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Governance and Remuneration:

Clinical Performance
and Sustainability
Committee Report

Dr Felicity Harvey

Chairperson of the Clinical Performance and Sustainability Committee

As Chairperson of the Clinical Performance and Sustainability Committee, it is my pleasure to report on its activities for the financial year ended 31 March 2019.

This report provides an overview of the key focus areas considered during the year together with the priorities for next financial year. The responsibilities and functions of the Clinical Performance and Sustainability Committee are governed by formal terms of reference available in the governance section of the Company’s website and summarised in the Corporate Governance Statement. These are approved by the Board and subject to regular review, at least annually.

COMMITTEE COMPOSITION AND MEETING ATTENDANCE

The composition of the Clinical Performance and Sustainability Committee and meeting attendance during the period under review are set out in Table 1.

Changes to the composition during the year are listed below:

  • Dr Ronnie van der Merwe succeeded Mr Danie Meintjes as the CEO on 1 June 2018 and as a member of the Clinical Performance and Sustainability Committee on 25 July 2018.
  • Mr Seamus Keating was appointed as a member of the Clinical Performance and Sustainability Committee with effect from 25 July 2018.

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

Table 1: Committee composition and meeting attendance

Notes
1 The composition of the Clinical Performance and Sustainability Committee is shown as at 31 March 2019.
2 The attendance reflects the number of scheduled meetings held during the financial year. One meeting was held between the Company’s financial year-end and the Last Practicable Date, which was attended by all members.
3 Dr Hertzog stood down as Chairperson of the Clinical Performance and Sustainability Committee on 1 April 2018 and was succeeded by Dr Harvey. Dr Hertzog was unable to attend one scheduled Committee meeting for unexpected personal reasons.
4 Dr Al Hashimi was unable to attend the first meeting following her appointment to the Committee due to a previous commitment which could not be changed.
5 Mr Keating was appointed as a member with effect from 25 July 2018.
6 Dr Van der Merwe was appointed as CEO of the Company on 1 June 2018 and a member of the Clinical Performance and Sustainability Committee with effect from 25 July 2018.

FIGURE 1: Committee MEMBERS’ SKILLS AND Experience

Figure 2: COMMITTEE COMPOSITION

KEY AREAS OF ACTIVITY

The Clinical Performance and Sustainability Committee has increased the frequency of its meetings from 4–5 meetings annually for the financial year commencing 1 April 2019, to facilitate discussions on the 3–5 year clinical strategy of the Group. In the year under review, the Clinical Performance and Sustainability Committee met four times and the main focus areas are set out below.

Clinical performance

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

Governance

The implementation of the Ward-to-Board accountability framework is designed to support and enhance the Patients First strategic objective by aligning the interests of patients and care providers and by 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 Group-wide alignment and collaboration. The framework has been successfully implemented in Mediclinic Southern Africa and Mediclinic Middle East and is in the process of being rolled out in Hirslanden. This includes establishing a Clinical Performance Committee for each division and replicating this appropriately at 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 accountability framework will drive improved 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 management model, which is based on a clinical performance framework 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 divisions, including their individual hospitals against internal and external benchmarks. This will enable the management team and the Clinical Performance and Sustainability Committee to analyse trends and prioritise the corresponding clinical performance improvements.

The Clinical Performance and Sustainability Committee continued its focus on:

  • monitoring the clinical performance of the Group;
  • evaluating patient safety, IPC 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 divisional level;
  • reviewing clinical effectiveness and cost efficiencies; and
  • reviewing and approving the annual Clinical services overview in the annual report and the Clinical Services Report.

Sustainable development

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

  • 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, the Group Environmental Policy and its Ethics Code, thereby strengthening the Group’s position on non-discrimination, and respect for patient rights and human rights. These are available on the Company’s website at www.mediclinic.com;
  • 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 Southern Africa, labour relations and working conditions, the Company’s Modern Slavery and Human Trafficking Statement as required in terms of the Modern Slavery Act 2015 (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 legislation) and corporate social investment;
  • considering and noting the paper by 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 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 recognises companies with strong environmental, social and governance practices;
  • confirming the key sustainability priorities, as recommended by management and reported in the Sustainable development overview and in the Sustainable Development Report; and
  • reviewing and approving the annual Sustainable development overview included in the Annual Report and the Sustainable Development Report.

As referred to below, certain South African subsidiaries of the Company are required to appoint a Social and Ethics Committee in terms of the South African Companies Act, No. 71 of 2008, as amended (“SA Companies Act”), unless such companies are subsidiaries of another company that has a Social and Ethics Committee, which performs the functions required by this regulation on its behalf. The Clinical Performance and Sustainability Committee therefore performs the statutory functions required of a social and ethics committee in terms of the SA Companies Act.

COMPLIANCE

The Clinical Performance and Sustainability Committee considered the compliance universe and the risk and control self-assessment process for the Group, as well as new legislation and regulations.

ASSURANCE

The Clinical Performance and Sustainability Committee considered the need for external assurance of the Company’s non-financial reporting, particularly in relation to the Company’s sustainable development performance. It 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 Clinical Performance and Sustainability Committee will continue to monitor whether additional forms of assurance are required in future.

COMMITTEE EVALUATION

The Clinical Performance and Sustainability Committee’s performance was internally evaluated by its members by way of a self-evaluation questionnaire, the results of which were considered by both the Clinical Performance and Sustainability Committee and the Board. Following feedback received from the self-evaluation, the Clinical Performance and Sustainability Committee agreed that meetings regarding substantial matters would be held in person, wherever possible. No other significant issues that required improvement were identified. The Clinical Performance and Sustainability Committee and the Board concluded that the committee operated effectively during the year and that its members are suitably skilled and experienced.

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 Clinical Performance and Sustainability Committee is performing the role and function of a Social and Ethics Committee in terms of the SA Companies Act, it will fulfil this function by referring shareholders at the Company’s AGM on 24 July 2019, to this report, which should be read in conjunction with the Sustainable Development Report. Any specific questions for the Clinical Performance and Sustainability Committee may be sent to the Company Secretary prior to the AGM.

PRIORITIES FOR THE COMMITTEE FOR THE 2020 FINANCIAL YEAR

For the coming financial year, the Clinical Performance and Sustainability Committee will, among other matters, focus on:

  • the continued implementation of the Ward-to-Board accountability framework across the divisions;
  • reviewing the clinical performance indicators and identifying trends;
  • the implementation of advanced technology for improved clinical information and performance; and
  • continued monitoring of the Company’s sustainable development.

Signed on behalf of the Clinical Performance and Sustainability Committee.

Dr Felicity Harvey

Chairperson of the Clinical Performance and Sustainability Committee

22 May 2019

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