HSE Chief Operations Officer, Laverne McGuinness writes about the important role which boards play in the governance of organisations and the current situation regarding Compliance Statements.
On an annual basis, the HSE provides funding to almost 2,000 agencies to deliver Services on behalf of the HSE. Of the approximately €3 billion provided, €2.4 billion goes to 44 entities which are known as Section 38 Agencies.
In return for this funding, Section 38 agencies are required to enter into a formal Service Arrangement, which serves as the ‘contract’ between the HSE and the agency. This Arrangement sets out the type and volume of service to be provided, as well as the quality and safety standards to be adhered to.
The importance of their roles as Governors of the organisations was emphasised as well as the significant responsibilities which come from being a Director of a Board.
Process
In December 2013 the HSE sought to strengthen its relationship with the Boards of the Section 38 Agencies and in particular it;
- Established a formal engagement process with the Chairs of the Boards. This includes formal meetings twice a year
- Introduced a new Compliance Statement whereby the Chair and another Director of the Board signs and confirms on behalf of the Board that the organisation had complied in full or in part with 8 key areas under their Service Arrangement. These are Governance, InInternal Code of Governance, Risk Management, Remuneration, Finance, Capital Assets, Taxation and Procurement
- Defined best practice for Boards and corporate governance arrangements.
As part of the engagement process a draft copy of a Compliance Statement template, as well as the Board and Corporate Governance requirements were circulated to the Chairs of each Section 38 agency for their feedback and input. The final documentation then issued in January 2014.
The Compliance Statement is a two page document which when signed confirms that the Board have sought and obtained assurances that the Provider organisation is in compliance with the 8 key areas set out above.
To date 38 of the 44 agencies have returned their Compliance statements and the remainder are in process.
Part 2 of the Document which accompanies the Compliance Statement sets out Board and Corporate Governance Requirements which are in line with good practice. These requirements cover the selection of Directors, length of tenure, committees of the Board, duties and responsibilities etc. Both the Compliance Statement and the Board and Corporate Governance requirements uphold the legal requirements set out in the various Charters and Memorandums of Association which may vary from agency to agency.
A meeting was held in December 2013 with the Chairs of the Boards. The importance of their roles as Governors of the organisations was emphasised as well as the significant responsibilities which come from being a Director of a Board and the requirement that they assure themselves regarding the relevant affairs of the agency. Whilst some of the agencies have very robust governance arrangements in place, it was fully acknowledged by the HSE that given that the Compliance Statement was to apply retrospectively to the Financial year 2013, that not all agencies would be fully in compliance. These agencies were afforded the opportunity to put in place a plan during 2014 to ensure they will achieve compliance.
Each chairperson was asked to formally confirm by the end of January the willingness of their Board to complete the Compliance Statement.
Progress to date
By the beginning of February all agencies confirmed that they were willing to sign up to the compliance process.
Each agency was requested to submit a completed statement of compliance by the end of May 2014
To date 38 of the 44 agencies have returned their Compliance statements and the remainder are in process and have been delayed mainly due to dates for Board meetings or conclusion of audits.
New service arrangements are in the final stage of completion. All Section 38 agencies were issued with Continuity letters in December 2013 which continue to have contractual force.
Engagement
A second meeting was held with the Section 38 Chairs in June 2014 which provided an opportunity for the Chairs and the HSE to engage in relation to various issues including compliance statements, new Service Arrangements and Service Planning etc.
An information session with an expert in the field was also arranged for this session.
The next meeting is planned to take place in November 2014 and an information session by a relevant expert will also be included as part of that engagement.
