Transcript Slide 1

Board development
Working with the Council of
Governors
26th March 2015
1
Working with governors
Purpose:
The purpose of this session is to:
• Introduce the Board members to the role of governors and their statutory
duties
• Agree proposals for how the board and council interact
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The governance model for FTs
Becoming an FT means a new governance model, a concept based on local accountability :
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A membership community – made up the public, patients, their carers and trust staff
A Council of Governors – elected from the membership community and staff plus stakeholders
appointed from key partner organisations, to work closely with the trust in developing the overall
strategic direction, and holding the Board of Directors to account.
A Board of Directors – operationally accountable for delivering the trusts strategy and objectives.
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The Council of Governors - composition
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The role of a governor
Statutory duties / powers
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Governors’ duties / powers
Statutory roles and responsibilities of the council of governors
2006 Act
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Amendments
by the 2012
Act
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Additional powers
Appoint and, if appropriate, remove the chair;
Appoint and, if appropriate, remove the other non-executive
directors;
Decide the remuneration and allowances and other terms and
conditions of office of the chair and the other non-executive
directors;
Approve (or not) any new appointment of chief executive
Appoint and, if appropriate, remove the NHS foundation trust’s
auditor;
Receive the NHS foundation trust’s annual accounts, any report
of the auditor on them, and the annual report at a general
meeting of the council of governors
 In preparing the NHS
foundation trust’s forward
plan, the board of directors
must have regard to the
views of the council of
governors
Hold the non-executive directors, individually and collectively, to
account for the performance of the board of directors;
Represent the interests of the members of the trust and the
interests of the public;
Approve “significant transactions”;
Approve an application by the trust to enter into a merger,
acquisition, separation or dissolution;
Decide whether the trust’s non-NHS work would significantly
interfere with its principal purpose, to provide goods and services
for the health service in England, or performing its other
functions;
Approve amendments to the trust’s constitution
 The council of governors
may require one or more of
the directors to attend a
council meeting to obtain
information about
performance of the trust’s
functions or the directors’
performance of their duties,
and to help the council to
decide whether to propose
a vote on the directors’
performance;
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Governors’ duties / powers by theme (1)
See Appendix A for details
Appointments and terms and conditions
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Process
Appoint and, if appropriate, remove the chair;
Council of Governors’
Appoint and, if appropriate, remove the other non-executive directors; meeting February 2015 &
Decide the remuneration and allowances and other terms and
April 2015
conditions of office of the chair and the other non-executive directors;
Approve (or not) any new appointment of chief executive
Appoint a deputy chairman and Senior Independent Director;
Appoint a Lead Governor;
Appoint and, if appropriate, remove the NHS foundation trust’s auditor;
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Governors’ duties / powers by theme (2)
See Appendix B for details
Annual planning / reporting
Process
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In preparing the NHS foundation trust’s forward plan, the board of
directors must have regard to the views of the council of governors
Approve “significant transactions”;
Approve an application by the trust to enter into a merger, acquisition,
separation or dissolution;
Decide whether the trust’s non-NHS work would significantly interfere
with its principal purpose, to provide goods and services for the health
service in England, or performing its other functions;
Council of Governors’
meeting – April 2015
Receive the NHS foundation trust’s annual accounts, any report of the
auditor on them, and the annual report at a general meeting of the
council of governors
Council of Governors’
meeting – July 2015
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•
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Governors’ duties / powers by theme (3)
See Appendix C for details
Holding to account / representing the interests of the membership
Additional powers
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Hold the non-executive directors, individually and collectively, to
account for the performance of the board of directors;
Council of Governors’
meeting – July 2015
(appraisals) and
ongoing
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The council of governors may require one or more of the directors to
Ongoing
attend a council meeting to obtain information about performance of
the trust’s functions or the directors’ performance of their duties, and to
help the council to decide whether to propose a vote on the directors’
performance;
Represent the interests of the members of the trust and the interests
of the public;
Approve amendments to the trust’s constitution
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Fulfilling governors’ duties /
interests
Board / Council engagement
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Council sub-committees
Guidance:
The Council of Governors cannot delegate authority to sub-committees, but can establish advisory
groups to formulate recommendations for consideration by the Council. One group already established
is the Nominations and Remuneration committee. The remit of this committee includes:
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Nomination and recruitment arrangements for the appointment of non-executive directors and the
chairman;
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Establishing the remuneration, allowances and other terms and conditions of office for that
appointment
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Setting the arrangements for annual appraisal and performance assessment of chairman and nonexecutive directors
As well as the Nominations and Remuneration committee, the Council may wish to establish working
groups to support the Council and provide an opportunity for governors to add value in specific areas.
