For governance watchers and practitioners, 2009 has certainly lived up to its promise of offering interesting times. Although the spotlight has mostly fallen on the corporate sector, the NHS has not been free of its own governance failings, as exemplified recently by Maidstone and Tunbridge Wells Trust and Mid-Staffs NHS Foundation Trust.

Combined with the anticipated cuts in public funding for the NHS, or at least greater pressure from political parties of differing hues to deliver value for money, it is now an opportune time to look again at health service governance frameworks and develop a model that is apposite for the challenges ahead.

Sir Adrian Cadbury's landmark report in 1992 defined governance as "...the system by which companies are directed and controlled", clearly identifying the processes and procedures by which companies could demonstrate good governance and providing appropriate guidelines for those aspects that could be measured.

Many of the tenets of good governance that were spawned by the Cadbury report and successive codes on corporate governance have been transplanted to the public and voluntary sectors with little scrutiny as to whether they fit the public stewardship model that underlines those services.

For the NHS, and for charities, it is often difficult to assign specific labels to those interested in the progress and future of the service provided.

For instance, the health service may argue that the patients and service users are the equivalent of 'customers' in the commercial sector, but this does not stand up to further scrutiny when you take into account the lack of financial power the patient can exert.

For example, in spite of government efforts to encourage patients to make a definite choice about where to make a doctor's appointment or to undergo an operation, the majority will still choose their family GP or local hospital.

Who owns the NHS?

Furthermore, the question as to who 'owns' the NHS is not as easily identifiable as the shareholders in a listed company. It is not surprising that there is confusion as to what 'governance' should consist of in the NHS.

For the public sector in general, there is a wider focus on delivering high quality appropriate services, which offer value for money, within an environment that can change rapidly in light of public outcry or political power-play.

Local and central government whims, and media outrage, can distract boards of NHS trusts away from acting as stewards of public funds in delivering high quality care into boards more prone to protecting the reputation of the trust and meeting any centrally-dictated targets.

Any unwarranted and unintended external checks on the freedom of action of the board to adapt its governance structures to suit the needs of a trust as it evolves, should be challenged constructively and not accepted blindly. It should be remembered at all times, that the purpose of governance is to facilitate good decision making; and accountability to stakeholders, in the context of the directors' duties.

Governance in the NHS has to work in several directions, not just from the board out.

David Wilson

More external scrutiny and greater requirement to prove that boards are making the best decisions for a trust and the people affected by it are required to ensure that services are reflective of local needs and deliver value for money against a broad political framework. So, while it is clear that we need to look at systems and processes, and checks and balances in the governance of the NHS, we need to give at least equal attention, and certainly much more than it has hitherto received, to the human dynamics of the boardroom, especially in a sector that is much in the public mind.

Decision-making failure in the boardroom, throughout history, has less to do with the lack of supposedly independent directors and insufficiency of regulation, and more to do with the competences and behavioural characteristics of board members, the chairman's leadership qualities, and how directors interact.

It is therefore, appropriate that we look at boardroom behaviour within the NHS. In its evidence to Sir David Walker's
enquiry on governance in the banking sector, the Institute of Chartered Secretaries and Administrators identified the key tenets of boardroom behaviour that can make the difference between a successful business and a failing one. The principles are equally applicable to the NHS.

Best practice boardroom behaviour may be characterised by:

• a clear understanding of the role of the board
• the appropriate deployment of knowledge, skills, experience, and judgment
• independent thinking
• the questioning of assumptions and established orthodoxy
• challenge which is constructive, confident, principled and proportionate
• rigorous debate
• a supportive decision-making environment
• a common vision; and the achievement of closure on individual items of board business

The degree to which these behaviours can be delivered is shaped by some key
factors:
• the character and personality of the directors and the dynamics of their interactions
• the balance in the relationship between the key players, especially the chair and the chief executive, the chief executive and the board as a whole
and between executive and non-executive directors
• the environment within which board meetings take place; and
• the culture of the boardroom and, more widely, of the company

To improve on existing standards of behaviour in the boardroom, directors need to develop a greater awareness of, and commitment to, 'fit for purpose' governance as the means by which the board can collectively agree the business objectives of a trust and a strategy for their implementations by the executive management.

All directors – including executives – should seek to improve their performance in these important areas. They should bridge the 'knowledge gap', with corresponding personal development and learning opportunities focused on the fundamentals of good governance as determined by directors' duties, related to the specific business model, strategy and operations of their trust.

The process for helping non executive directors deepen their knowledge of the business to a level that optimises their understanding, and allows them to challenge proposals constructively, can be made more effective by allowing them greater exposure to all of a trust's operations, both those delivering healthcare directly and those functions that support that delivery.

The secretary needs to be appropriately experienced and qualified

A trust secretary has a key role to play in helping boards perform even better. The secretary needs to be appropriately experienced and qualified in matters of law and regulation, ethics, governance and secretaryship, business finance and accounting.

In summary, the role should become that of the chair's chief of staff, in helping to assure delivery of a well functioning board.

Behavioural governance is vital to the environment in which NHS trusts and their boards operate and the key relations between board members and their external stakeholders. By understanding and acknowledging that we are capable of acting irrationally (as well as rationally) and that decisions can be made on a range of emotional social, economic and environmental levels, we can start to appreciate that traditional governance frameworks based on quotas, systems and processes will invariably fail at some point.

By developing governance arrangements that balance functionality and personality we may be able to engender in the NHS a capability to meet the needs of its many stakeholders and provide the level of accountability required from each.

David Wilson is the chief executive of the Institute of Chartered Secretaries and Administrators