Item 12
Corporate Governance statement 2014/15
Produced by
Ian Tombleson, Director of Corporate Governance
Trust Board
26 June 2014
Action for Board:

For information

For consideration

For decision
√
1
Corporate Governance statement 2014/15
1. Background to provider licence
As part of Monitor’s licence requirements, the risk assessment framework (which replaced
the previous compliance framework from 1 October 2013) includes a requirement to
complete a corporate governance statement. This year Monitor has asked the return to be
submitted alongside the strategic plan on 30 June and they require we complete their fixed
template. The contents of the two statements is similar overall to previous years (and is set
out on page 3 onwards) and has been proposed by the Management Executive.
2. Structure of the licence
As a reminder Monitor’s licence is the main tool with which providers are regulated and it
sets out a number of obligations. The licence, with the obligations for providers, is
summarised in its six sections below:
General Conditions (GC)
GC 1:Provision of information – supplied by provider as requested
GC2: Publication of information – published by provider as requested
GC3: Payment of fees – Monitor can charge a fee but have not done so to date
GC4: Fit and proper persons test – ensuring that disqualified directors etc do not become or
continue as directors or governors. MEH has systems set out in our Constitution; national
consultation about new systems
GC5: Monitor guidance – requirement to pay due regard to the licence
GC6: Systems for compliance with licence conditions and related obligations – taking all
reasonable precautions against the risk of failure to comply with the licence and other
important requirements
GC:7 Registration with the CQC – a must do. MEH is registered
GC:8 Patient eligibility and selection criteria – eligibility and selection criteria for patients
must be developed and applied in a transparent manner
GC:9 Commissioner requested services – this sets out the conditions under which a service
will be designated as commissioner requested (ie are so unique that they have to continue
to be provided by that provider even in failure). The default position is that all services are
CRS until such times as negotiations with the commissioners change that. This position has
not changed
Pricing conditions (PC)
PC1: Recording of information – recorded as requested
PC2: Provision of information – submissions to Monitor as requested
PC3: Assurance report on submissions to Monitor - specific assurances of accuracy of
submissions as required by Monitor (none to date)
PC4: Compliance with national tariff – commissioners and providers required to provide
services in line with the tariff
PC5: Constructive engagement concerning local tariff modifications – providers to agree
theses with commissioners
2
Choice and competition conditions (CC)
CC 1: Patient choice – where the system allows for choice, then patients should be provided
with information about that choice at the points in the system where choice is available
CC2: Competition oversight – the licencee shall not enter into agreements that
distorts/restricts competition
Integrated Care Condition (ICC)
ICC 1: This is a broadly defined prohibition: the licensee shall not do anything that could
reasonably be regarded as detrimental to enabling integrated care. It also includes a patient
interest test. The patient interest test means that the obligations only apply to the extent
that they are in the interests of people who use health care services.
Continuity of Services conditions (CSC)
GC 9: Application of section 5 (continuity of services) – this applies to all commissioner
requested services and is established to protect patients if the provider gets in financial
distress
CSC1: Continuing provision of Commissioner requested services – this condition prevents
licences from ceasing to provide commissioner requested services
CSC2: Restriction on the disposal of assets – a register of relevant assets is required in the
provision of commissioner requested services.
CSC3: Monitor risk rating – requires licences to have due regard to adequate standards of
corporate governance and financial management
CSC4: Undertaking from the ultimate controller – this is used to prevent parent companies
putting in place arrangement which would force a subsidiary to break its licence conditions
CSC5: Risk pool levy – this obliges licencees to contribute, if required, towards the funding of
the risk pool – this is like an insurance mechanism to pay for vital services if a provider fails.
This has not progressed to date
CSC6: Cooperation in the event of financial distress – when a licence fails a ‘test of sound
finances’ it is then obliged to cooperate with Monitor
CSC7: Availability of resources – licencees must act in a way to secure resources to operate
commissioner requested services
NHS Foundation Trust conditions (TC)
TC1: Information to update the register of NHS FTs – FTs must provide whatever is
requested by Monitor
TC2: Payment to Monitor in respect of registration and related costs – Monitor may move to
cost recovery. This would need a consultation. This has not proceeded to date.
TC3: Provision of information to advisory panel – this external panel has been formed and
will consider questions brought by governors. As was discussed by the Board and Council
these issues are only those that have not been resolved following exhausting all internal
mechanisms
TC4: NHS FT governance arrangements – this enables Monitor to continue oversight of
governance of NHS FTs through the risk assessment framework (introduced from 1 October
2013 and see below).
Under trust condition (TC 4) of our licence (the governance condition) boards are required
to make a corporate governance statement outlining anticipated compliance (or otherwise)
3
with the governance condition and risks to that. Monitor requires Trusts to do that at the
same time as submission of the strategic plan.
The table below contains the two component statements (which are broken down into subcomponents) and proposed responses:
Corporate Governance Statement
Compliant?
Risks and mitigating actions
1. The Board is satisfied that the Trust applies
those principles, systems and standards of
good corporate governance which
reasonably would be regarded as
appropriate for a supplier of health care
services to the NHS.
Yes
Systems require on-going testing,
via management and the Board
committee structure. Systems
and controls assurances are
obtained via the Audit
Committee. A formal external
governance review will take place
every three years as mandated by
Monitor. More complete
explanations about systems of
corporate governance are set out
in the annual governance
statement and the Trust’s annual
report
2. The Board has regard to such guidance on
good corporate governance as may be
issued by Monitor from time to time
Yes
Assurance and advice is provided
as required by Management and
the Audit Committee
3. The Board is satisfied that the Trust
implements:
Yes
In addition to the points made in
