Good practice in Board

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• Good practice in Board
• performance and development
• Jeremy Crabb and Rachel Duffy
• Board Level Development team
• July 2009

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Proposed format

• Context in which Boards operate
• What studies suggest a High Performing Board
  looks like?
• The scale of the challenge
• Help Available

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Context

• The chief executive for the health service in
  England, David Nicholson, has warned the service
  that closing the gap could, in practice,
  translate into a need for efficiency savings of
  up to 15bn in the three years after 2011.
• Health Secretary Andy Burnham admitted that the
  health service would face a "challenge" over the
  next five to 10 years - but said raising concerns
  of closures or job cuts was "completely
  premature".
• He said "The NHS is well-placed to deal with
  the tough economic times ahead. I will make it my
  priority to focus the NHS on prevention, quality
  and innovation.
• BBC News webpage, 10th June 2009

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Context ii

• "Tax increases and spending cuts are inevitable
  immediately after the election, assuming that
  there are signs of economic recovery by then -
  and any managers of a public service who are not
  planning now on the basis that they will have
  substantially less money to spend in two years
  time are living in cloud-cuckoo-land."
• Steve Bundred, Chief Executive, Audit
  Commission The Times, February 27 2009
• QIPP is the only game in town

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So what constitutes a high performing Board?

• Review the research evidence and the implications
  for Board development

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Background

• High Quality Care For All has highlighted the
  continuing need for boards within the NHS to
  operate at the highest levels of corporate
  excellence and performance
• The Department of Health and NHS Institute
  commissioned Cass Business School to conduct a
  literature review on what makes boards high
  performing. The review encompasses evidence from
  boards in both public and private sector
  organisations within the UK and internationally.
• The research was restricted in terms of time and
  scope to recent evidence, dating from 2000
  onwards. A total of 273 articles and journals
  were reviewed for this study

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Structure

• Conditions for high performance are set when
  there is a strong synchronisation between
  corporate governance requirements, the
  organisations strategy, and its stage of
  development
• Rigorous selection and re (de) selection of the
  Chair, Executive and Non Executive directors are
  paramount in ensuring an effective team to lead
  an organisation
• No consistent evidence was identified on the
  relationship between the presence of NEDs and
  improved performance. Externals do however bring
  their reputation to organisations and contribute
  to the organisations brand/identity
• The establishment of strong board sub-committees
  (i.e. audit and remco) is positively associated
  with corporate performance

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Behaviour

• Over-arching themes for good/exemplar boards are
  around effective social systems which promote
  trust and candour, open dissent, individual
  accountability and willingness to evaluate board
  performance
• Boards of acute trusts with strong financial
  performance exhibited better behavioural dynamics
  and process than boards of trusts with poor
  financial performance
• Board communication and decision making processes
  impact on delivery of board tasks. Key elements
  are
• - effort norms the shared belief among
  board members regarding the effort that each
  member is expected to put into a board task
• - cognitive conflict the differences
  between board members in their judgements on
  specific tasks
• - use of knowledge the boards collective
  ability to tap into the knowledge and skills of
  its members, in relation to the tasks before the
  board

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Process

• Evaluating board performance at the collective
  level, and appraising individual performance are
  two processes aimed at creating effective boards.
  These activities may be considered under two
  questions which measures are used?, who measures
  and how? Effective evaluation processes include a
  combination of self and third party and by in
  house and external resources
• Succession planning is a key activity of the
  board.
• Information supplied to boards is characterised
  by its quality, quantity, timeliness and
  relevance. Timely sharing of relevant information
  was found to be a characteristic of boards in
  high performing NHS organisations
• Effective meeting practices need to be in place,
  regarding adequate notice of important issues and
  a clearly structured agenda, with items
  prioritised

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Socio-Economic/Political Context

• Evidence suggests the positive effects of
  directors with different external relationships
  and experience under both turbulent and stable
  business conditions. Board composition needs to
  change as the organisation changes and develops,
  in order to sustain performance
• Within the UK model of governance, conflict of
  roles on the board is described as strong, due to
  the combined tasks of NEDs/externals monitoring
  the same directors they also need to work with
  collaboratively, on developing and implementing
  strategy
• Legal factors, and increasing public scrutiny are
  prompting boards to improve their oversight of
  quality of care by adopting new practices such as
  quality committees as a sub committee of the
  board, greater involvement of medical leaders,
  adopting a quality dashboard and prioritising
  quality on the board agenda

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Implications from the research for Board
Development

• Board building is a process of continuous
  improvement, which means boards must keep coming
  back to the same questions about purpose,
  resources and effectiveness
• Five key development issues have been identified
  through research inadequate competence, lack of
  diversity, under-utilisation of skills
  (especially NEDs), poorly defined roles, and
  poor selection and assessment processes for board
  members
• Evaluation is critical, boards need to follow
  thorough on board composition, board working, and
  individual board member development
• There is no one best way for achieving board
  effectiveness, since it depends on context and
  circumstances e.g. org size, complexity of
  business, stability vs. crisis and environmental
  factors

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The WCC governance ratings show that there is
still work to do
60
Red
Amber
Green
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DH established a PCT Board development framework
to help

• Starting point
• PCT Boards start from different places with
  different needs, challenges, capabilities
  insights
• PCTs may have varying experience of procuring
  Board development
• Procurement process
• Led by DH
• Significant SHA, PCT, NHS Institute other
  expert involvement
• Deliberately challenging and thorough process
• EoI, PQQ, ITT, interview
• Scenario, innovation, understanding of context,
  experience, flexibility, partners, price / cost
• Response
• 225 enquiries from potential providers
• 72 formal Expressions of Interest
• 25 issued with Invitation to Tender (ITT)
• 7 providers/consortia appointed to Framework

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The Framework will mean PCTs have access to a
range of rigorously assessed providers to invite
to a mini competition, where assured quality can
be matched to individual PCT need (Gary
Belfield)
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Conclusions

• The scale of the challenge is multiplying
• That Boards universally have got to raise their
  game
• There is evidence as to what they have to do, and
  how they can do it
• Purposeful commitment to, and from the Board is
  essential

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Queries and information.

• Jeremy Crabb 0845 862 0036
• Rachel Duffy 0845 862 0036
• leadership_at_institute.nhs.uk
• commissioning_at_institute.nhs.uk

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Question 1

• What Criteria would you use to assess Board
  effectiveness?

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Question 2

• What does QIPP mean for boards?