Good Governance Handbook - HQIP

Governance principle 6: Delegation and reservation
Boards will set out how they govern through a system of delegation and reservation.
The board will overtly decide what decisions it reserves (or holds) to itself as a
governance responsibility, and those it will delegate elsewhere. The most significant
delegation is usually to management, but boards may also delegate to sub-groups of
the board itself, to advisors, to partners or through other controlled means. Boards
will describe the limits and substance of all delegations and reservations.
Typical forms of delegation within an organisation, aside that to management, will
include formally agreed delegation to board sub committees. These should be few in
number and not confused with management groups often misleadingly called
‘committees’.
The only required committees are audit and remuneration & appointments, although
many organisations will have a charitable trust committee and mental health service
providers (the ‘Managing Authority’) and commissioners (the Supervisory Body) will
require appropriate structures and assurance for their application of Deprivation of
Liberty Safeguards (DOLS) and review.
Advice over the years has also variously recommended clinical governance/quality,
investment and risk committees.
• Audit committee – a sub-committee of the board comprising non-executive
directors, but not the Chair or Vice Chair, who will assure the board that ALL
the governance systems and processes including clinical are working. The
audit committee will have a special relationship with the internal auditors, and
may invite executive colleagues to attend and participate in meetings. Better
practice (Audit Committee Handbook, HFMA 2011) indicates that the audit
committee should have at least one closed meeting each year without
management present in order to provide feedback and discuss candidly the
auditor’s relationships with management and the adequacy of resources
available.
• Remuneration and appointments committee – which will oversee
appointments to the board and all matters relating to remuneration and pay
for board members. It is very important that the remuneration and
appointments committee is able to show proper process to explain why
appointments have been made to the board, and why particular rewards
packages have been agreed.
• Risk/investment committee – which will look at the prospective risk
environment and help the board gauge its appetite for and approach to risk.
This committee is rehearsed in the approach taken to governance by Sir David
Walker’s review of the banks, and the investment committee
recommendations by Monitor. This committee will have a key role in
developing the organisation’s risk appetite.
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