1) and 2) above, further testing of
Board committee structures
occurs via the Chairman’s
reviews of committee
effectiveness with the committee
chairs and also through an board
self-reviews/assessments
Yes
Points as set out in 1), 2) and 3)
above apply.
(a) Effective board and committee
structures;
(b) Clear responsibilities for its Board, for
committees reporting to the Board and for
staff reporting to the Board and those
committees; and
(c) Clear reporting lines and accountabilities
throughout its organisation.
4. The Board is satisfied that the Trust
effectively implements systems and/or
processes:
An internal audit report in
2013/14 provided the highest
level of assurance in relation to
systems for monitoring
compliance with the Trust’s
licence.
(a) To ensure compliance with the
Licensee’s duty to operate efficiently,
economically and effectively;
(b) For timely and effective scrutiny and
4
oversight by the Board of the Licensee’s
operations;
(c) To ensure compliance with health care
standards binding on the Licensee
including but not restricted to standards
specified by the Secretary of State, the
Care Quality Commission, the NHS
Commissioning Board and statutory
regulators of health care professions;
(d) For effective financial decision-making,
management and control (including but
not restricted to appropriate systems
and/or processes to ensure the Licensee’s
ability to continue as a going concern);
(e) To obtain and disseminate accurate,
comprehensive, timely and up to date
information for Board and Committee
decision-making;
(f) To identify and manage (including but
not restricted to manage through forward
plans) material risks to compliance with
the Conditions of its Licence;
(g) To generate and monitor delivery of
business plans (including any changes to
such plans) and to receive internal and
where appropriate external assurance on
such plans and their delivery; and
(h) To ensure compliance with all
applicable legal requirements.
5. The Board is satisfied that the systems
and/or processes referred to in paragraph
4 should include but not be restricted to
systems and/or processes to ensure:
(a) That there is sufficient capability at
Board level to provide effective
organisational leadership on the quality of
care provided;
(b) That the Board’s planning and decisionmaking processes take timely and
appropriate account of quality of care
considerations;
(c) The collection of accurate,
5
In relation to point (f) and (g), the
Trust’s annual report and
operational plan have set out a
number of high level risks facing
the Trust and ways in which these
are being mitigated. The four
areas are: quality and safety,
finance, operations and
governance
Yes
The Board has substantial
oversight of the quality and
safety of care within the
organisation receiving detailed
reports from management, which
is supported by oversight and
scrutiny by a dedicated Board
Committee (the Quality and
Safety Committee).
Quality and Safety are at the
centre of the organisation’s
thinking and in terms of
assurance this is very evident in
comprehensive, timely and up to date
information on quality of care;
(d) That the Board receives and takes into
account accurate, comprehensive, timely
and up to date information on quality of
care;
(e) That the Trust, including its Board,
actively engages on quality of care with
patients, staff and other relevant
stakeholders and takes into account as
appropriate views and information from
these sources; and
(f) That there is clear accountability for
quality of care throughout the Trust
including but not restricted to systems
and/or processes for escalating and
resolving quality issues including
escalating them to the Board where
appropriate.
the Trust’s quality report,
operational plan and annual
report
6. The Board is satisfied that there are
systems to ensure that the Trust has in
place personnel on the Board, reporting to
the Board and within the rest of the
organisation who are sufficient in number
and appropriately qualified to ensure
compliance with the conditions of its NHS
provider licence.
Yes
The Board has a complete
complement against its current
staff/post requirements. The
Board performs reviews of its
requirements and continues to
develop plans for succession
planning for the Board and across
the organisation
Yes
In March 2014 the chair elect and
managing director from UCLP
provided a detailed briefing to
Moorfields Trust Board about its
achievement and in going plans.
The Board was very satisfied with
the update and other assurances
it receives through the UCLP
Board.
For FTs that are part of AHSC, the Board is satisfied
it has or continues to:
• ensure that the partnership will not inhibit the
trust from remaining at all times compliant with
the conditions of its licence;
• have appropriate governance structures in place
to maintain the decision making autonomy of the
trust;
• conduct an appropriate level of due diligence
relating to the partners when required;
• consider implications of the partnership on the
trust’s financial risk rating having taken full
account of any contingent liabilities arising and
reasonable downside sensitivities;
• consider implications of the partnership on the
trust’s governance processes;
• conduct appropriate inquiry about the nature of
6
services provided by the partnership, especially
clinical, research and education services, and
consider reputational risk;
• comply with any consultation requirements;
• have in place the organisational and
management capacity to deliver the benefits of
the partnership;
• involve senior clinicians at appropriate levels in
the decision-making process and receive assurance
from them that there are no material concerns in
relation to the partnership, including consideration
of any re-configuration of clinical, research or
education services;
• address any relevant legal and regulatory issues
(including any relevant to staff, intellectual
property and compliance of the partners with their
own regulatory and legal framework);
• ensure appropriate commercial risks are
reviewed;
• maintain the register of interests and no residual
material conflicts identified; and
• engage the governors of the trust in the
development of plans and give them an
opportunity to express a view on these plans.
The training of governors
The Board is satisfied that during the financial year Yes
most recently ended the Trust has provided the
necessary training to its Governors, as required in
s151(5) of the Health and Social Care Act, to ensure
they are equipped with the skills and knowledge
they need to undertake their role.
Training is provided in a number
of areas including the Health and
Social Care Act. Further plans are
being developed to build upon
that training programme and its
coverage.
Next Steps
Governors have provided their views in relation to the completion of the components of this
template, which requires two directors to sign on behalf of the Board. Therefore I
recommend the Board delegates authority to John and Charles to sign this template. The
submission date is 30 June.
Ian Tombleson
Director of Corporate Governance
19 June 2014
7