NHS Confederation Group. Standing Orders - an aide memoire. Last updated: November 2012

Transcription

1 NHS Confederation Group Standing Orders - an aide memoire Last updated: November 2012 Concept and some drafting taken from Brighton and Sussex University Hospitals Rules of Procedure 1

2 CONTENTS 4 Introduction Distribution and review of standing orders Group Structure 5 General requirements of companies Registered office Displaying the company name Articles of Association Directors of the company General duties of directors under the 2006 Act Trustee and director insurance 7 Declarations of interests and register of interests Custody and sealing of documents Signature of documents 8 The NHS Confederation Charity Company type Charitable objects Articles of Association Limitation of members Register of members Annual General Meeting Filing requirements Appointment of Trustees Trustee recompense Trustee duties Code of Conduct Management team Charities and trading Sub committees 15 The NHS Confederation Group Company Limited Company type Articles of Association Nature of Business Members Limitations of members Register of members Annual General meeting Filing requirements Corporate Board Appointment of Directors Directors recompense 17 NHS Confederation (Employers) Company Limited Company type Articles of Association 2

3 Nature of Business Members Limitations of members Register of members Annual General meeting Filing requirements Non executive directors Executive directors Documents that should be referred to together with this aide memoire Scheme of Delegation Articles of Association for: NHS Confederation NHS Confederation Group Company Limited NHS Confederation (Employers) Company Limited 3

4 INTRODUCTION 1. Good governance provides the key to effective leadership, meaningful challenge and real accountability. Effective governance is not about process; rather it is about successful leadership and making manifest the values of the organisation. 2. Corporate Governance is the system by which companies and other board-led organisations are directed and controlled. Good governance provides ambitious, prudent and effective direction that helps to deliver success over time. It is the business of the board of directors and is separate from the day to day operational management. 3. These standing orders describe the corporate governance arrangements within the NHS Confederation group and also documents some decisions made by the Trustees and gives some background information to aid the reading of the rules. The standing orders relate to all of the companies within the NHS Confederation Group. They should be read in conjunction with the Articles of Association for the relevant entity which are filed at Appendices 1, 2 and 3, and with the Standing Financial Instructions and with the Scheme of Delegation. Distribution and review of Standing Orders 4. It is the duty of the Chief Executive to ensure that Trustees, Directors and officers and all new appointees are notified of and understand their responsibilities within the standing orders and Scheme of Delegation. 5. The standing orders shall be placed on both the Confederation s internal and external websites for the benefit of staff and members. 6. The standing orders will be reviewed every two years or as dictated by the Trustees. GROUP STRUCTURE NHS Confederation Charity NHS Confederation Group Co Limited Audit Committee Provides oversight for the Group Remuneration Committee NHS Confederation (Employers) Co Limited 4

5 GENERAL REQUIREMENTS OF COMPANIES Registered office 7. Every company must have a registered office. The registered office must be a physical location where notices, letters and reminders can be delivered to the company. 8. The registered Office of for all of the companies in the NHS Confederation Group is: Floor 4 50 Broadway London SW1H 0DB 9. If any person requests in writing the address of our registered office, or the location where they can inspect company records, or details of the records that we keep at the registered office, we are obliged to respond within five working days. Displaying the Company name 10. Every company must display a sign with its registered name at: its registered office; any inspection place; at any location at which it carries on business 11. It must also include its registered name in all business communications (hard copy and electronic). 12. The company's registered name should be included in all forms of business correspondence and documentation, whether in hard copy or electronic, including: business letters, notices and other official publications; business s; bills of exchange, promissory notes, endorsements and order forms; cheques purporting to be signed by or on behalf of the company; orders for money, goods or services purporting to be signed by or on behalf of the company; bills of parcels, invoices and other demands for payment, receipts and letters of credit. 13. Every company must disclose its registered name on its websites; it does not need to be included every page but it must be displayed so it can be easily read. Articles of Association 14. Every company is required to have articles, which are legally binding on the company and all of its members. The articles help to ensure the company's business runs smoothly and efficiently and sets out how decisions are taken by the members and directors. The articles cannot contain rules that are against the law. 15. Companies House must be notified every time the company makes changes to its articles. The articles are amended by special resolution and a copy of the resolution and articles are filed at Companies House. 5

