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Clinical governance was introduced in 1997 as a comprehensive framework to improve the healthcare quality in the National Health Service. Since then, the proliferation of various definitions and models of clinical governance illustrates that different perceptions are emerging on clinical governance. However, none of these definitions captures the essence of clinical governance in terms of its organisation‐wide implications for continuous quality improvement. Although there is discrete mention of structure, process and outcomes in the literature on clinical governance, it is hard to find any clear explanation on how clinical governance influences organisational elements. This paper therefore analyses clinical governance in terms of the inputs, processes, structure and the outcomes of healthcare organisations. The fact that the introduction of any new governance framework will have much wider implications for the management of healthcare organisations is illustrated through a refined definition of clinical governance presented in this paper.