the voice of NHS management

debate
MAY 2004 No. 3

The development of integrated governance

Key points
Integrated governance: is underpinned by intelligent information and public/patient engagement is intended to move organisations towards good governance moves governance out of individual silos into a coherent and complementary set of challenges requires boards to focus on strategic objectives, but also to know when and how to drill down to critical areas of delivery requires the development of robust assurance and reporting of delegated clinical and operational decision making in line with well-developed controls is supported by board assurance products which provide board members with a series of prompts with which to challenge their objectives and focus.

Introduction
To enable boards to discharge their duties with due rigour, robust systems relating to governance must be in place. Good governance enables organisations achieve their organisational objectives. The debate around what we mean by good governance in the NHS has grown in prominence since the publication last year of Governing the NHS1, a document that made an important contribution to the debate around the role and responsibilities of boards. This paper takes the debate concerning governance a stage further by introducing the concept of integrated governance. It is a paper written by others and published by the NHS Confederation to enable our members to engage in this debate at the earliest opportunity. Written by Professor Michael Deighan and Ron Cullen of the NHS Clinical Governance Support Team and Dr Roger Moore of the NHS Appointments Commission, it draws together the views of Professor Aidan Halligan, Professor Sir Ian Kennedy, Sir William Wells, Bill Moyes and others. The paper does not set out to impose a new set of governance rules but to rejuvenate governance. It also introduces a new set of tools to help boards develop their governance capacity. We are pleased to be engaged in this process and the wider debate about the role of boards and how they add value a debate that has centred around accountability issues, setting strategic leadership, good governance, and the role of non-executives. This paper is an important contribution to this debate.

The development of integrated governance

The development of integrated governance

Abstract
Integrated governance can be defined as: Systems and processes by which trusts lead, direct and control their functions in order to achieve organisational objectives, safety, and quality of services, and in which they relate to the wider community and partner organisations. In order that the board may discharge its duties with due rigour it has to be assured that the systems in place relating to integrated governance are closely intertwined. Each decision has to focus closely on the requirements of the different aspects of governance, in particular clinical governance, corporate governance, research governance, information governance, and financial governance. Decisions should pay due heed to the duty of patient and public involvement and must also, where appropriate, be taken in the light of their impact upon the overall health economy in which the specific trust is located. They should also have regard for the sustainability of service provision over time. The board has to agree a common set of objectives which allow it to set a high-level direction for the organisation. Equally importantly, it needs to establish governance systems which enable it to follow and facilitate the achievement of those objectives. The board has to understand what information it needs in order to ensure that this work can be adequately carried out, acknowledging, as Sir Ian Kennedy has said, that intelligent information is required for intelligent judgement. The objectives therefore set the framework for judgements. The board also needs to focus on the high-level objectives around issues such as compliance with Standards for Better Health, patient safety, untoward incidents, productivity, and the pursuit of service improvement and public service reform. It must be reassured of its duties being discharged in order to meet these objectives (progress review) and whether it can robustly achieve these objectives based on risk assessments of the objectives in question. The board needs to know that its own members, as well as staff in the organisation, have the capability to meet their objectives. This implies a robust appraisal process which will provide an essential underpinning. The board also needs to know that the different facets of governance are working, are linked to the high-level national standards, and that the trust audit committee ensures that all systems are cohesive. For example, a high-level objective that the board examines may be the reduction of waiting lists. Low-level objectives, perhaps within the clinical directorate, will ensure that the high-level objectives can be met through examination of the clinical processes and service requirements in reducing waiting lists within the agreed timeframe, and without causing unintended problems to other key clinical objectives or targets.

The need for a new approach

NHS boards have a duty to ensure that their organisation delivers healthcare and health improvement and promotes good health within a system of effective controls, and within the governments objectives for the NHS. Traditionally, this governance responsibility has been fulfilled through a number of strands which, because they have developed separately, do not necessarily align or explicitly interrelate. For example, the translation of Local Delivery Plans to organisational and directorate objectives is rarely accompanied by a thorough risk assessment. Financial allocation may not be fully informed by the pressures of clinical governance; and controls assurance is often seen as a bolt-on-extra or an annual exercise to support the Statement of Internal Control.

