Assignment 3: Corporate Governance and Ethical Responsibility Research Paper.

Dr. DoRight has recently been hired as the President of the “Universal Human Care Hospital”, where he oversees all departments with over 5,000 employees and over 20,000 patients at the medical facility. He has been provided with a broad set of duties and oversight of numerous departments, including business development, customer services, human resources, legal, patient advocacy, to name a few. He has managers in each department that he supervises and who work with him to address the needs of the various internal and external stakeholders of the hospital.

Dr. DoRight discovers that some patients within the hospital have been dying as a result of a variety of illegal procedures by doctors and nurses, and negligent supervision and oversight on their part.

This was brought to his attention in a few meetings and he told his Regional Director Compliance Manager and Executive Committee in January 2009. He was told by them that the matter would be investigated and they would report any findings to him as soon as possible. After two (2) years, there have been no results from the investigation and some patients are still passing away due to the negligent activities. He also answers to a board of trustees and interfaces with numerous community organizations and corporations who have various reasons for doing business with the hospital. Dr. DoRight continues to win awards for his leadership of the hospital and meeting business goals. He was recently named “Medical Business Executive of the Year” in 2011.

Write a six to seven (6-7) page paper in which you: 1. Determine at least three (3) different internal and external stakeholders that Dr. DoRight might have to deal with on a daily basis at the hospital. Discuss the duty of loyalty owed to each internal and external stakeholder.

2. Compare and contrast potential conflicts of interest that may exist between duties of loyalty owed to an internal stakeholder vs. an external stakeholder.

3. Determine whether Dr. DoRight has fulfilled his ethical duty by reporting the illegal procedures. Recommend additional steps Dr. DoRight should have taken to prevent further harm to current and future patients and reduce liability for his employer, the Universal Human Care Hospital.

4. Describe the deontology principle (p17-20) and apply it to the ethical dilemma that Dr. DoRight faces in this case.

5. Describe the utilitarianism principle (p14-17)and apply it to the ethical dilemma Dr. Do Right faces in this case.

Your assignment must follow these formatting requirements: * Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions. * Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.

The specific course learning outcomes associated with this assignment are: * Analyze employee rights to health and safety in the workplace. * Use technology and information resources to research issues in law, ethics, and corporate governance. * Write clearly and concisely about law, ethics, and corporate governance using proper writing mechanics.

1. Determine at least three (3) different internal and external stakeholders that Dr. DoRight might have to deal with on a daily basis at the hospital. Discuss the duty of loyalty owed to each internal and external stakeholder. Internal stakeholders

Managers- the department managers, as agents of their employer, are held to a higher duty of loyalty standard than regular employees. The duty of loyalty specifically prohibits corporate officers from (1) actively exploiting their positions within the corporation for their own personal benefit or (2) hindering the ability of a corporation to continue the business for which it was developed.

Employees - the duty of loyalty requires that an employee act solely for the benefit of the employer in all matters connected with his or her employment. In general, the duty of loyalty prohibits non-officer employees from: 1) competing with the employer while still in the employ of that employer; 2) taking employer’s customer list or soliciting customers away from employer while still in the employ of that employer; and 3) appropriating the employer’s personal property. Trustees - The duty of loyalty is the requirement that trustees act in good faith in all matters relating to the administration of the trust.

A trustee needs to avoid conflicts of interest and cannot favor any beneficiary over another unless so provided in the instrument. His or her primary duty is not to allow own interest as an individual even the opportunity of conflict with his interest as trustee. Trustees who take actions that are explicitly authorized by the terms of the trust do not breach their duty of loyalty. Actions made by the trustee that appear to be in violation of the duty of loyalty must be supported by powers or instructions that are clearly stated in the trust instrument.

External stakeholders Patients – Patients, as the clients of hospitals, have a right and duty to give feedback to management department, whatever they feel satisfied to service or not. The satisfaction of patient is obviously due to the service of doctors and nurses, whose behaviors a typical expression of hospital’s image. The feedback from patients or patients’ families is the most direct way to improve performance of hospital through reducing illegal procedures, negligent supervision and oversight of doctors and nurses. It is not only favorable to operation of hospital, but also beneficial to the patients. Suppliers- Suppliers should be considered cooperators in a business, especially if they provide special service. As a medical supplier, the duty of loyalty includes:

1. To ensure safety and performance of medical devices are maintained throughout total life cycle of the device. 2. To ensure medical devices are used in accordance to the intended use in accordance with the specifications. 3. To ensure continued safety and performance of medical devices from the point of installation through to disposal. 4. To ensure the device is decommissioned and disposed accordingly. Corporation partners - Corporation partners share the objective of having business succeed in a manner that strengthens both the economy and civil society. They can provide feedback on values and political, economic, and social considerations that an enterprise should integrate into its ethical identity.

2. Compare and contrast potential conflicts of interest that may exist between duties of loyalty owed to an internal stakeholder vs. an external stakeholder. The interests of external stakeholders. The external stakeholders are the people who plan, organize, control the daily running of the business. Their benefits (bonuses and perks), growth, the long-term health of a company, please shareholders, and profits. The interest of internal stakeholders

Employees improve the pay, working conditions, job security, training and career opportunities.

As a leader in business, it is important to decide on how to best deal with conflicting stakeholder’s needs. The three major issues need to be considered are: 1 A partnerships will have different aims as opposed to a charity. 2 The aims and objectives of the business. 3 The source and degree of power of each stakeholder. Further, for corporate officers, the duty of loyalty imposes affirmative obligations upon them to disclose information which falls within the scope of the fiduciary relationship and to refrain from profiting, without permission from the one who is owed the fiduciary duty, from property or information which is considered as belonging to the beneficiary.

This duty does not prohibit an employee from planning, forming, and outfitting a competing corporation while still working for the employer, or even informing a client of the employee’s intention to leave the employer, so long as the employee does not engage in competition with the employer. Once an employee leaves his position with an employer, he ceases to owe that employer a fiduciary duty.

Further, where there is no fraud, no contractual restrictive covenant, and there has been no improper taking of a customer list, former employees may, without fear of breaching the duty of loyalty, compete with their former employers and solicit former customers provided there is no evidence of this kind of business activity prior to the employee’s termination of his employment.

Trustees may not profit from the trust relationship other than through their compensation. Jackson v. United States Trust Co., 361 Mass. 333 (1972). Thus, a trustee cannot transact business with the trust that benefits the trustee either directly or indirectly. As a general rule, trustees cannot purchase property from the trust, sell their own property to the trust, or purchase property for themselves that ought to be purchased for the trust. Further, trustees generally cannot engage in a business that competes with the trust. In short, trustees cannot put themselves in a position in which their interests conflict with those of the trust.