The Council cannot delegate its duties and therefore any group must be advisory to the Council.
It is for the Council to determine which groups to establish. Best practice points to fewer, more focused
groups.
Examples of types of groups established for non-statutory duties include:
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Quality
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Membership strategy and engagement
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Board / Council engagement
In thinking about how the Board engages with the Council and governors, we should consider some
guiding principles:
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Governors want to be engaged and to be helpful
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Governors have got experience and skills which we should use
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Avoid duplication of work wherever possible
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Governors have statutory duties that need to be fulfilled
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Both board members and governors have different roles
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But have similar goals and interests – the patient
Board of
Directors
Joint working
development
needs
Council of
Governors
development
needs
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Board / Council engagement
In designing a programme of engagement that meets these principles and both parties’ needs,
we may consider a mixed model of engagement methods. There are several existing
opportunities:
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Board of Directors’ meetings – monthly
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Board of Directors’ board development sessions – every two months
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Board of Directors strategy sessions – every two months
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Board sub-committee meetings (e.g. QRC meetings & seminars, F&P, Workforce) – monthly
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Council of Governors meetings - quarterly
The proposal is that we use the range of these opportunities for both parties:
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Specific sessions for Board members
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Specific sessions for governors (Council meetings or seminars)
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Joint seminars including Board and Council
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Observation of Board and Board sub-committees
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Board / Council engagement
A proposed programme, based on topics of interest raised so far by governors:
Topic
Topics raised by governors as areas of interest:
Finance – understanding NHS finances and the
trust’s financial plan
Staff experience – staff survey results and bullying
and harassment
Understanding mortality data
Aligning / triangulating data – patient and staff
experience
Outpatients – patient experience
How do we deliver the values and customer care?
Proposed approach
Learning from complaints / incidents / patient
feedback
Community / Public health
Partnerships in health – external relationships and
how they support the delivery of quality
Equality training / awareness
Workforce planning and profile
Annual planning – draft annual plan
Joint QRC seminar (October 2015)
Additional Council of Governors workshop (April
2015?)
Joint seminar at Board development session (May
2015) (or Workforce committee seminar?)
Joint board development session (July 2015)
Joint board development session (July 2015)
Joint board development session (September 2015)
Joint board development session (September 2015)
Council of Governors workshop (November 2015)
Council of Governors workshop (November 2015)
Joint board development session (January 2016)
Joint board strategy session (February 2016)
Joint board strategy session (February 2016)
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Board / Council engagement
Attendance / observation of board sub-committees:
Why the need?
• Enables governors to hold the non-executives to account – observing them in their role as chair /
members of board sub-committees
How would it work?
