With the 1 July deadline passed, there’s no time to waste for aged care leaders to ensure they understand and correctly apply the quality standard on organisational governance, writes Michael Goldsworthy.
Standard 8, Organisational Governance is a game changer for governing bodies, be they boards, committees of management or trustees, along with chief executive officers, executives or managers of aged care organisations. Because it holds the governing body accountable for the organisation’s compliance with the Aged Care Quality Standards.
The Standard 8 Organisation Statement could not be clearer on the legal and governance roles and responsibilities of all governing bodies’. It sates: “the governing body is responsible and ultimately accountable for the delivery of safe and quality care and services.”
Standard 8 presents directors, chief executive officers and executives or managers with the following eight key considerations.
1. Principles underpinning aged care reform
The two key principles underpinning all aged care reforms including the standards are:
- consumer directed care (CDC), the creation of full consumer choice and control
- consumer service options and pathways, he establishment of a competitive aged care marketplace.
As a consequence, the transition from the government-funded welfare paradigm to a customer‑driven, competitive market paradigm is well progressed.
2. The definition of a governing body
A governing body is defined by the Aged Care Quality and Safety Commission as: “the individual or group of people with overall responsibility and ultimate accountability for the organisation. This includes responsibility for the strategic and operational decisions that affect the safety and quality of care and services.”
3. Corporate governance
Corporate governance is founded on the Corporations Act 2001 or similar acts, which establish the governing body’s corporate governance roles and responsibilities. In a nutshell, corporate governance provides the encompassing framework for Standard 8 and in turn Standard 8 encompasses the other aged care quality standards.
4. Organisational governance
This is founded on the Aged Care Act 1997 and associated Principles, which together require an organisation’s governing body and leaders to ensure consumers receive safe and quality care and services.
Conversely, Standard 8 Organisational Governance supports corporate governance and a number of the other standards and their respective consumer outcomes, organisational statements and requirements.
5. Organisational and corporate governance
Corporate governance – the corporate domain – incorporates organisational governance – the organisational domain – creating alignment between these two forms of governance. It is important to recognise that the roles and responsibilities of organisational governance are not in conflict with those of a governing body’s corporate governance roles and responsibilities.
6. A governance system
A contemporary governance system should provide three fundamental components:
- governance standards or principles that create a governance framework within which leaders can operate
- governance policies and procedures that enable each standard or principle to be enacted and practised by leaders, and which are designed to assist a board fulfil its governance roles and responsibilities
- governance tools and documents that support the work of the board, chief executive officer, executives and managers.
7. Organisational systems
This is focused on how the various governance systems, more typically known as organisational systems, support the delivery of safe and quality care and services, and in so doing provide timely and accurate data and information that can be reviewed and monitored by the governing body. For example, the clinical governance framework and processes, risk management system.
8. Legal risk and insurance implications
It is paramount that your board and CEO seek independent, expert legal and insurance opinion and advice from legal and insurance practitioners who have extensive knowledge and experience of ‘aged care organisations and Commonwealth Government aged care reforms and therein their implications.
In part two of this article, I outline eight key messages for aged care governing bodies regarding this standard
Michael Goldsworthy is principal consultant at Australian Strategic Services.
- Read part two: More tips on complying with governance requirements
The full version of this article appears in the current edition of Australian Ageing Agenda magazine (July-August 2019)
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