Governance and Remuneration: Clinical Performance and Sustainability Committee Report
Dr Felicity Harvey
Chair of the Clinical Performance
and Sustainability Committee

As the new Chair of the Clinical Performance and Sustainability Committee, it is my pleasure to report on the Committee’s activities for the year ended 31 March 2018.

The report provides an overview of the key areas of focus considered during the year together with the priorities for 2018/2019. The Committee is governed by formal terms of reference available in the governance section of the Company’s website and summarised in the Corporate Governance Statement.

COMMITTEE COMPOSITION AND MEETING ATTENDANCE

The composition of the Committee and attendance of meetings during the period under review are set out in Figure 1. The Committee members are suitably skilled and experienced.

A number of changes to the composition of the Committee have taken place during the year and after the year-end:

  • Dr Felicity Harvey was appointed as a member with effect from 3 October 2017 and assumed the role of Chair of the Committee on 1 April 2018. The appointment of Dr Harvey as a member enhanced the clinical and broader healthcare sector knowledge of the Committee;
  • Dr Muhadditha Al Hashimi was also appointed as an additional member with effect from 1 April 2018, further enriching the Committee’s breadth, depth and diversity of skills, knowledge and experience; and
  • Dr Ronnie van der Merwe (Chief Clinical Officer and CEO Designate) will succeed Mr Danie Meintjes as the Group CEO and a member of the Committee on 1 June 2018.

The Chief Clinical Officer and the Chief Corporate Services Officer (who is responsible for the Group’s sustainable development management), are invited on a permanent basis to attend and speak at all Committee meetings. As part of the Ward-to-Board clinical governance framework detailed below, each of the divisional Chief Clinical Officers will be invited to all meetings as well as the divisional Chief Executive Officers (as required). Other relevant members of management are invited to attend Committee meetings, as required.

The Company Secretary is secretary to the Committee and attends all meetings. The Company Secretary is available to assist the members of the Committee, as required, ensuring that timely and accurate information is distributed accordingly.

Figure 1: Committee composition and meeting attendance

Notes
1 The composition of the Committee is shown as at 31 March 2018.
2 The attendance reflects the number of scheduled meetings held during the year under review. Between the Company’s financial year-end and the Last Practicable Date, one Committee meeting was held, which was attended by all Committee members, except Dr Al Hashimi.
3 Dr Hertzog stood down as Chair of the Committee on 1 April 2018, when Dr Harvey assumed the role of Chair of the Committee.
4 Dr Harvey was appointed as a member of the Clinical Performance and Sustainability Committee with effect from 3 October 2017 and attended all subsequent meetings of the Committee.
5 Prof Dr Leu and Ms Mandela will resign from the Committee at the end of the Company’s annual general meeting on 25 July 2018.

Committee INDUSTRY SECTOR experience

COMMITTEE COMPOSITION

KEY AREAS OF ACTIVITY

The responsibilities and functions of the Committee are governed by formal terms of reference, approved by the Board, which are subject to regular review, at least annually. As part of the implementation of the Ward-to-Board clinical governance framework, changes were made to the terms of reference to align the Committee’s responsibilities more closely to the new framework.

The Committee increased the frequency of its meetings from three to four meetings a year, to enable more regular and comprehensive discussions on clinical performance matters across the Group. In the year under review it met four times, where the main focus was on the areas set out below.

CLINICAL PERFORMANCE

In relation to the Committee’s clinical performance functions, the Committee is responsible for promoting a culture of excellence in patient safety, quality of care and patient experience. During the year, the Committee focused, inter alia, on the following:

Governance

The implementation of a Ward-to-Board clinical governance framework is designed to support and enhance the Patients First strategic objective by aligning the interests of patients and care-providers and building a culture of performance reporting and accountability. This approach also ensures that the information flows up and down the organisation more effectively and facilitates cross-division alignment and collaboration. The framework has been successfully implemented in Mediclinic Southern Africa and is in the process of being rolled out in Mediclinic Middle East and Hirslanden. This includes establishing a Clinical Performance Committee for each division and replicating this appropriately at the hospital level. The divisional committees will also include local independent clinical expert members to provide a different perspective and avoid ‘group think’. The Ward-to-Board framework will drive better quality and more effective outcomes for patients, thereby creating satisfaction and value for the Company and its stakeholders.

Clinical performance management system

Another important area of focus has been the Group’s Clinical Performance Management System, which is based on a clinical performance model consisting of four components: patient safety, clinical effectiveness, clinical cost efficiency and value-based care. A composite performance indicator dashboard has been implemented to evaluate the performance of the operating divisions including their individual hospitals against internal and external benchmarks. This will enable to the management team and the Committee to analyse trends and prioritise the corresponding clinical performance improvements.

