Fit and Proper Directors Policy

1.0 Introduction

1.1 Regulation 5 of the Health & Social Care Act 2008 (Regulated Activities) Regulations 2014 recognises that individuals who have authority in organisations that deliver care are responsible for the overall quality and safety of that care.

1.2 It applies to a provider’s board directors, board members and equivalents, who are responsible and accountable for delivering care, including associate directors and any other individuals who are members of the board, irrespective of their voting rights. Directors are the group of people constituted (formally or informally) as the decision-making body of the organisation. The regulation applies to interim positions as well as permanent appointments. It also includes trustees of charitable bodies and members of the governing bodies of unincorporated associations.

1.3 To ensure that Clinical Partners complies with the regulation, it will assess Directors to ensure that it does not have an unfit director in position. It is for Clinical Partners to determine which individuals fall within the scope of the regulation, and CQC will take a view on whether we have done this effectively.

2.0 Purpose

2.1 To ensure that Clinical Partners has robust systems for assessing the "fitness" of Directors.

2.2 That there is a process in place for regular review of compliance with this regulation.

2.3 Clinical Partners will maintain records to evidence compliance with this Requirement.

3.0 Definitions

3.1 Director

A director is defined by the CQC as follows:

'Director' includes all board level appointments of NHS foundation trusts, NHS trusts and special health authorities and other bodies carrying on a regulated activity. Directors are responsible for the overall quality and safety of care and for making sure that care meets the requirements of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014. It includes executive and non-executive, permanent, interim and associate positions, irrespective of their voting rights.                          

3.2 Good character

The CQC defines good character as:

“Not the objective test of having no criminal convictions but instead resets upon a judgement as to whether the person’s character is such that they can be relied upon to do the right thing under all circumstances. This implies discretion for boards and councils in reaching a decision and allows for the fact that people can and do change over time.”

3.3 What constitutes a breach

• The regulation is breached if a provider has in place someone who does not satisfy the fit and proper persons check. Evidence of this could be if:

• A director is unfit on a ‘mandatory’ ground, such as a relevant undischarged conviction or bankruptcy. The provider will determine this.

• A provider does not have a proper process in place to enable it to make the robust assessments required by the fit and proper person checks.

• On receipt of information about a director’s fitness, a decision is reached on the fitness of the director that is not in the range of decisions that a reasonable person would make.

• A director has been responsible for, been privy to, contributed to or facilitated any serious misconduct or mismanagement (whether unlawful or not) while carrying on a regulated activity or providing a service elsewhere, which if provided in England, would be a regulated activity. 

4.0 Fitness checking process

4.1 Clinical Partners is responsible for the appointment, management and dismissal of its directors. We must be able to show evidence that appropriate systems and processes are in place to ensure that all new and existing directors are, and continue to be, fit and that no appointments meet any of the unfitness criteria set out in Schedule 4 of the regulations.

4.2 Where we consider that a role requires specific qualifications, we will make this clear and will only appoint those candidates who meet the required specification, including any requirements to be registered with a professional regulator.

4.3 We will assess and check that the candidate holds the required qualifications and has the competence, skills and experience required, (which may include appropriate communication and leadership skills and a caring and compassionate nature) to undertake the role.

4.4 We will follow the various guidelines that cover value-based recruitment, appraisal and development, and disciplinary action, including dismissal for chief executives, chairs and directors, and to have implemented procedures in line with the best practice. This includes The Seven Principles of Public Life (Nolan principles).

4.5 Clinical Partners will make every reasonable effort to assure itself about an individual by all means available and that it has addressed the issue in the light of any new and additional information. This will include an assurance that the review process ensures that the provider meets Regulation 5.

4.6 We will ensure that the following information specified in Schedule 3, is available to be supplied to the Commission, if required, in relation to each Director for Clinical Partners.

• Proof of identity including a recent photograph.

• Evidence of a DBS check where applicable relating to children and vulnerable adults.

• Satisfactory evidence of conduct in previous employment concerned with the provision of services relating to:

• Where a director has been previously employed in a position whose duties involved work with children or vulnerable adults, satisfactory verification, as far as reasonably practicable, of the reason their employment in that position ended.

• As far as it is reasonably practicable to obtain, satisfactory documentary evidence of any qualification relevant to the duties for which the person is employed or appointed to perform.

• A full employment history, together with a satisfactory written explanation of any gaps in employment.

• Satisfactory information about any physical or mental health conditions which are relevant to the person’s capability, after reasonable adjustments are made, to properly perform tasks which are intrinsic to their employment or appointment for the purposes of the regulated activity.

4.7 These records will be maintained by HR.

5.0 Determining fitness

5.1 A new director's fitness will be reviewed and agreed by the Board prior to appointment. This review will include the following:

• An assessment to ensure that a person has not been responsible for, privy to, contributed to, or facilitated any serious misconduct or mismanagement in the carrying on of a regulated activity. This includes investigating any allegation of such and making independent enquiries.

• Refusal of any person who has been responsible for, privy to, contributed to, or facilitated any serious misconduct or mismanagement (whether lawful or not) in the carrying on of a regulated activity.

