Paying attention to the business side of practice ownership

Effective governance depends on oversight, not assumptions, even in the most trusted practice teams

“I had no reason to suspect anything.” It is the sentence that comes up, in one form or another, almost every time a practice discovers that something has gone badly wrong on the business side of the operation.

It is usually said with genuine bewilderment, by decent, hard-working principals and partners who trusted the people around them and cannot quite believe what has unfolded.

And it is the sentence I want to challenge here. It is not because the people saying it are being dishonest, but because it is not, and has never been, a defence.

Recently, GPonline reported that a former finance manager at a UK GP practice had been jailed for three years and two months after defrauding their employer of more than £450,000. This is not the first case of its kind and it will not be the last. The same publication’s archive carries a string of similar stories: Six-figure sums, seven-figure sums in one case, all taken quietly over long periods from practices whose owners had no idea anything was wrong until the manager left, fell ill, or made a mistake that finally exposed the pattern.

Governance

The commentary on these cases tends to focus on the individual. That misses the more important question, and the one I want to put to GP principals, partners, and practice or clinic owners in Ireland: How did this go on for so long without anyone noticing?

In almost every case I have encountered in more than 25 years working in and with practices, the answer is the same. The owners trusted the manager. The manager was competent, long-serving, well-liked. Nobody had a reason to look. And crucially, nobody had a system that would have shown them anything even if they had looked.

Let me say something important before I go any further. I work with practice managers on a regular basis, and they are, without question, some of the most committed and capable people in general practice. This is not a piece about distrusting managers. It is a piece about the difference between trust and governance and why the two are not the same thing.

It is also important to add that managers are not always trained in their roles. Many learn on the job, carrying responsibilities they were never formally prepared for, and that in itself is part of the wider governance issue this piece is about.

GPs train for the best part of a decade to become excellent clinicians. Nothing in that training prepares them for the reality of the day they become a principal, sign a partnership agreement, or open the doors of their own clinic. In doing so, they also become an employer, a business owner, a manager of people, and are accountable for everything that happens inside their practice, both from a clinical and non-clinical point of view.

The business side of practice ownership is almost entirely learned on the job, and usually learned reactively, when something has already gone wrong. Faced with a full clinical workload, it is entirely human to hand the operational running of the practice to a capable manager and be grateful that someone competent is holding it together.

But handing over the running of the practice is not the same as handing over accountability. Accountability does not transfer with delegation. It stays with the owner. “I always thought they were doing a good job” is not a defence. It is the evidence of the governance gap itself. The absence of a reason to suspect is not the same as the presence of oversight.

Trust is not a control

Trust is a relationship. In order to have adequate control, a structure is needed. You need both trust and control and you cannot substitute one for the other.

A trusted manager with sole, unsupervised access to the practice’s banking, payroll, supplier accounts, and reconciliations is not a sign of a high-trust culture. It is a governance vulnerability, and it is unfair on the manager as much as the owner. Good managers actively want oversight, because oversight protects them too.

Let me be clear about what I am not saying. I am not saying you should be looking over your manager’s shoulder or questioning every decision they make. That is not governance, that is micromanagement, and it is just as damaging in its own way. What I am saying is this: You should know what is happening in your practice.

You should be sitting down with your manager on a regular basis and going through the figures together. You should know who can move money and who is checking that it is being moved for the right reasons. And if you cannot remember the last time you had that conversation, that in itself is telling you something.

Three questions every practice owner should be able to answer

1. Who has the authority to move money out of the practice bank account and who checks that those movements are legitimate?
2. When did I last see a financial report for the practice – not the year-end accounts – and did I genuinely understand it?
3. If my practice manager were unavailable tomorrow, would anyone else know how to run payroll, pay suppliers, and reconcile the bank account?

If any of those questions made you uncomfortable, that discomfort is useful information. It is a reason to have a calm, constructive conversation about what proportionate oversight would look like in your practice.

The same governance gap that produces financial loss also produces employment disputes,  human resource problems, and reputational damage. The cost of it going wrong – financially, psychologically, and reputationally – is far greater than the cost of preventing it.

It is important that you trust your manager and that structures are built that let you keep trusting them with confidence. Do that work now, while everything is fine, so that you never find yourself sitting in front of someone saying the words “I had no reason to suspect anything”.

You should be sitting down with your manager on a regular basis and going through the figures together