Ensuring statutory compliance is an essential element of a hospital's organizational performance framework. Although “compliance with all details of legislative and regulatory frameworks is a management responsibility, a board must ensure it exercises oversight and understands the aspects posing the most risk to the hospital" (Guide to Good Governance, Fourth Edition, page 41). These functions include understanding constraints on the exercise of board authority, the responsibility for establishing performance management frameworks, and remaining knowledgeable to support, challenge, and ask questions of management proposals and information.
To exercise the above responsibilities, hospital boards should ensure there are systems in place to monitor legislative and regulatory compliance. These systems may include annual or semi-annual compliance reporting, workplan commentary in situations of non-compliance, live access dashboards, regular updates, or other systems as may be determined to be appropriate. Statutory compliance reports, whether prepared annually, semi-annually, or of another frequency, may also be monitored on a time-lapse basis to ensure previously identified areas of non-compliance have become compliant – ensuring overall system integrity. That said, “what constitutes sufficient due diligence will depend on the context of the board, the particular issue being considered, and director involvement." (Guide to Good Governance, Fourth Edition, page 90).
As hospital stakeholders and accountability partners remain focused on continuous improvement and active readiness, considering more frequent updates respecting legislative and regulatory compliance may not only support the board with organizational performance management, but also with balancing stakeholder interests and accountabilities.
While hospital board's are primarily responsible for exercising compliance oversight, and ensuring overall system integrity, increasing board involvement, or receipt of additionally detailed information, may be warranted in certain circumstances. These circumstances may include when statutory instruments are novel, external board compliance attestations are mandated, a broader erosion of board-management trust exists, or where director liability is expressly outlined. To assist hospital boards in identifying these areas, this Guide includes general commentary respecting director liability. In addition, the director liability provisions of each respective statutory instrument have been identified where present.
Although important, efficient and effective board operation requires more than simply strict legislative compliance. Good governance must leverage policy, processes and practice to build capacity to adapt to emerging issues. For further governance commentary see the Guide to Good Governance, Fourth Edition.
