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Developing a federated model of General Practice: Board Sub Committees

"Move out of your comfort zone. You can only grow if you are willing to feel awkward and uncomfortable when you try something new." Brian Tracy, Author

A federation’s board of directors ("Board") may find it helpful from time to time to set up sub-committees to distribute workload, ensure that particular matters have special attention, or to bring a degree of separation of decision making from the main Board where this is appropriate.

The Board is responsible for the day to day management of the federation, subject to the articles of association and applicable laws and regulations. Directors of companies are under a statutory duty to exercise independent judgment without subordinating their powers to the will of others by delegation or otherwise, unless the constitution permits them to do so. Where a federation is a company, the board should therefore ensure that the articles of association permit them to delegate their powers and ensure that they only delegate authority to the extent permitted.

Assuming that the articles of association do permit the Board to form sub-committees and to delegate functions (as they generally do), the Board will need to consider what sub-committees might be required and what their roles and functions will be. My advice is to set up only what you absolutely need, where the Board is not in a position to manage the work, or it is not appropriate for them to do so. If you have too many sub-committees this will become unwieldy and the Board may start to lose its overview and lose touch with important aspects of the federation's work.

Any committees should have terms of reference. The terms of reference should set out clearly what the committee is there to do, how many members it will have and how they will be appointed. Additionally, it should be clear whether the committee is decision making or simply recommending to the Board who then make the decision.

One matter which I advise is dealt with by a sub-committee is directors' remuneration. In a private limited company, the Board has the power to determine the remuneration payable to directors for their services to the company, although the articles often permit shareholders to place a limit on the remuneration payable. However, federation companies may decide that it would be appropriate to form a remuneration committee which includes both directors and shareholders so that remuneration policy is developed in a transparent manner that is consistent with the long-term interests of the company.

As the federation gets busier, it may identify the need for sub committees to deal with other matters, such as finance, developing bids, or staffing matters.

"Nothing splendid has ever been achieved except by those who dared believe that something inside them was superior to circumstance." Bruce Barton, Executive

Thank you to specialist healthcare lawyer Alison Oliver at Ward Hadaway for her contribution to this blog.

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