Corporate Governance in the NHS

This assignment examines the role of corporate governance in the National Health Service (NHS). It analyzes how governance structures, such as board composition, accountability mechanisms, and risk management, influence decision-making and service delivery within NHS organizations. The assignment draws upon academic literature and practical examples to illustrate the challenges and opportunities presented by corporate governance in the context of a complex public healthcare system.

RESEARCH
DISSERTATION
(Corporate Governance: The Board and the Governors
Interaction in NHS Foundation Trust)

ABSTRACT
Corporate governance is an effective systematic process which is responsible for imposing
certain laws and legislation that have to be followed by each and every firm as to managing their
work in systematic manner. Corporate governance is a broad-ranging term which refers to the
mechanism, relation and processes by which a corporation is controlled and directed as per the
assistance of upper level of management. The governance attributes of an organisation are
influenced through internal and external factors. Various research methodologies have been
discussed in this project that helps in gathering relevant data related to the topic of study.
Qualitative and quantitative methodologies are two methods that are being described here for
gathering relevant information regarding the theme of the research.

Table of Contents
TITLE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
1.1 Overview of the Research ....................................................................................................1
1.2 Background of the Research.................................................................................................1
1.3 Significance of the study.......................................................................................................2
1.4 Research Aim........................................................................................................................2
1.5 Research Objectives ............................................................................................................2
1.6 Research Question ................................................................................................................3
1.7 Time Scale ............................................................................................................................3
CHAPTER 2: LITERATURE REVIEW.........................................................................................5
2.1 Concept of corporate governance in NHS Foundation.........................................................5
2.2 The implementation of rules and regulations as per the corporate governance code of NHS
foundation...................................................................................................................................5
2.3 The importance of Corporate governance in NHS foundation trust.....................................6
2.4 Board and the governors interact in the NHS trust..............................................................7
CHAPTER 3: RESEARCH METHODOLOGY ............................................................................8
4.1 Introduction ..........................................................................................................................8
4.2 Research design.....................................................................................................................8
4.2 Research philosophy.............................................................................................................9
4.4 Research type........................................................................................................................9
4.5 Research approaches...........................................................................................................10
4.6 Methods of data collection..................................................................................................10
4.7 Data sampling......................................................................................................................10
4.8 Ethical considerations.........................................................................................................10
CHAPTER 4: FINDINGS AND RECOMMENDATION ...........................................................11
Findings and Results.................................................................................................................11
Recommendation .....................................................................................................................11
REFERENCES .............................................................................................................................12

TITLE
Corporate Governance: The Board and the Governors Interaction in the NHS Foundation
trust.
INTRODUCTION
1.1 Overview of the Research
In the present scenario the basic purpose of each business organisation is to attaining high
growth and success at market place as to serving variety of gods and services to their significant
buyers. Corporate governance is a vast concept and plays an effective role in health and social
care sector (Dawkins, 2011). Corporate-governance can be considered as an effective system of
rules, practices, operations and practices through which a firm is directed and controlled. On the
other side this also describes as the framework of rules and practices through which a board of
director or higher authority assure about fairness, accountability and transparency in a firms
relationship with its financiers, management, customers, employees, government and its
communities. NHS is the most popular services provider in the United Kingdom and very much
concern on rendering high quality products and services to their significant buyers as to
satisfying their needs and wants.
1.2 Background of the Research
The major focused area of each small as well as large business organisation is fulfilling
the basic desires of people who are very much willing to taking benefits of offered products and
services of firm. Corporate governance is system of various rules and policies which effective in
directed and controlled an organisation. In a firm stakeholders plays a wide role in governance as
to appoint the authorities and directors for establishing control on organisational activities and
satisfy themselves that an effective governance structure is in place. NHS is combination of four
different heath care sector such as National health service in England, NHS Scotland, NHS
Wales and health care in Northern Ireland in United Kingdom. NHS started their work on 1948
as a worlds largest service industry, which is focused on satisfying the needs and wants of people
(Deffenbaugh, 2012). Corporate governance is nothing but a system by which firms are
controlled as well as directed appropriately. Boards of directors are having the responsibility of
administrating of all ventures existing in UK.
