NHS Scotland - blueprint for good governance: second edition

3. The Definition of Good Governance

3.1 A description of good governance that underpins the revised Blueprint has been developed that brings together an updated definition of the ‘governance’ of healthcare with a list of the underlying principles that support the delivery of ‘good’ governance.

3.2 This description of what is meant by ‘good governance’ is further enhanced by explanations of the terms ‘active’ and ‘collaborative’ in the context of good governance.

The Governance of Healthcare

3.3 The publication of the NHS Scotland Blueprint for Good Governance^[2] in 2019 described governance as “The system by which organisations are directed and controlled”. While this statement was useful in clarifying what was meant by ‘governance’ in general, it is less helpful when considering what is specifically required to deliver good governance in a healthcare setting in 2022 and beyond.

3.4 Therefore, a more up to date and relevant definition of governance has been developed and approved by the NHS Scotland Corporate Governance Steering Group. The following paragraphs describe the thinking behind the development of this revised definition of ‘governance’.

3.5 The UK Corporate Governance Code^[3] also defines governance as “The system by which organisations are directed and controlled”. It expands on that statement by adding that “Governance is about what the board does and how it sets the values of the organisation and is to be distinguished from executive director led day-to-day operational management”. This recognises that a good governance system can also help individuals avoid the tension and conflict that can arise in an organisation where the boundaries between roles are not clear.

3.6 The World Health Organisation and the Royal College of Physicians of Edinburgh’s Quality Governance Collaborative^[4] have developed a joint working definition that provides further insight into what excellence in governance means in a healthcare organisation. They describe governance as “The means by which all institutions and organisations involved in the design and delivery of healthcare translate health policy into clinical practice and management in order to improve the quality and efficiency of healthcare. It is the ability to ask the right questions and to implement the right mechanisms to ensure the organisation discharges its duties in line with its purpose and with focus on good clinical practice”. This approach focuses on the governance of clinical practice and emphasises that good governance does not just rely on having systems in place. How well Boards use these systems is a critical factor in the delivery of good governance.

3.7 By bringing these two relevant and helpful definitions together a revised definition of governance in healthcare has been developed for use by NHS Scotland. This definition is expressed as:

“Governance is the means by which NHS Boards direct and control the healthcare system to deliver Scottish Government policies and strategies and ensure the long term success of the organisation. It is the ability to ask questions and make decisions to improve population health and address health inequalities, while delivering safe, effective and high quality healthcare services. It is to be distinguished from executive-led operational management.”

3.8 Governance arrangements in the NHS should include service delivery, change management, workforce, finance, information and asset management. These arrangements must have a clear focus on clinical and care governance, including the governance of clinical research. Particular attention should also be given to educational governance and the governance of the professional standards expected of the clinicians employed by the organisation. (Further advice on educational governance can be found on NHS Education for Scotland’s^[5] website.) All these categories of governance should be considered when NHS Boards determine their arrangements and systems for delivering good governance.

3.9 Having defined what is meant by ‘governance’ and what should be included in the NHS Boards’ governance arrangements, it is helpful to consider next what ‘good’ looks like in relation to the governance of healthcare.

The Principles of Good Governance

3.10 To reflect and describe the latest thinking and best practice in governance in the public sector, ten principles of good governance have been identified. These principles underpin the design of the Blueprint for Good Governance.

3.11 The Principles of Good Governance can be viewed as an executive summary of what is required to deliver good governance. They are as follows:

i. Good governance requires the Board to set strategic direction, hold executives to account for delivery, manage risk, engage stakeholders and influence organisational culture.

ii. Good governance requires a Board that consists of a diverse group of people with the necessary skills, experience, values, behaviours and relationships.

iii. Good governance requires that roles, responsibilities and accountabilities at Board and executive level are clearly defined and widely communicated.

iv. Good governance requires an assurance framework that aligns strategic planning and change implementation with the organisation’s purpose, aims, values, corporate objectives and operational priorities.

v. Good governance requires an integrated governance system that co-ordinates and links the delivery of strategic planning and commissioning, risk management, assurance information flows, audit and sponsor oversight.

vi. Good governance requires operating guidance that is agreed, documented, widely- communicated and reviewed by the Board on a regular basis.

vii. Good governance requires regular evaluation of governance arrangements to ensure it is proportionate, flexible and subject to continuous improvement.

viii. Good governance requires an active approach that anticipates and responds to risks and opportunities which could have a significant impact on the delivery of corporate objectives, the Board’s relationships with stakeholders and the management of the organisation’s reputation.

ix. Good governance requires a collaborative approach that ensures the organisation’s systems are integrated or aligned with the governance arrangements of key external stakeholders.

x. Good governance requires governance arrangements that are incorporated in the organisation’s approach to the management of day-to-day operations and the implementation of change.

3.12 To assist NHS Boards in adopting the Principles of Good Governance, the following paragraphs explain what is meant by an active approach and a collaborative approach in relation to governance in healthcare.

The Active Approach

3.13 Put simply, the active approach to delivering good governance requires Board Members to focus on the right things, consider the right evidence and respond in the right way.

3.14 A more comprehensive description of the active approach to governance has been defined as:

“Active governance exists when the appropriate issues are considered by the right people, the relevant information is reviewed in the most useful format at the right time, and the level of scrutiny produces rigorous challenge and an effective response.”

3.15 This approach should not only ensure that Boards can make timely, well-informed, evidence-based and risk-assessed decisions, it will also ensure Board Members can rapidly identify, escalate and manage issues which otherwise might not be seen or understood.

3.16 While an active approach is required to deliver good governance in healthcare, it should be recognised that the NHS is only one of a range of organisations that impacts on the health of the population. Therefore, NHS Boards must also consider how they can influence and interact with the other bodies that have an impact on the delivery of quality healthcare.

The Collaborative Approach

3.17 The NHS works closely with national and local government, integration authorities, independent (primary care) contractors, the private sector, the third sector, charities, academia, communities and citizens to deliver healthcare in a joined up, person-centred manner.

3.18 Consequently, the governance of the organisations that interact with the NHS have a direct impact on population health and the delivery of healthcare services and this must be recognised when designing the governance approach for NHS Boards.

3.19 To assist in the promotion of this approach, the following definition of what collaborative means in relation to governance has been developed:

“Collaborative governance exists when all parties who have an influence in the delivery of healthcare outcomes recognise, understand and respect the needs of each other and work together to integrate or align their arrangements for the governance of the delivery of services and products within the healthcare environment.”

3.20 While fully integrating governance can be challenging, it is critical that a collaborative approach to governance is adopted by the key players in the healthcare system to ensure that the end-to- end governance arrangements are understood and aligned in order to achieve the best outcomes for the population and ensure best value in the use of public funds.

3.21 The introduction of the Principles of Good Governance will assist in delivering this approach and the development and communication of a Blueprint for Good Governance that describes the NHS approach to governance arrangements in more detail will further enable the collaborative approach.