6 Directors of the company 16. It is up to the members to appoint the directors who will run the company on their behalf. This means that the Trustees appoint the directors of Group Co and the directors of Group Co appoint the directors of NHS Employers. The general restrictions that prevent anyone becoming a director are: they must not have been disqualified from acting as a company director (unless the court has given them permission to act for a particular company); they must not be an undischarged bankrupt (unless they have been given permission by the court to act for a particular company); they must not be under the age of 16. General duties of directors under the 2006 Act 17. In summary, the seven general duties of a Director are: to act within the powers of the Company (section 171); to promote the success of the Company (section 172) ; to exercise independent judgment (section 173); to exercise reasonable care, skill and diligence (section 174); to avoid conflicts of interest (section 175); not to accept benefits from third parties (section 176); and to declare an interest in a proposed transaction or arrangement (section 177). Trustee and director insurance 18. The NHS Confederation has as part of its insurance cover, a Directors and Officers policy which covers claims made against directors and officers of the company for alleged wrongful acts carried out in the performance of their duties. The policy covers directors, trustees, committee members and officers of the company and its subsidiaries. The policy covers legal costs incurred in defence of any claim. 6

7 DECLARATIONS OF INTERESTS AND REGISTER OF INTERESTS 19. The Business Manager maintains the register of interests. 20. Upon appointment each Trustee or Director must complete a declaration of interest form and they are required to complete a new form at the beginning of every financial year and to report changes proactively during the year. 21. Every board meeting agenda will include the opportunity for members to report any new or additional declarations of interest and to report any possible conflicts of interest in the agenda items. 22. The Articles of Association for each company specify how conflicts shall be dealt with. CUSTODY OF SEAL AND SEALING OF DOCUMENTS 23. The Articles of Association for each company state when the company seal should be used. The seal is held by the Head of Governance. SIGNATURE OF DOCUMENTS 24. Where the signature of any document is required to initiate or defend legal proceedings involving the Confederation or one of its subsidiaries, it shall be signed by the Chief Executive or the Deputy Chief Executive, unless any enactment otherwise requires or authorises, or the Trustee Board shall have given the necessary authority to some other person for the purpose of such proceedings. 25. The Chief Executive, Deputy Chief Executive or nominated officers shall be authorised by the Board, to sign on behalf of the Confederation or one of its subsidiaries any agreement or other document (not required to be executed as a deed) the subject matter of which has been approved by the Trustee Board or board of a subsidiary to which the Board has delegated appropriate authority. 7

8 THE NHS CONFEDERATION CHARITY 26. The NHS Confederation is a charitable company regulated by both the Charities Commission and Companies House. Charity Number: Company Number: Date of incorporation: 23 January 2002 Articles of Association adopted: 25 June Company type: Private, limited by guarantee, no share capital, use of Limited exemption. 28. Charitable Objects: the Charity s objects are the relief of sickness and the preservation and protection of public health. 29. All business shall be conducted in the name of the Charity or one of its subsidiary companies. 30. Articles of Association: The Articles of Association were adopted on 25 June Limitations of Members: The company is a private limited company. The liability of each member is limited to no more than The members of the company are the members who subscribe in accordance with the Articles of Association adopted on 25 June Register of Members: The register of members is kept by the Head of Governance acting as Company Secretary and should be available for inspection by any member. 33. Annual General Meeting: There is no requirement under the Companies Act 2006 for the company to hold an annual general meeting, but the Articles lay out how a member can call a meeting if they so wish. Filing Requirements Companies House: 34. The Charity is required to submit annual financial statements to Companies House: o Accounting reference: 31 March o Annual Accounts deadline 31 December o Annual return deadline: 15 November 35. The Charity is required to submit an annual report to the Charity Commission o Annual return deadline: 31 January 8

