1. Maintaining a sound governance system
23 October 2015 – BME National Annual Conference
Maintaining a sound governance system
Sharron Webster
Stephen Bull

2. Why is governance so important? The changing external environment
Regulation
new Regulatory Framework
emphasis on risk
stress testing
HCA Code of Practice
IDAs
NHF New Code of Governance
Experience of how the HCA regulates – most issues are seen as governance issues
Constant emphasis on role of board

3. What is the board for? Agreeing the Group’s strategy The future
Setting parameters for decisions that have been delegated
Risk
Identifying and managing
Finance
Approving budgets and accounts
Hiring and firing the chief executive and other executives

4. How can the board deliver all of that?
Defining what its proper role is and the roles of others
Effective delegation
Being realistic about what board members can be expected to know about
Trusting your senior executive
Making sure the board gets all necessary assurances that all is “ok”

5. What do you need to maintain sound governance?
Standing orders
Operation of meetings
Offices and roles, e.g. chair, secretary, CE
Delegations/ matters reserved
Committees
Urgency procedures, sealing, other administrative matters
Conflicts of interest
Appraisal processes
Governance effectiveness review
Code compliance

6. What else do you need?
Terms of reference – for boards and committees (NHF Code)
Executive terms of reference?
Delegatory framework - Who makes what decisions?
Suite of policies
Rules/articles/ IGA
Financial regulations

7. Regular governance reviews
Of internal documentation
Of board membership – skills and expertise
To assess whether your structure is still right for you
What about a more streamlined board and shareholding membership structure?
Smaller board
Board members selected rather than elected
Shareholders and board members co-terminus
Revised rules to reflect this streamlined structure

8. What makes a good board Diversity Well chaired Dynamic Induction
Development opportunities
Effective and robust appraisal
Term and churn

9. What makes a good board member?
Specific skills are necessary
Ability to ask the right questions and understand the answers
Common sense
Constructive challenge (2 way)
Listening
See the big picture – be strategic
Act in the best interest of the organisation
Be risk aware
Be self aware – know your strengths and weaknesses and know when to go

10. Your role as a board member
Can you ensure the success of the business –
Strike balance between entrepreneurial and prudent control
Short term pressures and long term trends
Local vs wider environment
Having the correct skills and competencies on the board
Do you have a board that can ask the right questions …and understand the answers
Do you have a board that adds value to the business
Not there to represent

11. Are you embracing the board appraisal process
What training does your board have
Are new board members inducted and made to feel welcome – board behaviours
Can you access information out there

12. Code of Governance B2 -Act in best interests of the organisation
B4-Board size
C1-3 - nod to VFM
C7 - Chair leads the board
Emphasis on skills needed to run a business
D1- Succession planning
D2 -Kept max tenure of 9 years - but up to 9 years (flexible)
D3 - Re appointment after one term of office

13. Back to basics Read papers, turn up to meetings and ask questions
Make decisions you can justify (incl audit trails and good minutes)
Constructive challenge
Review skills and competencies
Take time in recruiting the chair
Keep it strategic - outcome and impact

14. Back to basics Act wholly in the best interests of the organisation
Know the limits – constitutions
Appraisal
Keep it strategic - outcome and impact
Think differently – even for board meeting formats etc
Diversity on the board
Make time for reflection
RISK RISK RISK