The separate creation and evolution of these strands of governance reflects historic attempts to introduce good governance across the whole range of an NHS organisations activity. In many organisations they are managed in silos. This fosters the belief that there is an arbitrary but absolute separation between these governance domains, when in reality they complement and impact upon each other. Equally, this structural separation and the creation of different structures to manage and monitor the domains can lead to duplication of activity or wasted effort, not least when slightly different indicators are needed for each strand. The complexity and overlap can overburden staff with demands for data. These demands can contribute to disillusionment and disengagement from the process at all levels, particularly if the input required from the operational level seems irrelevant to those providing it. At board level there is a real danger that the data and assurances needed for proper governance are either not available or are presented in a way which is unintelligible or obscure. The National Clinical Governance Support Teams (NCGST) work with more than 20 per cent of all PCTs in England (NCGST 2004) reported that boards and professional executive committees rated the adequacy of the data that they received as only 4.8 on a development scale where zero equals totally inadequate and ten optimal. Within the organisation, the current silos lead to duplication of committee structures and poor use of staff time, with people trying to accommodate the requirements of the system rather than being able to work with a unifying governance tool.

that patient and public interests are fully embedded in the governance systems rather than seen as an additional item. The need for such a system is powerfully underlined by the integrated nature of the assessment processes that the new Healthcare Commission (CHAI) will put in place. What we have attempted in this paper is to set out a scheme for rejuvenating governance. It is not our intention to simply impose a new set of governance rules or to sweep away all those which currently exist, although some are ripe for revision. Instead we have outlined an approach and some new tools to help boards question and develop their own governance capacity. This approach recognises that foundation trusts in particular will be operating in a different legal framework with a large degree of discretion on management arrangements and priorities and under the scrutiny of an independent regulator with powers of intervention in the event of significant failure. Nevertheless, the principles of effective governance through an empowered and informed board are common to all NHS organisations and it is that empowerment which lies at the heart of this paper.

The model governance system

Financial management systems have been in existence the longest and demonstrate the key features of a good system with an established reporting structure and effective interface between operational and control mechanisms. Engagement within the organisation is achieved by the delegation of budgets for the achievement of the boards objectives; there are effective rules for authorising, making and recording financial transactions; and through the balance sheet there are effective reporting measures by which the board can engage and govern. An integrated governance model needs to emulate these three elements of local level responsibility, overarching control and board-level accountability.

The opportunity
A number of NHS organisations have already begun to streamline their governance activities and we have a variety of emerging models where, for example, risk management is a function of the clinical governance committee, or where a single committee embraces controls assurance, clinical governance and risk management. The guidance on building an assurance framework has provided a spur to this activity. We have the opportunity to use the existing building blocks to build an integrated system which will be more useful, more easily understood by staff, and with clearer governance indicators for the board. It is also an opportunity to ensure

A scheme for board governance

Principles
To govern effectively the board must focus on each strand of its responsibility. To be relevant, objectives need to take into

The development of integrated governance

account the expectations of patients and the public as well as those of government. The achievement of objectives today will not guarantee success tomorrow unless the proper control systems are in place. On the other hand, good control systems by themselves cannot ensure that the organisation has appropriate, challenging, yet achievable operational and strategic objectives, nor that its culture is one that promotes collective ownership of organisational objectives. Only with an appropriate culture supported by and supporting risk assessment and management procedures can objectives be managed in a way which increases the likelihood of success and reduces the chances of failure. The principles proposed to underpin a scheme for board governance include:

healthcare standards are being systematically pursued. They need to be assured that services are being provided in appropriate premises by appropriate staff, to an appropriate level of quality, and in appropriate numbers; that the organisation is financially sound; and that schemes for modernisation and improving services are being pursued and are on time. The board should be able to identify a range of key indicators which it can explore to provide core reassurance about the organisation. These key indicators or products fall naturally from the organisations key objectives. They may be a more specific exemplar of a broader objective, a product which spans a number of objectives or a proxy for an objective. Care should be taken to choose products which have a clear and understandable significance and a practical reality so that all board members can engage with them. These products may then be challenged by the board in a structured way which explores the achievement of the objective and the control systems that support its

Setting objectives which reflect patient and public views

The board needs to be reassured that in agreeing and setting objectives the expectations and views of patients and the public have been taken into account and that systems are in place to seek and review their opinions.

Progress report on objectives

The board needs to be reassured that its objectives are being met within planned timescales. The high-level organisational objectives are likely to be too general to provide the detail for effective monitoring. On the other hand, the directorate- or department-level objectives may be too numerous. One way forward is to monitor them on an exception basis. The progress report will then include objectives that are not being fully achieved and those where progress has been particularly good. The board will have the opportunity to question and explore further.