• If a director has been previously implicated in a breach of a health and safety requirement or another statutory duty or contractual responsibility because of how the entire management team organised and managed its organisation's activities. In this case, Clinical Partners will establish what role the director played in the breach so that they can judge whether it means they are unfit. If the evidence shows that the breach is attributable to the director's conduct, Clinical Partners must find the Director unfit.

• Clinical Partners understands that whilst Information on when convictions, bankruptcies or similar matters are considered to be 'spent' there is no time limit for considering serious misconduct or responsibility for failure in a previous role.

5.2 Where a provider considers the individual to be suitable, despite existence of information relevant to issues identified in Schedule 4, Part 2, the provider's reasons should be recorded for future reference and made available on the HR file.

5.3 If a Clinical Partner discovers, following appointment, information that suggests a person is not of good character after they have been appointed to a role, the provider must take appropriate and timely action to investigate and rectify the matter.

5.4 Determining misconduct and mismanagement is the responsibility of Clinical Partners Board members. To do this they will make a judgement using the guidance produced by CQC on the meaning of misconduct and mismanagement (please see Appendix). Any determined misconduct may result in Clinical Partners either not employing the Director or dismissal under the Disciplinary Procedure.

6.0 Fitness revalidation

6.1 Clinical Partners will assess and regularly review the fitness of directors to ensure that they remain fit for the role they are in.

6.2 Directors will make an annual declaration to the board that there have been no changes to their fitness based on the assessed risk to business delivery and/or to the people using the service posed by the individual and/or role.

7.0 Notification of Changes

7.1 Clinical Partners is required to notify CQC of a change of director. This includes when there is a change of director membership or where there is a merger or acquisition. CQC’s notification system will require the CEO to declare that the provider has made appropriate checks to help reach a judgement that all directors are deemed to be fit and that none meet any of the unfit criteria.

8.0 References

Regulation 20

https://www.legislation.gov.uk/ukdsi/2014/9780111117613/regulation/20

Regulation 5

https://www.legislation.gov.uk/ukdsi/2014/9780111117613/regulation/5

The Seven Principles of Public Life

https://www.gov.uk/government/publications/the-7-principles-of-public-life

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Appendix: CQC Guidance

Serious mismanagement or misconduct

What is misconduct? “Misconduct” means conduct that breaches a legal or contractual obligation imposed on the director. It could mean acting in breach of an employment contract, breaching relevant regulatory requirements (such as mandatory health and safety rules), breaching the criminal law or engaging in activities that are morally reprehensible or likely to undermine public trust and confidence.

What is mismanagement? “Mismanagement” means being involved in the management of an organisation or part of an organisation in such a way that the quality of decision making and actions of the managers falls below any reasonable standard of competent management. The following are examples of behaviour that may amount to mismanagement:

Transmitting to a public authority, or any other person, inaccurate information without taking competent steps to ensure it was correct.

• Failing to interpret data in an appropriate way.

• Suppressing reports where the findings may be compromising for the organisation.

• Failing to have an effective system in place to protect staff who have raised concerns.

• Failing to learn from incidents, complaints and when things go wrong.

• Failing to model and promote standards of behaviour expected of those in public life, including protecting personal reputation, or the interests of another individual, over the interests of people who use a service, staff or the public.

• Failing to implement quality, safety and/or process improvements in a timely way, where there are recommendations or where the need is obvious.

When proven misconduct or mismanagement should be assessed as “serious”

Providers will have to reach their own decision as to whether any facts that are alleged reach the threshold of being “serious misconduct or mismanagement”. The Shorter Oxford English Dictionary defines serious as:

“Important, grave, having (potentially) important especially undesired consequences, giving cause for concern of significant, degree, amount, worthy of consideration”.

Misconduct differs from mismanagement, in that a single incident of misconduct may be so serious that it amounts to serious misconduct, whether the provider also concludes that this was incompatible with continued employment or not.

However, any serious misconduct renders a director unfit within the terms of the fit and proper person requirement.

However, an isolated incident is unlikely to constitute serious mismanagement unless it is so serious that it calls into question the confidence of the organisation and the public in the individual concerned.

Serious mismanagement is likely to consist of a course of conduct over time. Any assessment of its seriousness needs to consider the impact of the mismanagement on the quality and safety of care for people who use the service, the safety and well-being of staff, and the effect on the viability of the provider.

Not all misconduct or mismanagement in which a director has had some involvement will reach the threshold of “serious”. Where there is evidence of misconduct or mismanagement that is not judged to be “serious”, the provisions of Regulation 5(3)(d) do not apply. However, it will be for the provider (as the employer) to determine the most appropriate response, to ensure that performance is managed and the quality and safety of services is assured.

A provider could consider isolated incidences of the following types of behaviour to amount to misconduct or mismanagement that does not reach the required threshold of seriousness:

• intermittent poor attendance

• minor breaches of security

• minor misuse of an employer’s assets

• failure to follow agreed policies or processes when undertaking management functions where the failures had limited repercussions or limited effects or were for a benevolent or justifiable purpose.

