Press Release

Good Governance – much more than a box-ticking exercise, claim NHS finance professionals

26 March 2008

The concept of good corporate governance within the National Health Service (NHS) is well-understood by NHS Board members, with only two per cent of respondents viewing it as burdensome or simply a box-ticking exercise, finds new research from ACCA (the Association of Chartered Certified Accountants) today.

The report “Understanding Governance in the NHS”, reveals that those responsible for NHS governance – such as board members and Non Executive Directors (NEDs) - take their responsibilities extremely seriously and recognise the need for strong control of public finances within the NHS.

Despite this, the findings also reveal a lack of understanding of good governance in relation to the organisation’s direction and service delivery. When asked “what does governance mean?” and presented with a number of words or phrases associated with the term corporate governance, 67 per cent of respondents said ‘protecting patients’, compared with 92 per cent who said ‘accountability’ and 88.8 per cent who said ‘internal controls’ were applicable to good governance.

The majority of respondents also associated good governance with strong ethical values, including ‘integrity’ at 81.6% and ‘transparency’ at 74.3%.

Dean Westcott, a Council member at ACCA and a representative on ACCA’s Health Panel, says: “These are generally positive research findings, but show that NHS managers view the Cadbury Committee’s definition of good governance, rather than any definition designed purely for the NHS, as the one that matters.

“Because I work within the NHS as a Director of Finance & Deputy Chief Executive at a Primary Care Trust, I knew already that good governance is well understood; but the research also shows that NEDs have insufficient time to properly fulfill their role. Some respondents were concerned that NEDs do not have the necessary financial or business skills to undertake the role effectively and there were a number of requests for more training in the feedback received.”

To tackle this issue, ACCA is also recommending that effective induction and training programmes are also essential, and Board members should be evaluated to guarantee that training is co-ordinated. The NHS should also implement a rolling programme of briefings for Boards, to keep managers up to date with policy changes and their impact on organisations.

Julia Rudrum, the report’s author, commented: “From an encouragingly large and broad range of Board level respondents across the NHS, I am pleased to note that the findings are largely positive.  ACCA is recommending a number of areas to be developed further, such as the consolidation of guidance to address knowledge gaps and avoid confusion. We will also be updating the results over the next two years to monitor improvements in understanding and practice.”