Annex A > Chapter 8 - Management and Culture of the UBH and the UBHT > The development of the clinical directorate structure > The role of non-executive directors
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The role of non-executive directors
212 Dr Roylance, in the course of his evidence to the Inquiry, explained the role that non-executive directors performed. He said:
`They were non-executive and they were meant to be the parallel of Non-Executive Directors of a commercial company whose primary responsibility is to shareholders and profit. The primary responsibility of the Non-Executive Directors was to patients, so it was their responsibility to do two things: bring lay information about the community and skills that they brought with them from their background. In other words, they were people with business experience to give us the benefit of a business approach to things, and they were very active.' [246]
213 In one of the NHS `Working for Patients' [247] documents entitled `Self-governing Hospitals', [248] published in 1989, it was stated that: `... the board of directors will be responsible for determining the overall policies of the Trust, for monitoring their execution, and for maintaining the trust's financial viability.' [249]
214 The same document also said, '... All the non-executive members will be chosen for the personal contribution they can make to the effective management of the hospital and not to represent any interest group.' [250]
215 Mr McKinlay gave an extensive description of the role of the Trust Board and its Chairman in his statement to the Inquiry:
`The role of the Trust Board and its Chairman, while having structural similarities to the commercial model, is essentially different. An NHS Trust is required to provide the highest quality service possible to members of the public within the funds made available by HMG. There is no profit motive in the NHS. While the Board acts as stewards for HMG's funds, the "customers" are the members of the general public, who in the end are also the "shareholders". How the Board should act in relation to customer service will be discussed below, but it is worth noting that, unlike a commercial business, the supply of "customers" to the NHS is effectively unlimited and sub-division into "product streams" is at best of limited applicability in a large Trust like UBHT.
`In a Trust the Chairman and non-Executive Directors need to work with the Executive team to find the right balance between financial control and responsibility, and "customer service", ie the quality of treatment and care given to patients. In my view, high quality patient care is the paramount requirement, but the funds available are limited and have to be managed carefully. To find the right balance, the non-Executive Directors and Chairman need to work in a more positive, pro-active way than would be usual in a commercial business. They need to be Directors and sounding boards for the Executive team, giving them as broad a spectrum of advice as possible.
`If we now turn to the practice rather than the principles, although I have said that the Trust Board should be pro-active, they are not there to run the Trust on a day-to-day basis; that is the task of the Executive team. Guided by the Chairman, the Board is there to set policies, both financial and operational; approve investments; appoint senior members of staff; assist in ensuring that sound systems for setting standards and measuring performance are in place; and to look to the future. They are also there to help resolve specific issues of any sort addressed to them by the Executive team.' [251]
216 Mr Durie explained that the Board's non-executive directors would try to fulfil their roles on the basis of information provided to them at meetings and by observation as they went about the Trust. He recalled:
`We were very concerned at trying to improve the patient care; we were not ... looking at the clinical outcomes but we were very concerned about were they being properly looked after when they arrived at the hospital etc etc.' [252]
217 Mr Moger Woolley, who was appointed a non-executive director at the Trust's inception, viewed his role as not '... to run the day to day activities of the Trust. My role as a non-executive director of UBHT was to sit at the Board table and to question the executives on their roles and how they were carrying them out.' [253]
`I felt that the role I adopted, of stimulating debate and ensuring that matters were thought through, was appropriate for a non-executive director. I did not feel that it was necessary for my view to prevail.' [254]
219 Mr Louis Sherwood, a non-executive director from the Trust's inception until November 1998, felt:
`... that we [the non-Executive Directors] were there to sharpen up the financial management of the Trust. That was the most substantial contribution that I could make as a Non-Executive Director with a broad, general business background. Many of the Board's papers were financial ones, and we spent a lot of time on financial issues.' [255]
220 Mrs Maisey outlined various tasks performed by the non-executive directors:
`... they came to the committees; they each of them chaired one of the executive committees ...The Capital and Services Development Committee and the Patient Care Committee and the various committees that we had were all chaired by one or other of the non-executives ... they took roles according to their expertise and skills.' [256]
221 Mr Nix, in his statement, when citing the benefits of trust status, viewed the non-executive directors as having a more active role. He said a benefit of trust status was that `the expertise of the non-executive directors will be used to direct care more appropriately. They will also take a leading role as laymen and women ensuring all patients are treated as individuals.' [257]
222 However, Ham and Smith in their paper described the non-executive directors as not wanting to get involved in details. They said:
`From the evidence available, it appears that the board focused mainly on high level issues and was not drawn into the detail of service delivery. Peter Durie ... personally committed three days a week as chairman and this time was spent in meetings and walking around the hospitals and services for which the trust was responsible. He would meet the chief executive on a regular basis and he supported the delegation of authority to clinical directorates because "it ensured that the Trust Board did not get bogged down in detail. The Board could concentrate on major issues".' [258]
223 However, Mr Durie's successor, Mr McKinlay:
`... acted to strengthen the management structure by forming board committees chaired by non-executives to "take on a more inquisitive role" ... The changes which he introduced were intended to strengthen co-ordination and monitoring from the centre given his perception that existing arrangements were not adequate.' [259]
224 Mr Durie was asked about the ways in which non-executive directors monitored what was happening in the Trust:
`Q. The mechanism by which you and your non-executive colleagues would monitor the executive management of the organisation was what?