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1.3 Significance of the study
The present research is based on the topic of corporate governance: the board and the
governors interaction in NHS trust. As a large business organisation NHS has various operation
which are need to be controlled by its authorities and directors as to smooth flow of services at
market area (Demirag and Khadaroo, 2011). Corporate governance is an essential component
which plays a significant role in control and manage all function of NHS is effective manner.
Corporate governance consist to the direction a corporation is governed. It is an appropriate
techniques by which is consistently applied by each business firm as to directed and managed all
business operation in systematic manner. The major reason of conducting the research is to
enhancing the knowledge and skills of learner in the concept of corporate governance and how it
interact within an organisation.
1.4 Research Aim
This is an essential component of investigation because entire working is done on the
basis of same. It provides guidelines to the researcher so that he can easily carry out work of
research by following a right way and attain success in exploring important things in relation to
study. The aim of this particular dissertation is Corporate Governance: The Board and the
Governors Interaction in the NHS Foundation trust.
1.5 Research Objectives
Research objectives are treated as important and essential aspects of study as it assists
researcher in developing suggestions or recommendations on the grounds of information that
have been collected from their research activities (Farrington and Palfreyman, 2012). Objectives
are closely linked with the aim of research. Main objectives of research are stated as below:
 To identify the concept of corporate-governance in NHS Foundation.
 To ascertain the implementation of rules and regulations as per the corporate governance
code of NHS foundation.
 To determine the importance of corporate governance in NHS foundation.
 To evaluate the interaction of Board and the governors in the NHS trust.
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1.6 Research Question
The current project is organised in order to know about corporate governance and the
interaction of board and governors in NHS foundation trust (Francis, 2013). Several questions
arise in this regard that are listed as below:
 What is the essential concept of corporate governance in NHS foundation?
 What is the implementation of rules and regulations as per the corporate governance code
of NHS foundation?
 What are the importance of Corporate governance in NHS foundation trust?
 How Board and the governors interact in the NHS trust?
1.7 Time Scale
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CHAPTER 2: LITERATURE REVIEW
This is one of the most eminent sections of research work as it provides in-depth
information and knowledge about objectives of investigation. Literature review is that part of
research that consists of information collected via secondary sources like books, journals,
websites or internet, etc.
2.1 Concept of corporate governance in NHS Foundation.
As per the view point of Hegazy, 2016, Corporate governance is the system of
rules,practices and processes by which a company is directed and controlled. Corporate
governance essentially involves balancing the interests of a a company's many stakeholders,such
as shareholders,management,customers,suppliers etc. Governance specifically refers to the set of
rules,controls,policies and resolutions put in place to dictate corporate behaviour. The board of
director is very crucial in governance (Galizzi and Miraldo, 2011). Good corporate Governance
creates a transparent set of rules and controls in which shareholders,directors and officers have
aligned incentives. Most companies strive to have a high level of corporate governance. In NHS
Corporate Governance can be defined as the systems and processes by which health bodies
lead,direct and control their functions,in order to achieve organizational objectives and by which
they relate to their partners and wider community. There is a broad agreement about the
principles underlying good governance in the public sector. The public expects Public bodies to
be well run and openly accountable and are required to demonstrate their compliance with the
legal and regulatory duties and responsibilities relating to:
 The Law- The NHS act,2006,The health and social care act2012 and a wide range of
other statutory duties.
 The NHS constitution- which sets out the rights and responsibilities of patients and staff.
The Department of Health-The operating Framework and other guidance and standards such as
the information governance kit,which covers the hospital's management of personal and
confidential information.
2.2 The implementation of rules and regulations as per the corporate governance code of NHS
foundation
According to the opinion of Storey, 2011, The NHS Foundation Trust code of
Governance(the code) was first published in 2006 and was revised in 2010.The ultimate goal of
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ensuring a strong governance structure is in place to enable high-quality patient care. The code
therefore builds on the significant update to the UK corporate governance code which was issued
in 2012.The aim of this code is to provide support for good governance by offering sound advice
and guidance. The code is based on the 'Comply and Explain' approach. It means that it is
possible to set more demanding standards that can be done through Hard Rules.
