Developing a federated model of General Practice: Setting board remuneration
As much as 85% of the operating budget of any organisation is invested in salaries and benefits and the question is, "Are you getting maximum return out of those people?" * Brian Tracy.
For the newly established GP Federation, with no income and limited investment, it is clearly going to be hard, if not impossible, to start paying salaries to Board members. For that reason we advocate the new Board banks the hours spent in developing the company and is paid out as the contracts start to generate income.
This of course makes it a test to get people to come forwards; however, I can confirm as yet we have not failed to put a Board of high quality Directors in place within any of the Federations we support. What this has though done is really caused people to stop and consider fully the implications of becoming a Director.
As a result my sense is that we have the right people, with the right skills and mindsets coming forwards and seeking election. They bring a hunger and desire for success, along with a willingness to own and shape the destiny of the Federation. I am also convinced this has seen people putting in the "extra yards and miles" in pursuit of success.
When it does come to them setting the pay and conditions my advice is that you set up a sub committee from within the Federation, and get a mix of Directors and Shareholders, an equal number of each, to establish both the pay and conditions. The reason for the equal number is that the decision here is a fundamental part of establishing the company, where we cannot afford to have a fall out between the Board and the Shareholders. For that reason even a majority decision could be viewed as unhelpful, hence we seek to get consensus within the group meaning an even number is possible. Ultimately a majority decision can be accepted; however, the key to this is that if we pay very little, you will not have a board for long.
There are key factors to be considered at this very early stage, linked to the set up and running of the company; however, only as the company progresses can you really start to finesse the salary and benefits, when you will be able to consider for example, company performance, individual performance, comparisons with other Federations and some research across other similar companies.
What is clear though is that the Board should not be allowed to set their own pay and conditions! (I have seen this already appear in the articles for one federation I was asked to review). I should also add that we use exactly the same system for our ongoing support of Federations, where we are prepared to work "at risk" in the same way as the board.
This way of working applies beyond the initial workshops to set up the federation, or where the federation is already established. We are prepared to offer the board further help and support on an "at risk" Service Level Agreement, for continued work to support the board and the federations, particularly as right now we accept the federations do not have the income to support the work required around developing business cases, negotiating contracts, writing bids and tenders, reducing expenses for member practices, increasing income or providing regular hands on management and support to the board, on a consultancy basis. This approach will allow federations to plan ahead safe in the knowledge of maximum costs.
Lastly, please keep in mind that "People can't do somethin' themselves, they wanna tell you that you can't do it". Chris Gardner, Entrepreneur, author and inspiration for the film "The Pursuit of Happyness".
Please don't let the detractors dissuade you before you have even tried. We have enough evidence within our own client base to show that this way of working is not only possible, it is already happening.
Next time we will start to explore the process of risk management for the new board.