Figure 1: Board Assurance Products

Example One: The reduction of waiting lists to a six-monthly period within a given speciality.
Key challenges: Have the financial parameters and clinical protocols been adequately examined when intending to reduce waiting lists in a given speciality? What other aspects of organisational delivery will be affected by placing the weight of resources behind a waiting list initiative? Can we be assured that all clinical risk factors will be taken into account to ensure no harm to patients will occur? Are we confident that, by examining all other priorities within the trust, the board is satisfied this objective can be met? Further examples of board assurance products (BAPs) can be found in annexe A.

Risk assessment grid

The board needs to be reassured that the risks associated with the achievement of its objectives have been identified, managed and minimised. The progress report on objectives will be linked with the risk assessment and risk sensitivity grids, mapping probability of risk against its impact. Risk assessment should be part of the objective setting process.

Board assurance products

The board needs to be confident that key indicators provide reassurance that core national healthcare standards are being achieved and that developmental

achievement, and explores its potential impact upon any other key objective. In this way the board can gain confidence in both its progress and in its controls. This approach may be seen clearly in figure 1. The BAPs are the indicator for the type of question that the board should ask to ensure that it is receiving intelligent information, in due time, to allow it to prioritise its processes in line with other trust requirements. Further areas may well be:

The Department of Healths guidance on building and using an assurance framework demonstrates how an effective framework can give boards the confidence they need.

Steps to integrated governance

The scheme for board governance, outlined above, needs to rest on an integrated governance model. The main features of the model are as follows.

HR staff turnover, GP vacancies finance financial balance productivity bed occupancy, theatre usage chronic disease management access to pathways
for care

Integrating risk assessment with the initial objective setting process

This should be followed by incorporating risk management within the control systems, for example financial risk within the finance system and risk to clinical objectives within the clinical governance system.

clinical safety deaths and untoward incidents public health protecting and improving the health of the
local population

Developing an appropriate scheme for reporting progress against objectives

This should be accompanied by selecting key indicators or board assurance products to provide intelligent information. The scheme will have reality at operational and board level and can be followed over time. The scheme can also be used to measure improvement over time.

modernisation and improvement patient and public involvement uptake of choice

options, complaints.

Assurance and control systems

The board will wish for reassurance that its key management and control systems are working effectively to produce valid data, information, quality and safety, and that the experience of users provides an input to the systems wherever appropriate. Key governance systems are clinical, financial, research, information and corporate. Assurance can be provided by internal and external audit or inspection. The board will expect to be notified of the audit/inspection regimes and any system problems identified either through the formal regimes or internally. Where the board feels that the regimes do not provide them with a sufficient level of reassurance, they may choose to ask for an internal audit of a particular system function, for example, how waiting list data is compiled, how the qualifications of locum doctors are verified etc. The control systems are a key part of the organisations ability to manage risk effectively.

Aligning the various governance systems so that they complement each other without overlap
The opportunity can be taken to develop clinical governance as the primary quality assurance framework for the organisation and to align it with the achievement of the core and development standards. Clinical governance can be interpreted widely to embrace everything in the organisation which impacts on the service given to patients (for example clinical outcomes, staff, premises, communications etc) and with the management of every interface with other organisations or systems of care. Risk management is an essential part of any quality assurance programme and needs to be seen at an operational level as part of the clinical governance activity.

Developing an effective assurance framework

This should provide essential assurance on the effectiveness of the governance systems so that the board can have

The development of integrated governance

confidence in the systems. It needs to be seen as a tool to govern the executive rather than to govern the organisation and it needs to be aligned to the governance systems rather than vice-versa.

Overhauling the committee structure

In some organisations there are separate audit, risk and clinical governance committees which may only serve to preserve the silo nature of the separate activities. There is considerable attraction in giving the audit committee overall responsibility for integrated governance, so long as it has access to appropriate expertise, and for relying on executive sub-committees within the organisation at operational levels to drive the clinical and other governance programmes. This would not detract from or reduce the level of clinical governance information presented to the board but would ensure that governance information was properly integrated, and presented to the board as a coherent whole.