 Comply and Explain- The Provisions of the code do not represent mandatory guidance
and accordingly non-compliance is not in itself a nreach of NHS Foundation Trust
Condition. If there is a non compliance with this code the reasons for the same should be
explained. Satisfactory engagements between the board of directors,council of
Governors,Members and patients is crucial to the effectiveness of NHS foundation Trusts
corporate Governance approach.
 Behaviours- In NHS Foundation Trust code of governance best practices,principles and
structure and processes are set,But ultimately only directors and governors can
demonstrate and promote the effective Board Behaviour that is needed to guarantee good
corporate governance in Practice.
 Disclosure Requirements-To meet the requirements of comply and explain each trust
must comply with each of the provisions of the code(Which in some cases will require a
statement or information to be required in the annual Report) or,Where
appropriate,explain in each case why the trust has departed from the code.
2.3 The importance of Corporate governance in NHS foundation trust.
The Views on this topic are shared by Stafford and Stapleton, 2017, the need for
corporate Governance has arisen because of the increasing concern about the non-compliance of
standards of financial reporting and accountability by boards of directors and management of
corporate inflicting heavy losses on investors.
Importance of corporate Governance:
 Investors and shareholders of a corporate company needs protection for their investment
due to lack of adequate standards of financial reporting and accountability (Corporate
governance, 2017). There is increasing awareness among investors to have a positive
view on only those companies which are having good corporate governance practices.
 Corporate Governance is considered as an important means for paying heed to investor's
grievances.
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 Good corporate Governance enables the corporate firms to attract capital and perform
efficiently. This will help in winning investors confidence. Investors will be willing to
invest in the companies with a good record of corporate governance.
 The extent to which corporate enterprises observe the basic principles of good corporate
governance has now become an important factor for attracting foreign investment. Thus
It can be said that good governance practices must be effectively implemented and
enforced by self regulation and voluntary adoption of ethical code of business conduct.
The effective implementation of good corporate governance practices would ensure investor
confidence in the corporate companies which lead to greater Investment in them ensuring their
sustained growth (Kurunmäki and Miller, 2011). Thus good corporate governance would greatly
benefit the companies enabling them to thrive and prosper.
2.4 Board and the governors interact in the NHS trust.
As per the opinion of Meddings, 2014, The Foundation of effective relationship-building
between directors and governors is a clear understanding by both groups of the responsibilities
and boundaries of their respective roles.
In centre here are the statutory duties of each group and a clear view from trust on how it wishes
to engage with governors and support them in carrying out these duties. This view may be
developed internally.
 Chair-Interaction with governors – The Role of the chair with the governors is absolutely
critical. The chair typically puts a significant amount of time into developing the
relationship with his or her governors and ensuring that the information flows to and from
governors is effective. Some chairs say this area takes as much as 50% of their time in the
dual role as chair of the board of directors and chair of the council of governors. 60% of
the effectiveness of the director-governor relationship is determined by the personality
and the mindset of the chair and 40% by the processes which the trust has put in place.
 CEO and other Executive Directors interaction with Governors-In high-performing
organizations the CEO and EDs take an active involvement in the business of the
governors and commit time and effort to developing an effective relationship with them.
The Eds are the senior managers of the organization and are responsible for managing the
trust. Having access to them at appropriate times is therefore necessary to enable
governors to ask questions and have influence (Powell and et. al., 2017).
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 Non-executive directors(NED'S) including the senior independent director(SID)-
Interaction with governors. - NED'S do not undertake executive responsibilities for the
FT but sit on the board of directors to bring external expertise that allows them to
challenge and scrutinize the decisions of the Eds. The Governor's role is specifically to
hold the NED's individually and collectively to account for the performance of the board
of directors.
CHAPTER 3: RESEARCH METHODOLOGY
4.1 Introduction
This is considered as the most vital section of research project as different tools and
techniques are applied here in order to draw validate conclusion in context of theme of research.
This is important for the investigator to make some plans before carrying out research so that
work will be carried out in an organised and planned way as well as success can be achieved in
doing the same.