• Attendance in capacity as observer, not participant – though allowed to ask questions at the end
at chair’s discretion
• Maximum attendance at two meetings per year per governor per committee
• Committees limited to:
• Quality and Risk Committee
• Workforce Committee
• Finance and Performance Committee
• May need to have two parts to committee meetings to enable confidential discussions, if required
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Statutory duties
Appendix A: Appointments
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Appointing the Chair and NEDS
Guidance:
The 2006 Act requires that an NHS foundation trust has non-executive directors. In making
appointments, the governors must consider relevant aspects of the trust’s constitution and the Code of
Governance, such as:
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the requirements of the NHS foundation trust’s constitution concerning the number of nonexecutive directors;
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the independence of non-executive directors;
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the balance of skills across the Board;
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The composition of executive and independent non-executive directors
Provisions:
Trust constitution:
26.1 “The Council of Governors, at a general meeting […] shall appoint or remove the chairman of the
trust and the other non-executive directors”
27.1 “The Council shall appoint the chairman of the applicant trust as the initial chairman of the trust, if
he/ she wishes to be appointed”
27.2 “The power of the Council to appoint the other non-executive directors of the trust is to be
exercised, so far as possible, by appointing as the initial non-executive directors of the trust any of the
non-executive directors of the applicant trust who wish to be appointed”
27.4 “An individual appointed as the chairman or as the initial non-executive director …shall be
appointed for the unexpired period of his/her term of office … but if, on appointment, that period is less
than 12 months, he / she shall be appointed for 12 months.”
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Appointing the Chair and NEDS
Council of Governors resolution, meeting 10th February:
To appoint the chairman and non-executive directors, for terms set out below
Non-Executive Directors
Chair
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive (University)
Christopher Smallwood
Michael Rappolt
Sarah Wilton
Judith Hulf
Stella Pantelides
Kate Leach
Peter Kopelman
Appt. from
01/11/2011
01/09/2004
29/12/2010
01/01/2013
01/01/2013
01/02/2014
30/09/2014
To
01/02/2016
01/02/2016
01/02/2016
01/02/2017
01/02/2017
01/02/2017
30/09/2018
Term
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3
2
1
1
1
2
Subsequent appointments
For each appointment, the Nominations and Remuneration Committee will convene to:
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Recommend to the Council of Governors approach to appointment (i.e. open competition or reappointment)
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Agree a job description and person specification defining the role and capabilities sought
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Form the interview panel, including:
– Chairman
– Three governors, one of whom is an appointed governor
– Independent external assessor where appropriate
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Make a recommendation to the Council of Governors for approval of the appointment
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Deciding the remuneration and terms of office
Guidance:
It is for the council of governors to decide the remuneration and allowances, and other terms and
conditions of office, of the non-executive directors (2006 Act). (The remuneration of the chief executive
and executive directors is decided by the non-executive directors.)
Provisions:
Trust constitution:
“35.1 The Council at a general meeting shall decide the remuneration and allowances, and the other
terms and conditions of office, of the chairman and the other non-executive directors”
Council of Governors resolution, meeting 10th February:
For the Council’s Nomination and Remuneration Committee to recommend to the Council on 2nd April
an initial remuneration for chairman and non-executive directors
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Approve the appointment of Chief Executive
Guidance:
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The non-executive directors, including the chair, are responsible for appointing or removing the
NHS foundation trust’s chief executive.
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The Council of Governors can decide whether or not to approve the appointment of the Chief
Executive.
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However the initial appointment of the chief executive, if the same as the chief officer of the
applicant NHS trust, does not need Council approval.
Provisions:
Trust constitution:
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29.1 The non-executive directors shall appoint or remove the chief executive
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29.2 The appointment of the chief executive shall require the approval of the Council
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30.1 The non-executives shall appoint the chief officer of the applicant NHS trust as the initial
chief executive of the trust, if he / she wishes to be appointed.
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31.1 The appointment of the chief officer of the applicant trust as the initial chief executive of the
trust shall not require the approval of the Council
Council of Governors resolution, meeting 10th February:
To note the appointment of the initial chief executive.
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Agree the appointment of Deputy Chair and
Senior Independent Director
Guidance:
Role of the Deputy Chair
One of the NEDs should be appointed by the Board of Directors who deputises for the chair as and
when appropriate.
Role of the Senior Independent Director
One of the NEDs should be appointed by the Board of Directors as the Senior Independent Director
(SID).