9 o Annual Accounts deadline: o Summary Information Return 31 January Annually 36. The Charity s accounts and some information from the Annual Return submitted to the Charity Commission will be displayed on the public register of charities. Appointment of Trustees 37. The Articles of Association for the Charity dictate who shall be appointed a Charity Trustee. 38. Trustees are registered with the Charity Commission as Trustees of the NHS Confederation Charity and with Companies House as directors of the NHS Confederation charitable company. 39. Company law sets out who is disqualified from acting as a company director and these provisions apply to charities formed as a company limited by guarantee which includes the NHS Confederation. 40. Section 72 or the Charities Act 1993 disqualifies people who: Have unspent convictions for offences involving deceptions or dishonesty Are undischarged bankrupts Have been at any time removed from the Trusteeship of a charity by the Charity Commission or the courts Are disqualified from being a company director un the Company Directors Disqualification Act 1986 Have failed to make payments under county court administration orders Have made compositions (i.e. come to an arrangements with their creditors and have not been discharged) Trustee recompense 41. On 8 March 2010 the Charity Commission gave permission for the NHS Confederation to appoint a remunerated chairman at a maximum recompense of 50,000 pa. No increases to this remuneration can be made without Charity Commission consent. The position of Chair is made under a contract of service and not an employment contract although the recompense is paid via the payroll system. 42. No other Trustee is entitled to receive remuneration for their work other than reasonable expenses incurred on Confederation business and claimed in accordance with the NHS Confederation s staff expenses policy. Trustee duties 43. The Trustees are legally responsible for the operation and affairs of the Charity. The following is taken from the Good Governance Guide produced by the Charity Commission: Trustees have and must accept ultimate responsibility for directing the affairs of a charity, and ensuring that it is solvent, well-run, and delivering the charitable outcomes for the benefit of the public for which it has been set up. Compliance - Trustees must: 9

10 ensure that the charity complies with charity law, and with the requirements of the Charity Commission as regulator; in particular ensure that the charity prepares reports on what it has achieved and Annual Returns and accounts as required by law ensure that the charity does not breach any of the requirements or rules set out in its governing document and that it remains true to the charitable purpose and objects set out there comply with the requirements of other legislation and other regulators (if any) which govern the activities of the charity act with integrity, and avoid any personal conflicts of interest or misuse of charity funds or assets. Duty of prudence - Trustees must: ensure that the charity is and will remain solvent use charitable funds and assets reasonably, and only in furtherance of the charity's objects avoid undertaking activities that might place the charity's endowment, funds, assets or reputation at undue risk take special care when investing the funds of the charity, or borrowing funds for the charity to use Duty of care - Trustees must: use reasonable care and skill in their work as Trustees, using their personal skills and experience as needed to ensure that the charity is well-run and efficient consider getting external professional advice on all matters where there may be material risk to the charity, or where the Trustees may be in breach of their duties 44. Code of Conduct: Trustees agree to abide by the Code of Conduct which was introduced in June Management Team: In accordance with the Articles of Association the Trustees can appoint a chief executive to run the charity and its subsidiary companies. The chief executive appoints his or her own management team. 10

