ACCA Strategic Professional · Strategic Business Leader · Public sector governance

A public hospital trust is criticised because its published performance scorecard shows only financial results to the finance ministry. The board wants measures meeting the needs of patients, staff, the ministry and the community. Which approach best fits this aim?

A balanced set of financial and non-financial measures tied to each stakeholder group's objectives fits best. Public bodies serve patients, staff, funders and the community, so one financial or satisfaction measure is inadequate, and a balanced scorecard-style approach covers economy, efficiency, effectiveness and quality.

AA balanced set of financial and non-financial measures linked to each stakeholder group's objectivesCorrect
BReplacing all measures with a single return on capital employed target
CReporting only inputs to demonstrate economy
DUsing only patient satisfaction surveys

Explanation

Public sector organisations have multiple stakeholders with differing objectives, so a balanced set of financial and non-financial measures is needed. Single-measure approaches ignore other stakeholders, and ROCE is unsuited to non-profit service delivery. Inputs alone do not show outputs or outcomes.

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