The Committee continued their focus on the following areas:

  • monitoring the clinical performance of the Group;
  • evaluating patient safety, infection prevention and control, and quality improvement performance;
  • evaluating compliance with the Company’s patient safety and quality clinical care standards, policies and procedures, and regulation and accreditation standards at the operating divisions;
  • reviewing clinical effectiveness and cost efficiencies; and
  • reviewing and approving the annual Clinical Services Overview and the Clinical Services Report.

SUSTAINABLE DEVELOPMENT

In relation to its sustainability functions, the Committee is responsible for ensuring that the Group remains a good and responsible corporate citizen. During the year, the Committee focused, inter alia, on the following:

  • reviewing and further aligning the Group’s policies to the Group’s commitment to governance and reporting of its sustainable development performance, including the Group Sustainable Development Policy, Group Environmental Policy and Code of Business Conduct and Ethics, strengthening the Group’s position on non-discrimination, respect for patient rights and human rights. These are available on the Company’s website;
  • monitoring the sustainable development performance of the Group with specific regard to stakeholder engagement (which includes the outcomes from the patient experience index and employee engagement index), health and public safety, broad-based black economic empowerment in South Africa, labour relations and working conditions, reviewing and recommending to the Board the Company’s statement on slavery and human trafficking in terms of the Modern Slavery Act (available on the Company’s website), training and skills development of employees, management of the Group’s environmental impacts, fraud and ethics, compliance (which includes the governance of advertising and compliance with consumer protection laws) and corporate social investment;
  • considering and noting the paper on the Business and Human Rights Resource Centre in respect of Modern Slavery Act statements published by the FTSE 100 and new initiatives being implemented to strengthen the Group’s procurement practices and risk management;
  • monitoring incidents of fraud and ethics, as well as compliance throughout the Group, although also a function of the Audit and Risk Committee;
  • monitoring the results of the Company’s participation in various sustainability indices and assessments, notably the Company’s inclusion in the FTSE4Good Index as well as the FTSE/JSE Responsible Investment Index, which indices recognises Companies with strong ESG (environmental, social and governance) practices;
  • confirming the key sustainability priorities, as recommended by management, reported in Sustainable Development Highlights and the Sustainable Development Report; and
  • reviewing and approving the annual Sustainable Development Highlights and the Sustainable Development Report.

As referred to in the Clinical Performance and Sustainability Committee Report, certain South African subsidiaries of the Company are required to appoint a social and ethics committee in terms of the SA Companies Act, unless such companies are subsidiaries of another company that has a social and ethics committee, and the social and ethics committee of that company will perform the functions required by this regulation on behalf of that subsidiary company. The Committee also performs the statutory functions required of a social and ethics committee in terms of the SA Companies Act.

COMPLIANCE

The Committee considered the compliance universe and the risk and control self-assessments for the Group and considered in detail new legislation and regulations coming into force. A key area of focus has been a review of relevant data protection law, including the European Union General Data Protection Regulation (“GDPR”). Although a focus of the Board directly, the Committee also monitored the progress made with the project to ensure compliance with data privacy legislation applicable to each of the operating divisions in view of the volume and sensitivity of patient data.

ASSURANCE

The Committee considered the need for external assurance of the Company’s non-financial reporting, particularly in relation to the Company’s sustainable development performance. The Committee is satisfied that the current level of combined assurance provides the necessary independent assurance over the quality and reliability of the information presented in relation to the Group’s clinical performance and sustainable development. The Committee will continue to monitor whether additional forms of assurance are required in future.

COMMITTEE EVALUATION

An external evaluation of the Committee’s performance was conducted by Lintstock during the year, which results were considered by the Committee and the Board. There were no significant issues identified that required improvement and the Committee and the Board concluded that the Committee operated effectively during the year.

ANNUAL GENERAL MEETING

In terms of the SA Companies Act, a social and ethics committee must, through one of its members, report to the shareholders at the company’s annual general meeting on the matters within its mandate. As the Committee is performing the role and function of a social and ethics committee in terms of the SA Companies Act, the Committee will fulfil this function by referring shareholders at the Company’s annual general meeting on 25 July 2018 to this report by the Committee, which should be read in conjunction with the Sustainable Development Report. Any specific questions to the Committee may be sent to the Company Secretary prior to the annual general meeting.

PRIORITIES FOR THE COMMITTEE IN 2018/2019

For the coming financial year, the Committee will, among other matters, focus on the following:

  • the implementation of the Ward-to-Board accountability framework across the operating divisions;
  • the review of the clinical performance indicators and the identification of trends; and
  • the continued monitoring of the Company’s sustainable development.

Signed on behalf of the Clinical Performance and Sustainability Committee.

Dr Felicity Harvey
Chairman of the Clinical Performance and Sustainability Committee

23 May 2018