`A. ... We would see ourselves undertaking that role by the results that were reported to us when we met formally as a Board, by us observing, as we went around the Trust in between Board meetings. Those were our two key ways of understanding that what was being done was satisfactory.' [260]
225 The Inquiry heard that shortly after he became Chairman Mr McKinlay made proposals about the reorganisation of some of the committees of the Trust: `I made some proposals for revamping what had been Advisory Groups into board committees, with more what I thought were clearer terms of reference.' [261] He produced a document to Board members setting out his proposals, and setting out the Board's three Committees: the Patient Care Standards Committee, the Medical Audit Committee and the Audit Committee. These Committees are considered in greater detail in Chapter 18 - Medical and Clinical Audit.
226 Of the Patient Care Standards Committee Mr McKinlay wrote:
`This committee would be expected to oversee all aspects of patient care. Provided we can establish a satisfactory set of definitions it would need to enter into the field of medical outcome inasmuch as this affects the performance of the Trust as a whole but steer clear of medical audit. I believe the answer lies in studying medical outcome on a statistical basis while leaving the underlying clinical factors to the Medical Audit Committee.' [262]
227 Mr McKinlay commented on this in his evidence to the Inquiry:
`I think there was a tightrope of a sort. There was no tradition or culture in UBHT that the Board or the committees of the Board should be involved on outcome, medical outcome, even on a statistical basis. I felt that that is something that should evolve. To be more specific, I thought that was something that was wrong. I thought the Board should have some knowledge of statistical outcome, but there was a tightrope to be trod to find a way of easing it into place.' [263]
228 The minutes of the meeting of the Patient Care Standards Committee on 7 November 1995 recorded Mr McKinlay asking, `... how the Trust could identify the relevant professional standards and compare local performance. He commented that few of the audits concerned outcome'. [264] Mr McKinlay was asked in evidence whether any answer was provided to that question, and he replied that it was not. His evidence included this exchange:
`Q. Did you ever form a view as to how that question could have been answered?
`A. I think the answer could have been that it was not the tradition or culture in UBHT to publish in any open way outcome results.
`Q. Did you understand that to be a less open approach than other comparable Health Service organisations?
`A. The people that I talked to within the Trust, which would be probably largely Dr Roylance, but some others, I gathered the impression that they felt they were not really any different from other trusts. But I did not have any independent way of verifying that.' [265]
229 Mr McKinlay was also asked how the non-executive directors kept abreast of the quality of care within the UBHT. He replied:
`I feel that a Board has to be aware of the measures by which its business will be judged ... I think the Boards have to have the measures that allow them to be confident that is happening. I think in the Health Service medical outcome is a measure that the Board should take an interest in ... I believe that quality within medical performance can only be provided by those who are the providers, the experts, but the Board should be able to assess as to whether the standards which they think are relevant are being met.' [266]
230 Mr McKinlay was questioned by Professor Jarman about the information available to him:
`Q. ... you stated in your witness statement ... that "the board and executive management required that the Trust provided a high quality, safe treatment and care" then later on ... you say that "Standards against which questions could be posed and followed up did not exist in this systematic fashion". You have said a number of times that you thought there should be analytical data available to analyse problems. Did you see any of the ... reports of the paediatric cardiac surgery of the BRI?
`Q. Reports of that type were freely available and you wanted reports of that type; did you request them?
`A. No, I did not, I did not know that reports of this type were available. What I had asked for as an audit report did not have this kind of information in it ... I primarily wanted a system put in place where standards were set and performance against those standards were measured. At the time when I was projecting that view in the Trust, we are talking about November 1995, I was not aware that there was a problem in mortality in paediatric cardiac surgery. I was putting forward something to me that was perfectly normal. ...
