Citation, commencement and interpretation

1. —(1) This Order may be cited as the NHS Foundation Trusts (Trust Funds: Appointment of Trustees) Amendment Order 2011 and shall come into force on 1st January 2012.

(2) In this Order, the “Appointment Order” means the NHS Foundation Trusts (Trust Funds: Appointment of Trustees) Order 2007( 2 ).

Substitution of article 1(2) of the Appointment Order

2. In article 1 of the Appointment Order (citatin, commencement and interpretation), for article 1(2) substitute—

“ (2) In this Order-

“the Commission” means the Appointments Commission ( 3 ) ;

“company” means a company as defined in section 1(1) of the Companies Act 2006 ( 4 ) ;

“executive director” means a director who is an employee of the company;

“foundation trust” means an NHS foundation trust specified in either of the Schedules to this Order;

“non-executive director” means a director who is not an employee of the company. ” .

Amendment of article 2 of the Appointment Order

3. In article 2 of the Appointment Order (appointment of trustees) after paragraph (2) insert—

“ (3) In respect of the foundation trust specified in column 1 of Schedule 2, the Commission must appoint as trustee for the foundation trust the company which is listed adjacent to it in column 2 of that Schedule. ” .

Substitution of article 3 of the Appointment Order

4. For article 3 of the Appointment Order (termination and suspension of appointment) substitute—

“ 3. —(1) The Commission may terminate a trustee’s tenure of office where it is of the opinion that—

(a) it is not in the interests of the foundation trust or of the health service or of the administration of any of the trust funds that the trustee should continue to hold office; or

(b) in the case of a trustee that is a company, there has been a breach of any of the conditions in article 3A(2).

(2) Where the Commission is of the opinion referred to in paragraph (1), the Commission may suspend the trustee from office, pending a decision on whether to terminate the trustee’s tenure of office. ” .

Insertion of article 3A to the Appointment Order

5. After article 3 of the Appointment Order insert the following article—

“ Appointment of company subject to conditions

3A. —(1) The Commission must not appoint a company as a trustee for a foundation trust, other than in respect of the foundation trust listed in Schedule 2.

(2) Where the Commission appoints a company as a trustee any such appointment shall be subject to the following conditions, which must be included in the company’s constitution—

(a) the company must be incorporated as a company limited by guarantee, established for exclusively charitable purposes and registered with the Charity Commission under the Charities Act 1993 ( 5 ) ;

(b) the objects of the company must include holding property as set out in section 51(1) of the National Health Service Act 2006;

(c) the number of non-executive directors must exceed the number of executive directors;

(d) the non-executive directors of the company must be appointed by the Commission;

(e) when appointing executive directors, the company must have regard to the guidance entitled “Trustees for NHS Charities – Guidance on recruitment and selection” published by the Appointments Commission on 1st March 2010 ( 6 ) , as if that guidance applied to the appointment of executive directors;

(f) the company must have systems in place for the annual appraisal and performance management of its directors;

(g) the board of directors of the company must ratify any Commission request to terminate the tenure of office of a non-executive director on the grounds that the Commission considers it is not in the interests of the foundation trust or of the health service or of the administration of any trust funds that a non-executive director should continue to hold office; and

(h) where any of the existing directors of the foundation trust are appointed as a director of the company appointed as trustee for that foundation trust pursuant to this Order, their term of office shall be for a period not exceeding six months. ” .

Amendment of the Schedule to the Appointment Order

6. The Schedule to the Appointment Order (NHS Foundation Trusts for which Trustees are to be appointed) is renumbered Schedule 1.

Insertion of Schedule 2

7. After Schedule 1 as so renumbered by article 6 of this Order, insert the following Schedule—

Articles 2(3) and 3A

“ SCHEDULE 2 NHS Foundation Trust for which a company is to be appointed as trustee