must be present):-

  • Effectiveness of the treatment and care provided to patients
  • Safety of treatment and care provided to patients
  • Experience patients have of the treatment and care they receive

Quality governance sets out the structures and processes, and values and behaviours that need to be in place to enable the board of directors to discharge its responsibilities for quality.

2.14The ‘Quality Governance in the NHS – A guide for provider boards’ (2011) sets out that the board of directors responsibility for quality are:-

  • To ensure essential standards of quality and safety (as determined by the Care Quality Commission’s registration requirements) are at minimum being met by every service that the trust delivers
  • To ensure that the trust is striving for continuous quality improvement and outcomes in every service delivered
  • To ensure that staff who have contact with patients or whose actions directly impact on patient care are motivated and enabled to deliver effective, safe and person-centred care

2.15Monitor’s ‘Quality Governance Framework’ defines quality governance as “the combination of structures and processes at and below board level to lead on trust-wide quality performance including:

  • Ensuring required standards are achieved
  • Investigating and taking action on sub-standard performance
  • Planning and driving continuous improvement
  • Identifying, sharing and ensuring delivery of best-practice
  • Identifying and managing risks to quality of care”

2.16So quality governance encompasses areas such as clinical audit, clinical effectiveness, education and training, risk management, and patient and public engagement.

Integrated Governance

2.17Corporate and quality governance arrangements should complement and reinforce one another. Whilst individuals working in clinical teams are at the front line of ensuring quality of care for patients, the board of directors takes the final and definitive responsibility for improvements and successful delivery in the quality of care. Therefore, an effective governance framework requires boards of directors to focus as much on quality of care and quality governance as the financial and corporate governance.

2.18This is ‘integrated governance’ and it follows the idea that it is unhelpful to have separate and potentially competing strands of governance. It had been found that the separation of corporate and clinical governance led to a silo approach where clinical and quality issues were separated from other issues such as finance and staffing. The Integrated Governance Handbook (2006) sought to address the separation by setting out elements to support integration and alignment, and the use of tools such as the board assurance framework, annual board review, effective use of dashboard information and a reforming the roles and workings of board sub-committees.

Other Elements of Governance

2.19Alongside this concept of integrated governance there are other governance elements including:-

  • Information governance – the way in which information is managed (in particular the personal information of patients and employees). The Department of Health produces an ‘Information Governance Toolkit’ which brings together the legal requirements and guidance relating to information. FTs are expected to carry out self-assessments against compliance with information governance compliance.
  • Patient and public involvement - under section 242 of the National Health Service Act 2006, NHS organisations must make arrangements that secure the involvement of people who use services in: planning the provision of services; the development and consideration of proposals for change in the way services are provided; and decisions to be made by the NHS organisation affecting the operation of services. Alongside this, there are requirements to consult and involve local Overview and Scrutiny Committees (OSCs) and bodies such as HealthWatch.
  • Health and Safety - under the Health and Safety at Work Act 1974, there is a requirement to ensure the safety of others including staff, patients, visitors, contractors and others affected by the work of the Trust, including the local communities. In order to comply with this duty of care, all staff must be aware of the lines of communication and levels of responsibility which exist to ensure that matters of health, safety and welfare can be dealt with adequately.
  1. The Trusts’ Strategic Plan: 2014 – 2019

3.1In 2014, the Trust adopted a new strategic plan to meet our vision – “Outstanding Care delivered by Outstanding People”. The strategic plan is underpinned by the Trust’s values – Caring, Safe and Excellent.

3.2The aims of the Trust’s strategy is to:-

  • Continuously improve the quality of services so that they are safe, patients and carers have excellent experiences and they achieve the outcomes they want
  • Work as partners in health and social care to increase the value of services, making ourselves and the system sustainable
  • Fully involve patients and carers in their care and make information available for everyone responsible for care delivery, when and where they need it.
  • Have an international reputation for teaching, training and research; translating innovation and putting technology into practice.

3.3The diagram below sets out how the Trust will achieve its aims:-

3.4Each of the components described above have key strategic objectives.

