The Royal Commission into Aged Care Quality and Safety was established on 8 October 2018 by the Australian government in order to investigate and report on aged care neglect in Australia.

The Honourable Tony Pagone QC and Ms Lynelle Briggs AO, who were appointed as Royal Commissioners under the terms of reference, delivered an interim report on 31 October 2019 and are required to provide a final report by 12 November 2020.

Governance is expected to be a focus of the final report, which will also deal with accountability in the sector and set a framework for a fundamental overhaul of the design, objectives, regulation and funding of aged care in Australia. As a result, the commission has turned its focus to governance in aged care, the links between governance and outcomes and how the commission may look to improve governance in the sector.

More than 8,500 aged care submissions have been received and an Aged Care Royal Commission extension granted for public submissions to 30 June 2020, after hearings and workshops were suspended due to COVID-19.

The inquiry is authorised to look at the quality of aged care services provided to Australians, and the extent of substandard care. This includes:

  • mistreatment and all forms of abuse;
  • the causes of any systemic failures;
  • actions that should be taken;
  • how best to deliver aged care services, including to people with disabilities residing in aged care facilities, including younger people and those with dementia;
  • future challenges for service delivery;
  • how best to deliver aged care services in a sustainable way, including through innovative models of care, increased use of technology, investment in the aged care workforce and capital infrastructure; and
  • what the Australian Government, aged care industry, families and the community can do to strengthen the system.

Aged Care Royal Commission Interim Report

The interim report of the Royal Commission into Aged Care Quality and Safety, Neglect, released on 31 October 2019, said the system designed to care for older Australians is woefully inadequate.

The inquiry investigated aged care housing, in-home care and care for young people with disabilities living in a residential aged-care environment. The aged care interim report findings identified three areas for immediate attention, including more home-care packages to aid those on waiting lists, a reduction in the ‘over-reliance’ on chemical restraints, and a reduction in the intake of young people with disabilities into aged-care homes.

The commission hearings are a timely reminder for directors in the aged care sector – and in other sectors that care for vulnerable people – to test whether legal, risk and compliance systems are being implemented in practice. Boards also need to ask questions regarding information flows and whether they are being advised of the practical consequences of key decisions.

As with the Financial Services Royal Commission, this inquiry has also highlighted the importance of culture and the board’s role in overseeing this important part of governance. The AICD has released a practical tool to help shape the approach to governing organisational culture.

We provide regular Royal Commission updates on the important issues for directors. Read more on the Interim Report and the AICD view of the effect on NFP governance.

Aged Care Sector Director Tool

In order to guide care for vulnerable people in this sector, the AICD has developed an Aged Care Sector Director Tool, designed to assist directors to consider their duties to protect vulnerable people under their organisational care and appropriately discharge their director responsibilities. It aims to stimulate thinking and discussion for boards to consider their own governance framework, including areas of core responsibility.

It is against this backdrop of due diligence that directors and boards of aged care organisations need to assess their policies and practices – to ensure that governance frameworks achieve regulatory compliance with Aged Care Quality Standards and to establish a robust organisational culture of diligent and authentic service quality and safety.

Quality and safe care a core responsibility

Each board has ultimate accountability for the level of quality and safe care provided to its clients. These areas are core business and need to be a key focus of the board. What structures, processes and systems should the board make sure are in place and what questions should a director ask to make sure they gain adequate ‘line of sight’ on quality and safety of the services provided?

The board should satisfy itself that its governance framework is appropriate to ensure proper oversight of the organisation, recognising that its consumers may have vulnerabilities particular to their age, health, abilities and isolation.

The board’s role in clinical governance

Clinical governance (for those providing clinical services) is an integral part of the governance framework and should be viewed in context with the rest of the framework. Clinical governance is an integrated set of leadership behaviours, policies, procedures, responsibilities, relationships, planning, monitoring and improvement mechanisms that are implemented to support safe, quality clinical care and good clinical outcomes for each aged care consumer.

AICD Not-for-Profit Governance Principles

In the context of the Aged Care Royal Commission, and reports highlighting governance concerns within community and NFP organisations, the AICD released in 2019 the second edition of its Not-for-Profit Governance Principles.

The principles are a practical framework to help NFPs – both big and small - understand and achieve good governance. This revised edition reflects the changes in the sector since they were first released in 2013, including the heightened expectations of good NFP governance.

The principles consist of three components: 10 individual principles, accompanied by supporting practices and guidance. Aimed primarily for directors and executives, they can also be valuable to others involved in the governance of NFPs, such as managers, staff and volunteers.

The revised principles provide a framework for NFPs and charities to consider good governance practices, including the board’s roles and responsibilities, managing conflicts of interest, organisational culture, stakeholder engagement and risk management. New supporting practices provide greater clarity for NFP directors on what good governance looks like, to help support and strengthen governance practice in the sector.

The principles are complementary to the ACNC Governance Standards and are intended to be voluntary in application.

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