Accountability in Action

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Accountability in
action
John Coutts,
Governance Advisor,
FTN
What we will cover
• Context: the 2012 Act, the board and the council of governors
• What accountability is and is not
• Why accountability is important
• What is involved in a good accountability relationship
• Some tips and some things to avoid
• Conclusions, discussion and questions
The Health and Social Care Act 2012
• ‘The general duty of the board of directors, and of each director
individually, is to act with a view to promoting the success of the
corporation so as to maximise the benefits for the members of the
corporation as a whole and for the public.’
• ‘The general duties of the council of governors are:
• to hold the non-executive directors individually and collectively
to account for the performance of the board of directors, and
• to represent the interests of the members of the corporation as
a whole and the interests of the public.’
Accountability – what it is
• To be accountable is to be liable to explain or justify ones
actions and decisions.
• Accountability is the process of explanation and justification.
• So holding to account is the process of requiring explanation
and justification, but it is also about testing, forming a
judgment and if necessary taking action.
• Accountability implies responsibility – It is reasonable only to
hold people to account for those things for which the are
responsible.
Accountability – what it isn’t
• It is not synonymous with responsibility
• It does not imply a management relationship
• It is not a ‘one off’ annual event
• It is not the same as appraisal
• It is not about confrontation, ‘putting someone in their place’
or ‘giving them a hard time’
Why is accountability important?
We are working through difficult times:
• On-going economic uncertainty
• Fewer resources
• Loss of faith in institutions and businesses
• Reflected by adverse press coverage
• Mid Staffordshire Enquiry
The case for local accountability
• Boards do not ‘own’ foundation trusts, they direct them on behalf of
the ‘owner’ – local communities and the general public.
• FTs have disparate groups of stakeholders all of whom should have
a voice.
• External regulation tends to be retrospective, encourages
compliance rather than high levels of performance and distorts the
allocation of resources in a way that might not accord with local
priorities.
• Being answerable for what we do promotes self knowledge, being
answerable to lay people promotes self awareness.
Boards can get it wrong
•
•
•
Overconfidence, complacency and inertia at board level
Strong membership, but board members not applying their skills and
knowledge or being prone to ‘group think’
The right processes in place, but not used effectively
•
•
•
•
•
Management styles not conducive to challenge or scrutiny
Focus on one performance factor to exclusion of others
Inadequate information to consider the risks associated with its strategy
Inadequate controls properly to mitigate risk
Insufficient discipline in questioning and challenging
•
Insufficient attention to cumulative risks
Accountability implies a relationship
Your accountability relationships will work in two directions:
• You will be given an account, an explanation, of the trust’s
performance, the reasons for it and what is being done to
bring about improvement and you will be able to test that
out and form a judgment about the acceptability of past
performance and of future plans.
• But you will also need to give account of your collective
performance to the membership and be prepared to act
on their judgment.
Exercise: Holding the board of directors to
account
• What would the format be? How would you set about the task?
• What behaviours are important and what commitments would you
need to make?
• What support and advice would you need?
• What do you need the board to do?
• What information would you need?
• What preparation would you need to make?
• Anything else?
Accountability and governors
NEDs giving account to you might include:
• How the board manages risk
• How the board gains assurance that the main risks to
achieving strategy and performance are controlled.
• Examples of where the board has intervened to deal with
issues of performance.
• The reliability of past performance as a predictor of future
performance.
• It is the board’s job to convince governors.
Some things you might want to know about
• The overall picture: what has gone well and what has gone
badly – and why.
• How NEDs have ‘triangulated’ to obtain assurance that the
figures can be trusted
• If the board is satisfied with performance and if not why not.
• If the chair is satisfied with the level and quality of challenge
in the boardroom.
• How governors can assure themselves that they have the full
picture
Making the relationship work
Some suggestions:
• Agree the ground rules
• Stick to them
• Don’t try to do the NED’s job
• Use your experts.
• Don’t be afraid to question
• No subject is off limits
To conclude..
• Self regulation starts with the board and the buck stops with
the board
• Governors are not a substitute for Monitor, but they can help
boards to reflect honestly and to understand how well they
are doing
• This will always be a work in progress – stick with it
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