Sir David Walker has published his interim review of corporate governance in the UK financial system. He was appointed by the Prime Minister and his work is being undertaken, and published, under the auspices of HM Treasury, consequently Healthcare Governance Review believes that ‘The Walker Review of Corporate Governance’ will eventually impact NHS boards.
Sir David believes that the UK Combined Code on Corporate Governance (which forms the basis of Monitor’s Code of Governance for NHS foundation trusts) remains fundamentally “fit for purpose.”
He report, however, highlights the following opportunities for enhancing board effectiveness:
– the key emphasis for the future, he argues, should be on improving board behaviour, particularly in relation to non-executive directors challenging management, rather than on introducing a new governance framework.
– board composition should give greater regard to relevant expertise rather than the fulfilment of formal independence criteria.
– the time commitment required of non-executive directors, and the implications of this for the number of board positions that should be undertaken by one individual, should be carefully considered.
– consideration needs to be given to the pivotal role played by the Chair in the effectiveness of the board.
– non-executive directors should be provided with greater in-house support in order to fulfil their role.
– a process of independent board evaluation should be undertaken by external evaluators every 2-3 years and disclosed in the annual report.
Sir David’s interim report and associated information can be downloaded from HM Treasury here.
Readers might also like to read the short blog piece from Miles Templeman at the Institute of Directors, here.