The impact of healthcare board characteristics on NHS trust performance

IMPACT

This article provides insights for NHS foundation trusts (FTs) that have adopted, or are planning to adopt, changes to their boards’ style and structure to improve their governance and performance. Results revealed that, to improve performance, FTs should try to minimize turnover on the board of directors; improve attendance at board meetings; and increase the number of non-executive directors on the board. Further, increasing clinical expertise on the board would benefit financial performance and produce a better Care Quality Commission (CQC) score. Such implications are also relevant to other healthcare settings which have similar institutional setups, particularly those in Europe.

ABSTRACT

This article explores the determinants of financial and non-financial performance of a very important sector in the UK that seems to be overlooked in the previous literature. This article examines the relationship between board characteristics and performance of the NHS foundation trusts aiming to provide evidence and enhance our understanding of which characteristic of the these foundation trusts’ board have significant roles in enhancing their performance. Based on publicly-available annual reports, both profitability and the effectiveness of public hospitals were found to be influenced by board structure. Board stability (in terms of the turnover of directors), clinical representation on the board, board meeting attendance, the number of non-executive directors on the board, and the CEO’s length of service were notably positive performance indicators.

KEYWORDS:

• Board characteristics
• board stability
• chief executive officer (CEO)
• England
• financial and non-financial performance
• hospitals
• NHS