The following are examples of misconduct and mismanagement that providers would be expected to conclude amounted to serious misconduct or mismanagement, unless there are exceptional circumstances that make it unreasonable to determine that there is serious misconduct or mismanagement:

• fraud or theft

• any criminal offence other than minor motoring offences

• assault

• sexual harassment of staff

• bullying

• victimisation of staff who raise legitimate concerns

• any conduct that can be characterised as dishonesty, including:

  • deliberately transmitting information to a public authority or to any other person, which is known to be false

  • submitting or providing false references inaccurate or misleading information on a CV

  • disregard for appropriate standards of governance, including resistance to accountability and the undermining of due process Regulation 5: Fit and proper persons: directors (guidance for providers and inspectors)

  • failure to make full and timely reports to the board of significant issues or incidents, including clinical or financial issues

  • repeated or ongoing tolerance of poor practice, or failure to promote good practice, leading to departure from recognised standards, policies, or accepted practices

  • continued failure to develop and manage business, financial, or clinical plans.

As part of reaching an assessment as to whether any actions of omissions of the director amount to “serious misconduct or mismanagement”, providers should consider whether an individual director played a central or peripheral role in any wider misconduct or mismanagement. The more central the role of the director, the more likely it is that the conduct of the director should be assessed to be serious misconduct or mismanagement. The provider should also consider whether there are any mitigating factors that could be relied on to downgrade conduct that should otherwise be assessed to be serious misconduct or mismanagement so that the conduct did not meet that threshold of seriousness.

Factors to consider around concerns regarding serious misconduct or mismanagement

Please note the following points:

• The relevant matters can arise either in the director’s current role, in a former role within the provider’s organisation, when the director carried out any role where he or she was concerned with a service that is regulated by CQC or which, if provided outside the UK, would be a regulated activity if the activity was carried out within the UK.

• Allegations about a director’s conduct while engaged in any other type of business or non-business activity is not relevant for Regulation 5(3)(d), but it is likely to be relevant to the director’s good character (Regulation 5(3)(a)) and/or his or her competence, skills and experience (Regulation 5(3)(b)).

• A director’s conduct comes within Regulation 5(3)(d) if he or she has been “responsible for” serious misconduct or mismanagement – namely that he or she was one of the decision-makers that led to the serious misconduct or mismanagement.

• A director’s conduct comes within Regulation 5(3)(d) if he or she has “contributed to” serious misconduct or mismanagement – namely where the director was not one of the lead decision-makers that led to the serious misconduct or mismanagement

• but where, by action or omission, the director took some significant step or steps to assist the lead decision-makers who were responsible for that misconduct or mismanagement.

• A director’s conduct comes within Regulation 5(3)(d) if he or she has “facilitated” any serious misconduct or mismanagement – namely that he or she took steps or failed to take steps that he or she ought to have taken that enabled those primarily

• responsible for the misconduct or mismanagement to carry out the acts or omissions that constituted the serious misconduct or mismanagement.

• A director’s conduct also comes within Regulation 5(3)(d) if he or she has been “privy to” serious misconduct or mismanagement, in that the director was aware that misconduct or mismanagement was happening in an organisation and failed to respond to that knowledge by acting in an appropriate manner.

An appropriate response to serious misconduct or mismanagement will depend on the circumstances and the internal governance arrangements of the organisation in which the director worked, but it could include:

• drawing the serious misconduct or mismanagement to the attention of an appropriate senior member of staff

• making a formal complaint

• drawing the serious misconduct or mismanagement to the attention of a suitable person outside the provider’s organisation. 

Providers would be entitled to conclude a director had been “privy to” serious misconduct or mismanagement if the director knew sufficient details of that misconduct or mismanagement (or the circumstances were such that it was reasonable to conclude that the director ought to have known of that mismanagement or misconduct) to require appropriate action by the individual and failed to take any appropriate action in a timely manner.

Good character

There is no statutory guidance as to how ‘good character’ in Regulation 5(3)(a) of the 2014 Regulations should be interpreted.

However, the following are some of the features that are normally associated with ‘good character’:

• honesty

• trustworthiness

• integrity

• openness (also referred to as transparency)

• ability to comply with the law.

To consider that a director is of ‘good character’, the registered provider should be able to regard the director as a person in whom the provider, CQC, people using services and the wider public can have confidence, and who will comply with the law.

Factors for providers to consider when assessing ‘good character’ 

Providers must have regard to the following matters specified in part 2 of schedule 4 to the 2014 Regulations when assessing whether a director is of good character:

• convictions of any offence in the UK

• convictions of any offence abroad that constitutes an offence in the UK

and

• whether any regulator or professional body has made the decision to erase, remove or strike off the director from their register.

Other things to look for in assessing good character

When making decisions about character, providers would also be expected to consider:

• the prior employment history of the director, including the reasons for leaving whether the director has ever been the subject of any investigations or proceedings by a professional or regulatory body

• whether the director has ever breached any of the Nolan Principles of Public Life

• whether the director has ever breached any of the duties imposed on directors under the Companies Act

• the extent to which the director has been open and honest with the provider

• any other information that may be relevant, such as disciplinary action taken by an employer.