11 Chairman and Chief Executive: Division of Responsibility i Chairman of the Group 1 The chairman is not responsible for executive matters 2 The chairman s principal responsibility is providing leadership to and ensuring the effective running of the boards 3 The chairman is responsible for ensuring the board/s of directors as a whole plays a full and constructive part in the development and determination of the Group s strategy and overall objectives 4 The chairman is the guardian of the decision making process for the board of directors 5 The chairman is responsible for the general leadership of the board of directors and ensuring its effectiveness on all aspects of its role and setting its agenda 6 The chairman is responsible for ensuring the agenda of the board/s of directors takes full account of the important issues facing the organisation and the concerns of all board members. There shall be an emphasis on strategic, rather than routine issues. 7 Ensuring with the advice of the company/board secretary compliance with the board/s of directors approved procedures in including the schedule of matters reserved for their decision and each Committee s terms of reference 8 Taking the lead, with the company/board secretary in providing a properly constructed induction programme for new directors 9 Ensuring that the performance of the board/s of directors as a whole, its committees and individual non executive director members are periodically assessed Chief Executive of the Group The chief executive is responsible for executive matters. All members of the senior management structure report either directly or indirectly to him The chief executive s principal responsibility is the leading the Confederation The chief executive is responsible for developing and implementing the Group s strategy and communicating this to staff, members and stakeholders The chief executive is responsible for implementing the decisions of the board/s of directors and its committees The chief executive is responsible for the provision of information and support to the Board/s of Directors The chief executive is responsible for maintaining a dialogue with the chairman in the important strategic issues facing the Group and agreeing with the chairman an agenda for the board/s of directors an agenda that reflects these. Ensuring, in consideration with the chairman and the company/board secretary that the management team comply with the organisation s approved procedures including the schedule of matters reserved to the SMT for its decision Contributing to induction programmes for new directors ensuring that appropriate time is set aside for this Ensuring the performance reviews are carried out twice a year for each of the senior management team. Providing input into the wider evaluation process of the board of directors. 11

12 Charities and trading 46. Charities may engage in some types of trading. Compared to ordinary commercial companies charities enjoy advantages in tax treatment they receive in relation to trading and trading profits. 47. Charities may trade more or less freely in pursuit of their charitable objects but there are restrictions on engaging in trades the objective of which is to generate funds for the charity. In particular charities may not engage in such commercially-orientated trades where a significant risk to the Charity s assets would be involved. 48. Where trading (other than trading in pursuit of its charitable objects) involves significant risk to a charity's assets, it must be undertaken by a trading subsidiary. 49. Trustees of charities with one or more trading subsidiaries need to be aware of their responsibilities. In particular Trustees need to remember, in all decisions made in regard to a trading subsidiary, that the interests of the charity are paramount. The interests of a trading subsidiary, its directors, creditors or employees, must all be secondary to those of the charity. If the charity's assets are employed or put at risk for the benefit of the subsidiary, or its directors, creditors or employees, the trustees of the charity may be personally liable for any loss of, or decline in value of, the charity's assets. 50. The Trustees delegate that most of the NHS Confederation s work is conducted in its subsidiary company, NHS Confederation Group Co. 12

13 COMMITTEES OF THE BOARD OF TRUSTEES Audit Committee Summary purpose and authority 51. The audit committee is constituted to provide the board of trustees with an independent and objective review of its systems of internal control and compliance with laws and guidance. 52. The primary role of the audit committee is to conclude upon the adequacy and effective operation of the Group s overall internal control system. It is the role of the chief executive to implement a sound system of internal control agreed by the board. The audit committee provides independent monitoring and scrutiny of the processes implemented in relation to governance, risk and internal control. The committee should also review and challenge the group s risk framework to assure that there are appropriate controls in place. 53. The committee s work should focus on the framework of risks, controls, and related assurances that underpin the delivery of the Group s objectives. The committee is a crucial function in reviewing the Group s external reporting disclosures in relation to internal controls and finance in the Trustees annual report and accounts. Annual report to the board of Trustees 54. The audit committee shall produce an annual report to the board of Trustees which details the programme of work conducted each year, adherence to the Committee s terms of reference, and details of the positive contribution the audit committee had made to the governance of the Group. Review of effectiveness 55. The audit committee shall complete an assessment of its effectiveness on an annual basis. 13

14 Remuneration Committee Summary purpose and authority 56. The remuneration committee s role is to establish and monitor the level and structure of total reward for the identified directors currently the chief executive, executive directors, directors of the Networks and Countries - and such other members of the executive management as it is designated to consider. 57. Levels of remuneration shall be sufficient to attract, retain and motivate directors of the quality and with the skills and experience required to lead the Group successfully, but no more than necessary for this purpose. 58. There shall be an open and transparent procedure for developing policy on director remuneration and for setting the remuneration packages of individual directors. No director shall be involved in deciding his/her own remuneration. 14

