Hospital governance plans are potentially dangerous

 

The Health Information and Quality Authority’s proposals would create confusion over who has overall responsibility

THE REPORT last month by the Health Information and Quality Authority on Tallaght hospital dealt in some detail with the issue of corporate governance at the hospital. However, its recommendations on corporate governance are intended to apply to all publicly-funded hospitals.

Many of these recommendations represent good corporate governance practice and many are already implemented in Irish hospitals. However, there are some recommendations that are potentially dangerous if applied generally, and are possibly an over-reaction to the Tallaght hospital situation.

The potentially most damaging recommendation is that the chairperson of a hospital board should be “line managed” by a nationally designated post-holder (eg the director general of the new Health Service Executive structure or equivalent) for the provision of an effective hospital service.

Having spent 40 years in “line management” I should know what this means. The director general would be the chairperson’s “boss”, empowered to give directions to the chairperson. In effect, this would create a new concept in Irish corporate life – a “shadow chairperson” – with power to overrule the chairperson and the board. This does not conform with good corporate governance as it obfuscates responsibility and accountability, is unworkable and could seriously damage performance.

I have a lot of respect for the Health Information and Quality Authority and its setting and monitoring of standards in hospitals and nursing homes, but it should “stick to the knitting” in its area of undoubted expertise. This is in standard-setting, inspection and clinical governance, but not in the area of board governance.

While the authority’s recommendation on a “shadow chairperson” would create confusion as to who is responsible and accountable for the hospital service, the recommendation regarding the chief executive compounds the situation. It recommends that the chief executive would be “line managed by the chairperson as their direct line manager and, in addition, by a nationally designated post-holder”.

The report states that this might be the director of hospital care of the new HSE structure. So the chairperson would have one “boss” and the chief executive would have two “bosses”. Again, a dangerous new concept of a “shadow chief executive” and more obfuscation.

These recommendations are clearly unworkable and potentially very dangerous. No self-respecting person would take up the position of chairperson or chief executive of a hospital, being “shadowed” in this manner by persons from another organisation.

A further potentially damaging recommendation is that employees should not be appointed to the board of a hospital.

There are many hospitals where certain employees are appointed to the board ex officio, for example the chief executive, the chair of the medical board, and the director of nursing. This is no different from the practice in the private commercial sector where key top executives are ex officio directors. In addition, in some hospitals, provision is made for an employee to be appointed to the board following a nomination or election process.

These employees, whether ex officio or elected, all bring a wealth of experience and knowledge to a board, and as they are always outnumbered by non-executive directors, they cannot over-influence a board. Having them “formally in attendance at the board” as recommended by the authority, but not as board members, is an overreaction to the Tallaght hospital situation.

In any event, the authority confusingly contradicts itself, because having initially recommended that there should not be executive directors, it subsequently recommends delegation “from the board to chief executive and executive directors”; and recommends that the chief executive be responsible for objectives being agreed for executive directors.

The authority’s recommendation that board meetings of hospitals be held in public is well motivated but will not lead to the objectives stated of promoting “openness and transparency”. A key component of good corporate governance is that non-executive board members constructively challenge the chief executive and senior officers at board meetings. This is most unlikely to happen if board meetings are held in public.

I believe that, for effectiveness, hospital board meetings should continue to be held in private, while being rigorously held accountable for performance to their funding organisation. However, there is merit in having the annual general meeting of hospital boards held in public.

The recommendation of a State-established process to select and appoint board members to hospital boards is probably unworkable in voluntary hospitals, because of their legal status, as is the recommendation that board members be paid, as some of these hospitals are registered charities and are prohibited from remunerating their directors.

There are very many recommendations in the authority’s report that represent good corporate governance, for example a mandatory induction programme for new board members; compliance with the code of practice for the governance of State bodies; mandatory ongoing development for board members; assessment of composition and competency of board members; declaration of potential or actual conflicts of interest; annual self-evaluation of boards; register of interests of board members; clear delegation from board to chief executive; and chief executive being accountable for achieving agreed objectives.

The authority recommends that the Minister for Health should establish, as a priority, an oversight committee in the Department of Health to ensure the implementation of the governance recommendations. The Minister should move carefully in this area and not create more obfuscation by introducing “line management” by “shadow chairpersons” and “shadow chief executives”.

Hospital boards in receipt of public funds should be accountable for those funds and for the delivery of the services they have contracted to supply. They should also be inspected to ensure that they meet national and international standards and are penalised if they do not meet those standards.

But they should not be “line managed” by “shadows”.


Henry Murdoch is chairman of the National Rehabilitation Hospital, Dún Laoghaire, Co Dublin. He is a member of the Forum of Chairpersons of State Sponsored Bodies, which has published guides and organised workshops on corporate governance

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