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Implementing the regulation

What CQC expects to see when a provider implements the regulation

The provider is responsible for the appointment, management and dismissal of its directors. The provider must be able to show evidence that appropriate systems and processes are in place to ensure that all new and existing directors are, and continue to be, fit and that no appointments meet any of the unfitness criteria set out in Schedule 4 of the regulations. The provider should be able to demonstrate that appointments of existing directors (and new directors) have been secured through robust and thorough appointments processes.

CQC recognises that a provider may not have had access to all relevant information about a director, or that a director may supply, or may have supplied, false or misleading information. In these situations, CQC will look to see that the provider has since made every reasonable effort to assure itself about an individual by all means available, and that it has addressed the issue in the light of new and additional information. This will include an assurance that the review process ensures that the provider meets Regulation 5.

There is already a range of good guidance documents for providers. These cover values-based recruitment, appraisal, development and disciplinary actions, including dismissal for chief executives, chairs and directors. We expect all providers to be aware of the various guidelines and to have implemented procedures in line with this best practice.

Determining misconduct and mismanagement

CQC does not determine what is and what is not misconduct or mismanagement. But, when we consider whether Regulation 5 has been breached, we will make a judgement about the provider’s decision; for example, whether or not the provider acted reasonably when it made its determination.

Regulation 5(3)(d) states:

The individual has not been responsible for, been privy to, contributed to or facilitated any serious misconduct or mismanagement (whether unlawful or not) in the course of carrying on a regulated activity or providing a service elsewhere which, if provided in England, would be a regulated activity.

Regulation 5: Fit and proper persons: directors

It is the responsibility of the provider to ensure that the requirement is met. Our new guidance about the meaning of misconduct and mismanagement is intended to help providers to interpret and implement the regulation (please see the Serious mismanagement or misconduct section).

In determining what amounts to "serious mismanagement or misconduct" beyond the decision by a court or professional regulators regarding individuals, we recognise that context is paramount. Directors may personally be accused and found guilty by a court of serious misconduct in respect of a range of already proscribed behaviours set out in legislation, such as being placed on the children’s or adults’ barred list, being undischarged bankrupts or convicted by a court for offences under the Sexual Offences Act 2003. A professional regulator may remove an individual from a register for breaches of codes of conduct.

Providers need to consider the mismanagement and misconduct behaviours in relation to the services they provide, the role of the employee and the possible adverse impact on the provider or confidence in its ability to carry out its mandate and fulfil its duties in the public interest.

In relation to being "privy to", the provider must be assured, through its recruitment and ongoing performance management processes, that directors have not been complicit with serious misconduct or mismanagement. They should be able to demonstrate this through appropriate records and information that they hold about the individual.

We will not use the fact that a provider is in special measures as evidence or an indication that a director is unfit. However, if necessary because of special measures, we would assess the effectiveness and robustness of its processes for appointing its directors.

Notifying CQC of a change of director

Adult social care, primary medical and dental care, and independent healthcare services

We require providers to notify us when there is a change of director membership or where there is a merger or acquisition. CQC’s notification system will require the chair (or equivalent in a non-NHS organisation) to declare that the provider has made appropriate checks to help reach a judgement that all directors are deemed to be fit and that none meet any of the unfit criteria.

Chair means the person who is the chair of the board or equivalent of the organisation or, where there is only one director or equivalent, the person who makes decisions on behalf of the organisation, such as a sole director or equivalent.

NHS bodies

We do not require NHS providers to notify us when there is a change of director. However, this will be kept under review as the Department of Health and Social Care may amend the legislation to make this a requirement.

We are currently looking at the level at which we register providers, so the information above may be reviewed. However, we will consult with all providers before we make any changes.

How CQC works with other regulators

Where appropriate, CQC will work alongside other regulators (such as the General Medical Council (GMC), Nursing and Midwifery Council (MNC), General Pharmaceutical Council and other relevant professional regulators) to ensure that the correct processes are adhered to and information is shared when relevant and appropriate.

For NHS bodies, this involves CQC working alongside other regulators, NHS Improvement and NHS England.

What information will CQC make available to providers?

There are many sources of information already in the public domain, which providers can use as part of their FPPR due diligence process. CQC can display some core information on our website if we determine it to be a FPPR concern. This information may include:

Public inquiry reports about the provider.

  • Any provider whose registration had been suspended or cancelled due to failings in care in the last five years, or longer if the information is available because of previous registration with CQC predecessor bodies.
  • Information where we are notified about any relevant individuals who have been disqualified by a professional regulatory body. We would share this information with the individual and the provider in line with our legal obligations under the Data Protection Act 1998.
  • Serious case reviews that are relevant to the provider.
  • Homicide investigations involving mental health trusts.
  • Criminal prosecutions against providers.
  • Ombudsmens’ reports relating to providers.

We have considered, and decided against, highlighting information about providers that have had a registration refused. We believe this information would not be sufficiently useful in helping to determine the fitness of an individual in itself. This is because refusal of registration is not always concerned with the fitness of individuals.

Last updated:
29 June 2018


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