4.2 Research design
This is considered as a blue print as it provides guidelines for carrying out research
activities in appropriate direction. These can also be represented as total strategies that can be
utilised by research workers in order to understand the various concepts of given topic in an
organised way . They are also proved to be useful for determining all issues or problems that are
going to be faced by investigator in finding out the solutions for them. It is an effectual process
that is being used in gathering, evaluating and analysing the collected information. Different
types of research designs are utilised for accumulating data such as exploratory. It is used in
developing new findings that is not yet implemented by any other individual. On the other hand,
there is second method known as descriptive research design which is formulated to show the
participants in an accurate way. There are commonly three ways of collecting this information
that are observational , survey and case study methods. In this current project, descriptive
research design is followed as this helps in discovering all detailed information through in-depth
study.
4.2 Research philosophy
This is an important aspect that is used to explore thoughts and beliefs in which
information is gathered so that operation of researches are carried out in an effective and
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systematic way. There are commonly two different types of research philosophies that are
interpretivism and positivism. Positivism is the term that is used to discuss an approach to the
study of society that depends specifically on scientific evidences like statistics and experiments
in order to show a true nature of how society operates. In other words, it can be said that the
stable situations in economy and overall factors of research that is based on isolated aspects. On
the contrary, interpretivism is another approach to social science that is completely different
from positivism and used to understand as well as identify the actual requirement of making
changes (Taylor and et. al., 2011). This is based on the qualitative research which is a method of
investigation in social science and associated disciplines. In this present research, interpretivism
philosophies are utilised as they are proved to be more beneficial so that all the research
activities can be carried out effectually.
4.4 Research type
There are different types of researches that are used for aggregating relevant data for
research proposal. Common types of research methodologies are qualitative and quantitative
methods that can be used for gathering information about corporate governance. Quantitative
research is completely based on figures and numerical facts. It aims to measure the amount of
data and compares it with the past records as well as try to prepare project for upcoming days.
This methodology is the key to quantitative research as it provides common relation between
mathematical expression and empirical observation of quantitative relationship. In this process,
statistics which is a branch of mathematics is also used. On the contrary, qualitative research is
totally different from the former one as in this method, data is being collected, analysed and
interpreted by examining the viewpoints and thoughts of all people. This is very subjective in
nature and uses several actions for accumulating the information like questionnaire, interviews,
etc. This is to be noted that in this report, qualitative research methodology has been used as it
gives feedbacks of people and aids in taking correct decisions in relation to the topic.
4.5 Research approaches
This part is classified into two main types that are inductive and deductive framework. In
this project, qualitative research methodology has been used and thus, inductive approach is the
most suitable here (Williams Burton and Rycroft‐Malone, 2013). Main difference between
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deductive and inductive approach is that former one is an aimed and testing theory while the
latter one is concerned with creation of new concept from the collected data.
4.6 Methods of data collection
There are basically two types of methods that are used for collecting data and they are
primary and secondary sources. Primary one is gathered by conducting surveys and test. This is
considered as new or fresh information as these data are not applied by any other researchers in
previous days in their work of investigation (West and et. al., 2014). This information is
aggregated as per the need of research and in depth study is carried out here to attain the best
possible outcomes. Large sum of revenue get invested for achieving the effectual results from
research activities. On the other hand, secondary data is gathered by taking help of books,
journals, magazines, newspapers, etc. But these are those forms of data which have been already
collected in the past. Thus, there is very less possibility of making any mistake.
4.7 Data sampling
This is commonly a statistical technique that is utilised for choosing, manipulating as
well as evaluating a representative subset of data points. Probabilistic and non – probabilistic
testing tools are used in data sampling. In the current study, researcher has used purposive
sampling process as it is a piece of probabilistic sampling. This helps in taking proper sample
from whole population. Investigator has selected the specimen of 20 representatives who are
employees and currently working in NHS.
4.8 Ethical considerations
This part is essential as it helps in resolving obstacles and issues which emerge while
carrying out the research activities. Researcher should assure their respondents that the data
which they have collected is authenticate as well as private in nature. Thus, ethical values have to
be obeyed while conducting this project.