The role of the SID is to act as the point of contact with the board of directors if governors have
concerns which approaches through normal channels have failed to resolve or for which such
approaches are inappropriate. For example, as the board of directors contact when the Council
discuss chair’s appraisal or remuneration.
Provisions:
Trust Constitution: “28. The Council of Governors at a general meeting of the Council of Governors
shall appoint one of the non-executive directors as a deputy chairman.”
Monitor guide: “The appointment [of the SID] should be made in consultation with the council of
governors”
Council of Governors resolution, meeting 10th February:
To confirm existing deputy chairman and SID – Mike Rappolt
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Appoint the Lead Governor
Guidance – role of the lead governor:
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Monitor requires all NHS FTs to nominate a lead governor
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The lead governor has the same level of authority as other governors, but provides a channel for
communication between the governors and Monitor in the event that either body has significant
concerns about the leadership of the trust that it has not been possible to address through the
Chairman and board of directors.
Provisions:
The role of the Lead Governor is detailed in Appendix B of the Code of Governance.
Council of Governors resolution:
The Council of Governors have elected the lead governor – Kathryn Harrison
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Appointment and, if appropriate, removal of
the trust’s auditor
Guidance:
The 2006 Act states that every NHS foundation trust must have an auditor, appointed by the Council
of Governors. The scope of this includes external audit function only.
Governors must select the auditor and monitor the performance of the auditor, but are supported in
this task by the Board of Director’s Audit Committee – the Audit Committee provides information to the
Council on the auditor’s performance, as well as monitoring the internal audit function.
Provisions:
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Trust constitution: “39.2 The Council shall appoint or remove the auditor at a general meeting of
the Council of Governors”
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Code of Governance: “The audit committee should report to the Council, identifying any matters
relating to the external auditor where it considers that action or improvement is needed and
recommending steps to take.”
Process:
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Initial confirmation by the Council of the appointment of the current auditors at the first meeting;
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An annual report from audit committee to the Council when the annual audit is completed; the
report should assess whether the auditor’s work is of sufficiently high standard and fees are
reasonable;
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The audit committee must make a recommendation to the Council on retaining or removing the
auditor, for consideration by the Council;
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The end of the existing auditor’s contract term will also trigger a new appointment process (the
trust’s current auditor’s contract expires in 2017).
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Statutory duties
Appendix B – Annual planning
and reporting
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Council involvement in preparing a forward plan
Provisions:
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The 2006 Act requires NHS foundation trusts to submit forward plans to Monitor each financial
year.
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In preparing the forward plan, directors must have regard to the views of the Council. This means
that governors should have the opportunity to discuss the plan, but can be implemented without
approval.
Process:
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Need to develop business planning process for 2016/17, to include input from Council of
Governors
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For 2015/16, presenting the draft annual plan to the Council of Governors on 2 April – feedback
from that to the Board when the Board considers the plan at the end of April.
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Approve significant transactions, mergers,
and acquisitions
Provision:
Under the 2006 Act, more than half of the members of the full Council of the trust must approve:
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The trust entering into any significant transaction
This is defined in the trust constitution as:
– If the assets which are subject of the transaction exceed 25% of the fixed assets of the trust;
– If, followed the completion of the relevant transaction, the gross income of the trust will
increase or decrease by more than 25%;
– If, the gross capital of the business which is the subject of the transaction represents more
than 25% of the capital of the trust following completion.
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Any application by the trust to merge with or acquire another trust, separate the trust into two or
more new NHS foundation trusts or to be dissolved.
Process:
Any proposal in regard to these transactions will be discussed with the Council as and when they arise
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Decide whether the trust’s non-NHS work
would significantly interfere with its principal purpose
Provision:
The 2006 Act obliges NHS foundation trusts to ensure that the income they receive from providing
goods and services for the health service (their principal purpose) is greater than their income from the
provision of goods and services for any other purposes (non-NHS income)
NHS foundation trusts are obliged to publish, in their forward plans, information about activities other
than the principal purpose and the income it expects to receive from doing so. The Council must
decide whether it is satisfied that carrying out that activity will not to any significant extent interfere with
the trust’s fulfilment of its principal purpose.