`I requested the audit report, I did not request this information because the audit report did not track you through to this information. This information, by the time I was asking for the audit report, was the content of the information that Hunter and de Leval had produced and which was produced by the Trust in January 1995 ... January 1996.' [267]
231 Mr Sherwood recalled visiting various parts of the hospital in order to oversee what was happening:
`As Board members we were all encouraged to visit and follow the activities of various departments. Apart from any personal interests, we were allocated to particular parts of the Trust by the Chairman. I took on responsibility for following medicine, radiology, obstetrics and gynaecology, and ENT. I visited these departments fairly regularly. We were encouraged to go everywhere in the Trust, but specifically asked to look at the areas to which we were allocated.' [268]
232 Dr Thorne, in her evidence to the Inquiry, explained her understanding of the role of the Trust Board. She said:
`... the role of the Trust Board was to help in identifying what this vision would be, to help clarify the nature of the organisation, and to actually set the tone of the organisation itself. So [the Trust Board was] very interested in "What kind of Trust do we want to be?" so "We will be a Trust, but what kind of Trust do we want to be and therefore what are the implications of that?" as long as all the kind of fiduciary duties and all the other things which are absolutely and terrifically important.' [269]
233 According to Mr Durie, the Board:
`... had the role of being aware of what was happening and having to make the decisions of where limited resource was to be applied and it also could be a facilitator of trying to help the clinical directorates as necessary.' [270]
234 The directors on the Trust Board also had guidance from the NHS on their responsibilities. In the wake of the 1989 `Working for Patients' White Paper, the NHS Management Executive released a paper entitled `NHS Trusts: A working guide'. [271] According to Sir Alan Langlands, [272] this guidance set out the roles and responsibilities of trust boards and `set out the basis on which they would be monitored and held to account by the DoH.' [273]
235 Sir Alan explained the responsibility of members of a trust board in his evidence to the Inquiry. He said:
`They were expected to behave as part of a single National Health Service. If I can give you some examples, they were expected to pursue national priorities and planning guidance produced by the Department of Health; they were expected to work to comply with patient charter standards and during the period, I guess, 1992 to 1995, they were expected to operate a series of codes ... each Trust was expected to establish a system of corporate governance, which of course now has echoes in the way in which we define clinical governance, which included audit committees and required them to have standing financial instructions to a certain format, required them to produce annual reports, required them to engage in quite a detailed system of internal and external audit.' [274]
236 The working guide, referred to above, explained the differences that would occur with the introduction of trusts:
`A key element of the changes is the introduction of NHS Trusts. They are hospitals and other units which are run by their own Boards of Directors; are independent of district and regional management; and have wide-ranging freedoms not available to units which remain under health authority control.
`Whilst remaining fully within the NHS, Trusts differ in one fundamental respect from directly managed units - they are operationally independent.' [275]
237 The working guide also discussed who would be on the board of directors and what the directors' responsibilities would be:
`Each Trust is run by a Board of Directors consisting of:
- `a non-executive chairman appointed by the Secretary of State;
- `up to five non-executive directors, two of whom are drawn from the local community and are appointed by the regional health authority, the remainder of whom are appointed by the Secretary of State. Where a Trust has a significant commitment to undergraduate medical teaching, one non-executive director is drawn from the relevant University;
- `an equal number of executive directors, up to a maximum of five, including the chief executive, the director of finance, and, for the vast majority of Trusts, a medical director and a nursing director.' [276]
238 This guidance was reinforced in April 1994 in an NHS publication entitled `Corporate Governance in the NHS: Code of Conduct, Code of Accountability'. [277] This said:
`NHS boards comprise executive board members and part time non-executive board members under a part-time chairman appointed by the Secretary of State ... There is a clear division of responsibility between the chairman and the chief executive: the chairman's role and board functions are set out below; the chief executive is directly accountable to the chairman and non-executive members of the board for the operation of the organisation and for implementing the board's decisions. Boards are required to meet regularly and to retain full and effective control over the organisation; the chairman and non-executive board members are responsible for monitoring the executive management of the organisation and are responsible to the Secretary of State for the discharge of these responsibilities.' [278]
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Footnotes
[247] NHS Reforms, `Working for Patients', Working Papers, HMSO Cm 555
[248] Working Paper No 1, `Self-governing Hospitals', 1989
[249] HOME 0003 0042; Working Paper No 1, `Self-governing Hospitals', 1989
[250] HOME 0003 0042; Working Paper No 1, `Self-governing Hospitals', 1989
[251] WIT 0102 0006 - 0007 Mr McKinlay
[253] WIT 0357 0002 Mr Woolley
[254] WIT 0357 0002 Mr Woolley
[255] WIT 0110 0002 Mr Sherwood
[257] WIT 0106 0016 Mr Nix
[258] INQ 0038 0018; Ham/Smith paper
[259] INQ 0038 0019; Ham/Smith paper
[262] UBHT 0021 0700; Board paper, 18 January 1995 (emphasis in original)
[264] UBHT 0016 0007; minutes of meeting of Patient Care Standards Committee, 7 November 1995
[268] WIT 0110 0003 Mr Sherwood
[271] NHS Management Executive, `NHS Trusts: A working guide', HMSO, 1990
[272] Chief Executive of the NHS Executive in England from April 1994 to 2000
[273] WIT 0335 0043 Sir Alan Langlands
[274] T65 p.20 Sir Alan Langlands
[275] WIT 0335 0053 Sir Alan Langlands
[276] WIT 0335 0056 Sir Alan Langlands
[277] HOME 0004 0068 - 0075 ; `Corporate Governance in the NHS: Code of Conduct, Code of Accountability', Department of Health, 1994
[278] HOME 0004 0073; `Corporate Governance in the NHS: Code of Conduct, Code of Accountability', Department of Health, 1994