CHAPTER 4: FINDINGS AND RECOMMENDATION
Findings and Results
As per the above mentioned report it has been concluded that corporate governance plays
an effective role in managing and controlling all activities that are held in NHS and essential in
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carry out all business activities in systematic manner. Corporate governance concerned with
practice and procedure which are effective in attaining organisation's desired goals and
objectives. Corporate governance is effective in health and social care sector as to conducting all
business operation in well planned manner and also helps in attaining high growth and success
through implementing proper rules and policies. Corporate Governance has assumed great
importance in the wake of frauds,scams as well as increasing competition and globalization. It
lays down the parameters of accountability,control and reporting functions of the board of
directors. It also emphasizes the proper relationship among various participants – the board,
management,shareholders etc.
Tougher legal and regulatory provisions of corporate governance are required to check and
prevent default by companies. Looking at the complexity of the situation,it is quite evident that
only law cannot ensure good corporate governance without code of conduct and self regulations.
Laws are required to strike a balance in the objectives sought to be achieved by different interest
groups in companies but the aim of corporate governance is commitment to values,business
ethics and distinction between personal money and corporate funds.
Recommendation
Recommendations for a good corporate governance Practices are establishing a clear and
documented segregation between the roles and responsibilities of shareholders,the board of
directors and management,implementing an authority mix,providing education to the board of
directors as they are the key people who will going to effectively implement corporate
governance practices. There should be transparency in the workings of an organization especially
from the top management. The top management should lead from front in terms of applying
ethics in the workplace,if subordinates will see their managers and directors are following
corporate governance and ethical issues strictly it will urge them to follow the same with utmost
sincerity.
REFERENCES
Books and Journals
Dawkins, A., 2011. Boundary-crossing and governance “space” Negotiation of the professional
identity of secretariat staff in higher education (HE). Journal of Applied Research in
Higher Education. 3(1). pp.47-60.
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Deffenbaugh, J., 2012. It's the people in the boardroom. British Journal of Healthcare
Management. 18(7). pp.364-372.
Demirag, I. and Khadaroo, I., 2011. Accountability and value for money: a theoretical
framework for the relationship in public–private partnerships. Journal of Management
& Governance. 15(2). pp.271-296.
Farrington, D. and Palfreyman, D. eds., 2012 The law of higher education. OUP Oxford.
Francis, R., 2013. Report of the Mid Staffordshire NHS Foundation Trust public inquiry:
executive summary (Vol. 947). The Stationery Office.
Galizzi, M. M. and Miraldo, M., 2011. The effects of hospitals’ governance on optimal contracts:
Bargaining vs. contracting. Journal of health economics. 30(2). pp.408-424.
Hegazy, K. and et. al., 2016. Audit Committee roles and responsibilities in two English public
sector settings. Managerial Auditing Journal. 31(8/9). pp.848-870.
Kurunmäki, L. and Miller, P., 2011. The failure of a failure regime: from insolvency to de-
authorisation for NHS Foundation Trusts. Centre for Analysis of Risk and Regulation,
London School of Economics and Political Science.
Meddings, S. and et. al., 2014. Co-delivered and co-produced: creating a recovery college in
partnership. The Journal of Mental Health Training, Education and Practice. 9(1).
pp.16-25.
Powell, M. and et. al., 2017. “Strange animals”: hybrid organisations in health care. Journal of
health organization and management. 31(7/8). pp.746-762.
Stafford, A. and Stapleton, P., 2017. Examining the Use of Corporate Governance Mechanisms
in Public–Private Partnerships: Why Do They Not Deliver Public Accountability?.
Australian Journal of Public Administration. 76(3). pp.378-391.
Storey, J., 2011. Governance and organizational change. Routledge.
Taylor, R. M. and et. al., 2011. “Your place or mine?” Priorities for a specialist teenage and
young adult (TYA) cancer unit: disparity between TYA and professional perceptions.
Journal of adolescent and young adult oncology. 1(3). pp.145-151.
West, M. A. and et. al., 2014. Developing collective leadership for health care. King's Fund.
Williams, L., Burton, C. and Rycroft‐Malone, J., 2013. What works: a realist evaluation case
study of intermediaries in infection control practice. Journal of advanced nursing.
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