Trust Strategies

3.5The Trust has put in place strategies to set the direction for a number of the key strategic objectives. Key strategies are reviewed by a relevant Committee of the Board of Directors which recommends final approval by the Board of Directors. Progress reports against the implementation of the strategy are submitted to the Board of Directors (or Committee) as required.

Board Assurance Framework

3.6The Trust has a Board Assurance Framework (BAF) in place that identifies which of the organisation’s strategic objectives could be at risk because of inadequacies in the operation of controls or where the organisation has insufficient assurance about its effectiveness. At the same time it provides structured assurances about where risks are being managed effectively and objectives are being delivered. The BAF allows the Board of Directors to determine where to make efficient use of its resources and address the issues identified in order to improve the quality and safety of care. In addition to providing opportunities to improve the effectiveness of management, the BAF provides the evidence to support the Annual Governance Statement and other compliance assessments.

  1. The Trusts’ Integrated Governance Framework Model

4.1In order to be able to deliver the Trusts’ strategic plan, the Integrated Governance Framework model relies on having:-

  • Robust internal assurance mechanisms and governance arrangements which are delivered through the direct and indirect assurance provided through the corporate meeting structure to the Board of Directors and to external stakeholders.
  • Assurance mechanisms through the use of both external and internal audit functions.
  • Robust links to the Trust’s Executive and performance management structures to describe the accountability arrangements and actions that will be taken should risk / performance issues be judged as requiring escalation.

4.2The Trust’s governance structure is set out in Appendix A and shows two distinct but fundamentally linked components:-

  • ‘Monitoring and Assuring’ – this component comprises all the formal powers of the Trust and how they are exercised and delegated, alongside the processes by which the operation of those powers, both retained and delegated, and monitored. In addition, this component includes the assurance that the risks to achieving the strategic objectives of the Trust are mitigated.
  • ‘Executive and Performance’ – this component deals with the operational or ‘day-to-day’ management of the Trust by the Executive Directors, and includes the executive management of the Trust’s functions and the management of performance of those functions. The ‘Executive and Performance’ component provides information into the ‘Monitoring and Assuring’ component to provide it with the detail necessary to undertake its role. The ‘Executive and Performance’ component also provides the ‘Monitoring and Assuring’ component with assurance, through Executive Directors, on the management of the Trust’s operations.

4.3The Trust’s principal purpose is to provide goods and services for the purposes of the health service in England.

  1. The Board of Directors

5.1Schedule 7 of the National Health Service Act 2006 (as amended by the Health and Social Care Act 2012) states that, for an FT, its constitution must provide for all the powers of the FT to be exercisable by the board of directors on its behalf. The constitution may provide for any of those powers to be delegated to a committee of directors or to an executive director. In addition, certain decisions are made by the council of governors and certain board of director decisions require the approval of the council of governors.

5.2The FT board of directors is comprised of a mix of executive directors who report to a chief executive and are responsible for the operational management of the organisation and an equal or greater number of non-executive directors led by a non-executive chair. The non-executive directors have a responsibility for providing appropriate challenge to the executive function. On the board of directors, all directors have the same status in line with the ‘unitary board concept’.

5.3In terms of the delegation of the powers by the constitution:-

  • Committees that have formal memberships other than directors (who sit on the board of directors) cannot be delegated powers by the board of directors. However, this does not preclude other individuals attending meetings as necessary.
  • Individual non-executive directors cannot be delegated powers by the board of directors.

5.4As described in the Constitution, the Trust’s Board of Directors exercises all of the powers (or clearly sets out where they are delegated) of the FT and, as such, there is no need for its role to be set out in terms of reference. That said the role and function of the Board of Directors is set out below. The Board of Directors has in place a ‘Scheme of Reservation and Delegation of Powers’ and ‘Standing Financial Instructions’ which are reviewed on an annual basis and describe powers retained, powers delegated and the financial procedures (including authorities and limits) of the Trust. In addition, the practice and procedure of the Board of Directors meetings are described in the ‘Standing Orders of the Board of Directors’, which are appended to the Trust’s Constitution.