empowered to direct and control their organisation effectively. We believe that the challenges and opportunities facing the NHS can only be realised through this empowered leadership. However, integrating the strands of governance will not be easy. There is a lot of detail to be worked out and we recognise there is a lot of expertise within the NHS that needs to be mobilised. The Department is engaging with representatives of interested parties to put more substance to the template we have described. These include a range of CEs, FDs, chairs, non-executives, medical directors, PEC chairs and auditors. At the same time the Department has set up a team to undertake a thorough review of the Controls Assurance Process to determine the extent to which it is assisting boards in their governance tasks. Throughout the summer the integrated governance theme will be developed with the aim of producing further support materials in the autumn, which will be used to inform a comprehensive training programme for all boards during the remainder of 2004 and into 2005. The authors would welcome any views on the principles or details of what they have described, at the e-mail addresses below. They cannot promise to answer all communications but will take account of every suggestion as the programme moves forward. michael.deighan@ncgst.nhs.uk roger.moore@apcomm.nhs.uk

What is needed at an operational level

a framework within which to work with clear, delegated
responsibilities for local governance

an opportunity to contribute knowledge and

experience to modernise and improve the service within a control framework

useful, relevant performance data to monitor progress and

benchmark activity.

Acknowledgements
This paper was written by Professor Michael Deighan and Ron Cullen of the NHS Clinical Governance Support Team and Dr Roger Moore of the NHS Appointments Commission after wide discussion. The authors drew together the views of Professor Aidan Halligan, Sir Ian Kennedy, Sir William Wells and Bill Moyes, amongst others, and are grateful for the full support that they have given to the concept.

Next steps
In this paper we have set out a template for integrated governance. We have described how by bringing together the various strands of governance, NHS boards can be

Annexe A Board Assurance Products further examples

Example Two: The reduction of adverse events within a given speciality
Key challenges: we will not incur a potential deficit for the current financial year?

In clinical terms within the given speciality is it

possible to recruit key specialists and if so what would their availability be?

Can we assure ourselves that by examining clinical

research and practices we do not have a serious problem with adverse events within the trust?

In financial terms if we prioritise within the given area

what will be the implication for other services? 4 What would be the required nursing back-up to ensure other patients are adequately cared for during this particular time of year?

What is the preventable death statistic within this

organisation and with regard to corporate manslaughter are we discharging our duties corporately?

What is the preventable death statistic within the

trust over the last 12 months and have we in corporate and financial governance terms examined the cost to the institution?

Example Four: PCT Board BAP commissioning for sustainable quality

Key Challenges:

Have we involved patients within the trust in the

examination of our adverse events cycle?

Can we be assured that the proposed clinical service

is needed in the volume suggested and that it is affordable?

Have we got a highly effective clinical appraisal

system for all doctors in relation to the delivery of care within the given area?

How can we be assured that the proposed service

represents Best Value in terms of quality and cost?

With regard to information governance, have we

reliable and meaningful up-to-date clinical information that is analysed, used and learnt from which describes all aspects of quality of the service?

Are we satisfied that the views of the local community,

the patient forum, and the appropriate patient representatives, as well as the views of the professional executive committee, have informed the commissioning process?

Do we have a system of inspection and regulation

which is tightly aligned to clinical governance goals?

Have we communicated with patients and provided

them with adequate information?

Are we satisfied that the pattern of care can be

sustained over time within the local health economy and if not what are the alternatives?

Are we satisfied that the commissioning agreement Example Three: Staff vacancy factors relating to winter pressures upon the trust
Key Challenges: incorporates explicit safety and quality standards and provides for periodic monitoring and timely reporting of issues of progress-against-contract as well as issues of concern.

Can we be assured that by recruiting a 10% increase

in medical consultant staffing within the given speciality under the priority of winter pressures that

Are we satisfied that the commissioning agreement

pays due regard to the management of patient transitions along the pathway of care.

debate 3 The development of integrated governance

NHS Confederation viewpoint

This paper is the start of the debate around the concept of integrated governance. We are pleased to be engaged in this process and the wider debate about the role of boards and how they add value a debate that has centred around accountability issues, setting strategic leadership, good governance, and the role of non-executives. This paper is an important contribution to this debate. The authors would welcome any views on the principles or details of what they have described, at the e-mail addresses below. They cannot promise to answer all communications but will take account of every suggestion as the programme moves forward. michael.deighan@ncgst.nhs.uk roger.moore@apcomm.nhs.uk For further information about the work of the NHS Confederation in the debate regarding boards and governance, please contact Gary Fereday at gary.fereday@nhsconfed.org

References
1 Governing the NHS, Nexus briefing 9, NHS Confederation, September 2003 www.nhsconfed.org/docs/nexus_managerial9.pdf

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