Foundation Trusts (FTS) have been introduced to move away from the highly centralised system of 'command and control', previously used for the planning and direction of National Health Service hospital trusts. FTS are not-for-profit, public benefit corporations. In comparison with hospital trusts, FTS have a significant degree of managerial and financial freedom. They can, for example, retain surpluses and borrow for investment.
The governance structure for FTS is designed to achieve local accountability. FTS have a duty to engage with their local communities and encourage local people to become governors who, on appointment, sit on a Council of Governors. One of the statutory roles of the governors is to hold the non-executive directors individually and collectively to account for the performance of the board of directors.
The board of directors is a unitary board, responsible for the day-to-day running of the FTS and formed of both non-executive and executive members. At least half of the directors, including the Chairman, are expected to be non-executive and judged to be independent.
Non-executive directors are remunerated for the work they undertake with the FTS. The Code of Governance for FTS states as a general principle: 'levels of remuneration should be sufficient to attract, retain and motivate directors of the quality and with the skills and experience required to lead the NHS foundation trust successfully .......' The Code goes to state: 'levels of remuneration for the chairman and other non-executive directors should reflect the time commitment and responsibilities of their roles.'
The FTS governance model has a number of features of interest to higher education sector. These include:
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