The 2006 Act also requires that the Council must approve proposals to increase by 5% or more the
proportion of its total income in any financial year attributable to non-NHS income. (For example, the
Council will be required to approve plans to increase non-NHS income from 2% to 7% or more of the
trust’s total income).
Process:
Any proposals for an increase in non-NHS income would be discussed with the Council as part of the
forward planning process.
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Receive the trust’s annual accounts
Guidance:
The Council will need to receive a range of reports during the year to be kept informed about the
performance of the trust. The documents which the Council must receive include:
•
The annual accounts
•
Any report from the auditor on the accounts
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The annual report
Monitor’s NHS Foundation Trust Annual Reporting Manual states that these documents should be
presented at the annual general meeting of the Council.
The council of governors must understand the information in these documents, for example, on the
performance of the chair or the other non-executive directors. This will ensure it has fulfilled its other
statutory duties, for instance, to provide informed feedback to the board of directors and to inform
external stakeholders (including any that they represent) on how the NHS foundation trust is
performing
Process:
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The Board of Directors must formally approve the annual report and accounts prior to them being
laid before Parliament (May 2015).
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Then to be presented to the Council at the annual members’ meeting (July 2015)
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Statutory duties
Appendix C – Holding to
account / representing the
membership
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Holding the NEDs to account
Provisions:
Governors have a statutory duty to hold the non-executive directors, individually and collectively, to
account for the performance of the board of directors. The council of governors may require one or
more of the directors to attend a council meeting to obtain information about performance of the trust’s
functions or the directors’ performance of their duties, and to help the council to decide whether to
propose a vote on the directors’ performance.
Approach:
There are a range of methods or activities that governors might undertake in seeking to hold the nonexecutive directors to account, including:
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Receiving regular performance information
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Invite non-executive chairs of Board sub-committees to Council meetings as appropriate and use
these opportunities to ask them questions.
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Observation of board and board sub-committee meetings
The Council will also be involved in and receive information from annual appraisals of the chairman
and non-executive directors.
For appraisal of non-executive directors:
•
Chairman conducts annual appraisals with non-executive directors and reports to the Council
For appraisal of the chairman:
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The process of appraisal is led by the SID, involving governors in the process
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The outcome of the evaluation should be discussed and agreed at the Council
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Represent the interests of Members and
the public
Provision:
Under the 2006 Act governors have a duty to represent the interests of the members of the NHS
foundation trust and the public.
Key principles include:
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Governors should seek the views of members and the public on material issues or changes being
discussed by the trust;
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Governors should feed back to members and the public information about the trust, its vision,
performance and material strategic proposals;
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Governors should try to make sure when they are communicating with directors of the trust that
they represent the interests of members and the public rather than just their personal views.
How will this work?
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Governor drop-in days where Members and the public can meet with Governors, for example as
at the Community Open Day
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Members’ events where Governors would be available to meet with Members and the public – e.g.
Medicine for Members programme
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Membership satisfaction surveys – these could go out once or twice a year with the Membership
newsletter (Gazzette or Members’ Update)
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Email accounts set up for governors for members to contact governors.
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Developing pop-up banner with ‘how to contact the governors’ details.
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Amending the constitution
Guidance:
The trust constitution has been approved by the Board of Directors and Monitor.
The Council of Governors may approve amendments to the constitution, following approval by the
Board of Directors.
Provision:
Trust constitution:
45.1 the trust may make amendments to its constitution only if:
• More than half of the members of the Council of Governors voting approve the amendments; and
• More than half of the members of the Board of Directors of the trust voting approve the
amendments.
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