Chapter 2: Executive Summary
The following recommendations are made, to deliver the outcome that the governance of the sixteen NHS-linked charities is strengthened and that management and control of NHS-linked charities is independent of the relevant Health Board.
2.1 A Health Board should no longer be the corporate trustee of an NHS-linked charity.
2.2 Further work will be required after this Review to identify a precise legal mechanism for the appointment of the first independent Chair of an NHS-linked charity.
2.3 The open recruitment and appointment processes leading to the appointment of the second and subsequent Chair of an NHS-linked charity shall be determined by the trustees of that NHS-linked charity. The non-Health Board appointed trustees shall be in the majority in the process which selects the second and subsequent Chair.
2.4 The composition of the board of an NHS-linked charity should comprise the following elements:
(a) an independent Chair
(b) a majority of non-Health Board appointed trustees
(c) a minority of Health Board-appointed trustees
2.5 Health Boards should develop guidance on charity trustee nominations for Health Board-appointed trustees, which should be progressed via a suitable national shared forum involving all Health Boards.
2.6 Further work will be required after this Review to identify a precise legal mechanism for the appointment of the first non-Health Board appointed trustees of each NHS-linked charity.
2.7 After the tenure of a first non-Health Board appointed trustee comes to an end, the open recruitment and appointment processes leading to the appointment of a non-Health Board appointed trustee shall be determined by the NHS-linked charity. The non-Health Board appointed trustees shall be in the majority in the recruitment process which selects future non-Health Board appointed trustees.
2.8 A Trustee Recruitment Guide should be developed to reflect best practice in open recruitment, to support the NHS-linked charities in successfully recruiting non-Health Board appointed trustees. In this context, the Trustee Recruitment Guide should consider a range of matters including digital as well as non-digital means of advertising trustee vacancies, a trustee role description, and the use of a skills matrix.
2.9 NHS-linked charities should put in place induction training for all charity trustees as well as consider the need for ongoing training and support for all charity trustees.
2.10 The size of board of an NHS-linked charity should be no smaller than seven and no larger than eleven. The first Chair shall determine the size of the first board. Thereafter, an NHS-linked charity shall determine what size of board best suits its circumstances within these parameters from time to time, enabling local geographic considerations and other factors to be taken into account.
2.11 An NHS-linked charity should have a legally binding governing document of a type which involves limited liability for trustees. A statutory corporation model is recommended as the preferred route for this, with suitable conversion wording to enable continuity of use of the same charity number. Appendix 3 illustrates the potential themes to be covered in this governing document, which would be contained within legislation.
2.12 It is anticipated that Standing Orders may supplement the new governing document. The preparation of a template for such Standing Orders, for local adaptation, should be considered further by a shared national forum.
2.13 Each NHS-linked charity should put in a place a Code of Conduct to provide guidance and set expectations on board behaviours.
2.14 Each NHS-linked charity shall establish a Charity Liaison Group to support ongoing communications between it and the relevant Health Board.
2.15 Each NHS-linked charity shall establish a new framework of contractual relationships between it and the relevant Health Board, to underpin a range of operational and governance arrangements.
2.16 An NHS-linked charity should review the content of its annual report and accounts, to reflect the latest best practice guidelines issued by OSCR, to ensure an appropriate balance between narrative and numbers. It is noted that each NHS-linked charity will make its own decisions about what form of other communications best meets local needs, when sharing news of projects being funded.
2.17 NHS-linked charities should implement the governance and operational recommendations in this report which will contribute to a finding that a Health Board is not able to control an NHS-linked charity. This would underline the independence of the NHS-linked charity and separately lead to an end to the requirement to fully consolidate the financial statements of the NHS-linked charity within the Health Board accounts.
2.18 Each NHS charity should consider updating its registered name, in line with OSCR processes for doing so.
2.19 Each NHS-linked charity should consider its brand and any consequences in terms of a licence agreement with the relevant Health Board.
2.20 It would be beneficial for each NHS-linked charity to review its classification of funds, in particular to re-validate restricted funds. A framework to support classification may be usefully explored in a national shared forum.
2.21 It is helpful for NHS-linked charities to continue to delegate certain decisions and to have a clear power to do so, to facilitate the smooth running of the charity and to bring in the valuable insight and expertise of others, within a defined framework. It is recommended that the new governing document for each NHS-linked charity makes specific reference to the power to delegate, to bring additional clarity and transparency to this area of decision-making. The power to delegate is therefore included in the illustrative governing document in Appendix 3.
2.22 In light of this Review, all existing Delegated Authorities should be reviewed and updated by the relevant NHS-linked charity, to reflect the outcome of this Review and the new operating practices which will emerge. In that context, the process for timely decision-making should be considered, as part of the updating of Delegated Authorities.
2.23 Each NHS-linked charity should deliver induction training to all those holding a Delegated Authority, to ensure they have a good understanding of the scope and limits of their authority, and the processes for escalating decisions involving financial amounts above the threshold set in the Delegated Authority.
2.24 Each NHS-linked charity should review its fundraising policies and procedures, and consider signing-up to the Fundraising Guarantee to commit to best practice fundraising.
2.25 Prior to the implementation of the recommendations in this Report, NHS-linked charities should identify and consider the range of future compliance actions arising, to support smooth handover to the incoming trustees. These compliance matters should be explored further in a national shared forum.
2.26 A suitable preparation and transition period for the implementation of these recommendations should be adopted, to enable practical arrangements to be made in advance of the implementation date on which many of the above changes would go live.
2.27 It is recommended that a date of 1st April is considered as a future implementation date, to match the start of the accounting period of the NHS-linked charities.
2.28 It is recognised that significant further work will be required by the Health Boards and NHS-linked charities to plan effectively for both the governance and operational changes recommended in this report. We recommend the use of a national shared forum as a means of co-ordinating various aspects of the preparations and post-implementation date work.