15 NHS CONFEDERATION GROUP COMPANY LIMITED Company Number: Date of incorporation: 12 October 2004 Articles of Association adopted: 20 July Company type: Private, limited by guarantee, no share capital, use of Limited exemption. 60. Articles of Association: The Articles of Association were adopted on 20 July Nature of Business: 8514 other human health activities; 9111 business and employers organisations 62. Members: Members are specified according to the Articles of Association adopted 20 July There is only one member of the NHS Confederation Group Co which is the NHS Confederation Charity. 63. Limitations of Members: The company is a private limited company. The liability of each member is limited to no more than Register of Members: The register of members is kept by the Head of Governance acting as Company Secretary. 65. Annual General Meeting: There is no requirement under the Companies Act 2006 for the company to hold an annual general meeting although the Articles specify how a member can call an AGM if it wishes. Filing Requirements Companies House: 66. The company is required to submit annual financial statements to Companies House: o Accounting reference: 31 March o Annual Accounts deadline 31 December o Annual return deadline: 15 November 15

16 Corporate Board 67. In 2009 the Trustees agreed that most of the activity of the NHS Confederation would be conducted in the subsidiary company rather than in the Charity, and that the company would be governed by unitary corporate board comprised of non executive and executive directors where the Trustees acted as non executives. Specific Advice from the Charity Commission to the NHS Confederation on the composition of the board (March 2010) It is normal for some of the trustees and/or employees of a parent charity also to be directors of a trading subsidiary. In order to ensure that the trading subsidiary is managed in the interests of the parent charity, and to monitor its performance, some of the trustees and/or employees of the charity often become directors of the trading subsidiary. However, they must bear in mind that the charity and the trading subsidiary are different entities. Anyone involved with the administration of both has two distinct responsibilities, and it can at times be difficult to balance conflicting pressures. As a matter of good governance, the trustees of the charity and the directors of the trading subsidiary should not be exactly the same people. There should be both: at least one trustee of the charity, who is not a director or employee of the trading subsidiary; and at least one director of the trading subsidiary, who is not a trustee or employee of the charity. These people will be unconflicted as they have no conflict of interest in their roles. These unconflicted trustees and directors should advise their colleagues as to the proper course of action where the duties of those with dual responsibilities are in conflict. This will reduce the risk of any transaction between the parent charity and the trading subsidiary being challenged or questioned. Appointment of Directors 68. The Trustees appoint the directors of Group Company. 69. On 4 June 2009 Trustees agreed that there should be: 8 non executive directors drawn from the Trustees 4 specified executives i. The chief executive ii. The Director of Resources iii. The Director of Policy and Communications iv. The Director of NHS Employers Such other number of executives as the Trustees appoint so long as the executive directors did not outnumber the non executive members. 70. The chair of the Charity will act as chair of the company. 71. Directors recompense: Executive directors recompense is decided by the Remuneration Committee. 16

17 NHS CONFEDERATION (EMPLOYERS) COMPANY LIMITED Company Number: Date of incorporation: 6 October 2004 Articles of Association adopted: 13 June Company type: Private limited by guarantee, no share capital 73. Nature of Business: 9111 business and employers organisations 74. Articles of Association: The Articles of Association were adopted on 13 June Members: The sole member of the NHS Confederation (Employers) Co Limited is the NHS Confederation Group Co. 76. Limitations of Members: The company is a private limited company. The liability of each member is limited to no more than Register of Members: The register of members is kept by the Senior Business Planning Officer, NHS Employers. 78..Annual General Meeting: There is no requirement under the Companies Act 2006 for the company to hold an annual general meeting. Filing Requirements Companies House: 79. The company is required to submit annual financial statements to Companies House: o Accounting reference: 31 March o Annual Accounts deadline 31 December o Annual return deadline: 15 November The Directors 80. The Directors of NHS Confederation Group Co appoint the directors of NHS Confederation (Employers) Company Ltd. In April 2010 the board agreed that in addition to the chair there will be three non executives and three executive directors. Executive Directors 81. The three specified executive directors are: The NHS Confederation chief executive The NHS Confederation director of finance The director of NHS Employers 17

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