Health and Care Bill 2021 - ICS governance - laying firm foundations

In this briefing, we focus in on some of the governance aspects associated with Integrated Care Boards (ICBs) and matters that each Integrated Care System (ICS) should now be considering as part of its system design.

With the ICB and wider system being built on the foundations of co-operation and collaboration, the design process will require whole system buy-in from the start to support the long-term sustainability of the ICS. For many systems, the design process will be a matter of building on existing foundations and strengthening relationships, whilst ensuring that existing arrangements are not negatively impacted where they currently create value for patients and communities.

Designing for confidence

System governance is about ensuring that the way things are done within an ICS, from system board to neighbourhood - including its values, culture and decision-making framework - maximise the opportunity for the ICS to be as effective as it can be in promoting the ‘triple aim’ - i.e. the likely effects of decisions relating to:

• The health and well-being of its population;
• The quality of services provided to individuals; and
• Efficiency and sustainability in relation to the use of resources.

The Health and Care Bill charges CCGs with producing a constitution for the ICB. However, ICB governance cannot be developed in isolation from the governance of ICS partner organisations. System leaders, in consultation with key stakeholders, should therefore be focusing on how to design the ICB and wider system governance, with specific attention on strategy, oversight and assurance.

Alignment in terms of approach to governance will be essential in streamlining and managing the system from the ground up. Although each constituent part of an ICS will have items such as their own risk registers and assurance frameworks, at a system level there will also need to be an element of strategic alignment. Practically, it would be helpful, for example, to adopt a common format and vocabulary in relation to corporate risk registers and board assurance frameworks to assist in identifying common risks. Alignment of risk and assurance processes will also provide greater system oversight in terms of whole system objectives, as well as greater transparency on key risks and matters of limited assurance which may affect system priorities or financial controls.

Systems need to work together to identify common risks and opportunities at ICS level. Once these have been identified, thought can then be given to which can be more efficiently addressed at system level rather than on an individual organisation basis. Based on the risks and opportunities identified, systems can then develop a first draft of their joint forward plan.

As systems develop a draft joint forward plan, each system partner will need to consider the implications for its own internal governance. This will need to be considered alongside system procedures to ensure effective decision making processes are in place which provide for adequate oversight by sovereign boards whilst at the same time ensuring decision making does not become overly cumbersome.

Composition of ICB

The Bill is not overly prescriptive in terms of the composition of the ICB and associated governance arrangements. However, form should follow function, so that the governance arrangements for the system are devised with a view to meeting the objectives of the system forward plan. The structure and membership of governance arrangements will need to be reviewed periodically so that, as the system priorities develop over time, the right people are at the table while a wider pool of stakeholders are consulted and involved in different ways.

The Bill provides for only a small number of mandated positions on the ICB (a Chief Executive Officer and a Chair plus three “ordinary members”), leaving the wider composition to each ICB to decide based on local requirements. ICBs will need to apply usual corporate governance principles when designing the composition of the ICB, which will eventually be set out in its constitution. In the absence of any regulations at this stage, we would expect to see:

• Independent NEDs plus the Chair
• Chief Executive Officer who is also the Accounting Officer
• Chief Finance Officer
• Chief Nursing Officer
• Chief Medical Officer
• One member nominated jointly by the NHS trusts and NHS foundation trusts
• One member nominated jointly by the providers of primary medical services within the ICS
• One member nominated jointly by the local authorities within the ICS

The members jointly nominated by the various actors above are full (voting) members. The purpose of having nominated members jointly appointed by key constituencies appears to be that the contributions of these members at system board are a synthesis of different organisational perspectives, informed by the triple aim and focused on how best to fulfil the system forward plan.

The processes for agreeing how these nominations are made will need to be agreed in consultation with those sectors. Whilst statutory guidance on this is expected, it is envisaged that systems will have a large degree of flexibility to design the appointment processes. The governance structures should then support feedback to partner organisations to ensure the principles of subsidiarity, co-operation and collaboration are respected.

There is potential for the structure and membership of governance arrangements to be driven by a desire to give everyone a seat at the table for every decision. Systems should in our view avoid creating excessive numbers of board roles to facilitate a greater number of provider trust, primary care or local authority representatives, as this could lead to bloated structures which lack focus and waste the precious resource of leaders’ time. There is also a risk that a system board constituted in this way becomes an arena in which organisations vie for dominance. 

Non-executive directors

Although the Bill is silent on NEDs (who would be appointed as “ordinary members”), good governance would usually require that there should be a majority of independent NEDs (including the Chair) on the ICB. Owing to the fact that three nominated members bring the requisite knowledge and perspective from their sectors without being delegates of those organisations, they represent a group who can provide further challenge rather than a truly executive complement. This, arguably, provides some flexibility in the number of NEDs appointed to avoid ICBs becoming too large.

The NEDs that are appointed should be truly independent with a proven track record of working in complex systems. There should be a rigorous and transparent process for appointing NEDs, taking into account the skills required by the ICB at the time of recruitment. Consideration might also be given to a pre-defined assessment panel of key stakeholders to instil system confidence in relation to challenge and holding executives to account.

Designing the constitution

The following should be considered as part of governance design discussions:

• Correct skill-mix for ordinary members - this will be vital and due consideration should be given to diversity of thought as well as experience of working in complex systems
• Tenure and appointment/re-appointment process of ordinary members (including NEDs), including initial shorter tenures if desired and eligibility/disqualification requirements
• Remuneration and allowance procedures
• Voting and dispute resolution procedures
• Provisions around the communication and transparency of decisions to the community, patients and key stakeholders
• Delegated and reserved matters
• Conflict of interest procedures to deal with any perceived tensions between roles and duties owed by individual members to other related organisations
• Which committees will sit underneath the ICB - as a minimum there will need to be an audit committee (consisting of NEDs excluding the Chair) and a Remuneration Committee (consisting of the Chair and NEDs)
• Relationship with the Integrated Care Partnership

What should providers and commissioners be doing now?

With just over 8 months until April 2022, systems should begin to address the following issues now:

• Evaluate current system working arrangements as the foundations of the ICS arrangements and understanding which will be intra- and inter- system working arrangements in the future. Systems will need to undertake a reflective approach in evaluating these current arrangements, including in relation to matters such as behaviour and culture to overcome any existing barriers
• Review current commissioner and provider forward plans with a view of bringing them together as a joint forward plan
• Develop the constitution for the ICB (a role which CCGs are charged with), which should be undertaken in consultation with provider trusts, local authorities and PCN representatives
• Consider approaches for clinical engagement and public and patient consultation
• Keep governance systems simple - whilst it will be necessary to be prescriptive in some areas, other areas will need to be readily adaptable, especially in the early stages

How can we help?

• Board sessions on what the Bill means for your organisation
• Facilitating system discussions and design processes as part of the ongoing legislative landscape through large system sessions or smaller workshops
• Stress-testing your proposed system design
• Advising on areas which should be prescribed and which should be adaptable
• Assist with tailoring and designing constitutional mechanisms
• Advising on consultation requirements