Corporate Governance and Ethical Responsibility

Corporate Governance and Ethical Responsibility

Professionals constantly face ethical dilemmas in their day-to-day undertakings. This text highlights a scenario in which a newly hired President of a hospital, Dr. DoRight, faces a significant ethical dilemma. In so doing, the text more specifically determines the various stakeholders Dr. DoRight might find himself dealing with at the facility and the duty of royalty owed to each stakeholder. Amongst other things, the text also analyzes Dr. DoRight’s actions in a bid to determine whether he has fulfilled his ethical duty. Further, both the deontology and utilitarianism principles are applied to the ethical dilemma the doctor faces in this particular scenario.

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Discussion

‘Stakeholder’ as a term does not have an assigned definition. This means that various definitions of the same have been floated over time. Originally, stakeholders were considered to comprise of “those groups without whose support the organization would cease to exist” (Freeman, 2010). However, the term has over time assumed a more dynamic definition. One of the more practical definitions of the term ‘stakeholder’ in an organizational context was offered by Freeman who according to Lozano (2002) defined the same as “any group or individual who can affect or is affected by the achievement of the organization’s objectives.” In our case, Dr. DoRight might have to deal with a number of stakeholders as he pursues his responsibilities at the Universal Human Care Hospital. Basically, stakeholders can either be external or internal. In our case, the internal stakeholders Dr. DoRight might find himself dealing with include but they are not limited to employees, the Board of Trustees and the Executive Committee. On the other hand, external stakeholders in this case include community organizations and corporations doing business with Universal Human Care Hospital for various reasons, patients and various regulatory bodies/agencies. For each of the stakeholder group identified above, there is a duty of loyalty owed. As Ferrell, Fraedrich and Ferrell (2008) point out, “the duty of loyalty means that all decisions should be in the interests of the corporation and its stakeholders.” Hence Dr. DoRight is in this case required to place the interests of each and every stakeholder above those of his own.

In regard to the internal stakeholders, Dr. DoRight first and foremost owes the Board of Trustees a duty to the efficient and competent management of the facility. Further, he owes the board a duty to keep some aspects of the hospital operations confidential. In this case, he is expected to ensure that the facility is run in accordance with the best practices of the profession. Dr. DoRight owes employees in the facility a duty to fair treatment and consideration. The doctor can also be said to owe the Executive Committee the duty of keeping their deliberations confidential. When it comes to the external stakeholders, Dr. DoRight’s duty of loyalty to the facility’s patients requires him to put their interests above those of his own by ensuring that their medical needs are attended to professionally. In so doing, Dr. DoRight may find it prudent to ensure that instances of illegal procedures as well as negligent supervision are dealt with firmly. Dr. DoRight’s duty of loyalty also extends to community organizations and corporations doing business with Universal Human Care Hospital for various reasons. In this case, his duty of royalty has got to do with openness, fairness, disclosure of any relevant information, and avoidance of misrepresentation of any sort. Lastly, Dr. DoRight owes regulatory bodies and agencies a duty to adhere to the best practices of both managerial and medical practice.

Taking into consideration the duties of loyalty owed to external stakeholders and those owed to internal stakeholders, it can be noted that potential conflicts of interests do exist. This can partially be attributed to the fact that both kinds of stakeholders possess differing priorities as well as interests. However, in some other instances, the conflict of interest may emanate from an attempt to manage a group of stakeholders while taking into consideration the various duties owed to them. While the potential conflict of interest could be similar in some cases, it could end up differing in others. For instance, it is important to note that Dr. DoRight generally owes both categories of stakeholders a duty to ensure that their interests precede those of his own. However, in seeking to fulfill his end of the bargain as far as the duty of loyalty to external stakeholders is concerned, Dr. DoRight could find himself neglecting his duty of loyalty to internal stakeholders. For instance, his duty of confidentiality to internal stakeholders stands to be violated should he pursue all available channels including the disclosure of the prevailing practices to regulatory authorities in his quest to see to it that the medical needs of patients are attended to professionally.

By reporting the erratic procedures in this case, Dr. DoRight fulfilled his ethical duty. This was the right thing to do taking into consideration the prevailing circumstances. Further, as the president of the facility, Dr. DoRight has a duty to ensure that patients access the best treatment options especially given that he oversees all the departments at the Universal Human Care Hospital. However, although the doctor fulfilled his duty from an ethical point-of-view, there are a number of additional steps he could have taken to stall further harm to not only current but also future patients as well as reduce the liability for the facility. To begin with, Dr. DoRight should have made follow-ups on the progress of investigations regarding the alleged illegal procedures causing the deaths of patients. It can be noted that it is likely the investigations in this case never actually took off given that no findings of the same have been presented two years down the line. The other option which Dr. DoRight should have explored was setting up an interdepartmental committee to investigate the claims of illegal procedures and cases of negligent supervision. This is more so the case given that as the president of the facility, he oversees all the departments. The committee formed in this case should have been given a definite deadline of completing the investigations and making recommendations on the way forward. This in my opinion could have been the best option to realize tangible results. Lastly, yet another valid course of action that was at Dr. DoRight’s disposal regarded taking up the issue directly with a higher authority. The higher authority in this case is the board of trustees. Perhaps this would have fast tracked the pace of investigations so as to enhance the timely presentation of findings for corrective measures to be instituted.

According to Loewy and Loewy (2004), the ‘wrongness’ or ‘rightness’ of a given undertaking can be looked at in terms of the act’s intentions or consequences. Deontological ethics according to Mizzoni (2009) has its focus on duty. Hence in this case, an individual who chooses to fulfill his or her obligation or perform that of which is expected of him or her i.e. his or her duty, can be said to be acting in accordance to the framework of deontological ethics. Such an individual has his focus on the intention of an act. Just like is the case with natural law, Mizzoni (2009) notes that when it comes to deontological ethics “the end does not justify the means.” For instance, if what it could take to save the entire world was the death of a single innocent person, deontological ethics would not support such an undertaking as it is not the right thing to do. Killing an innocent person is against the law and hence such a course of action would largely be avoided. Deontological ethics can be applied to Dr. DoRight’s ethical dilemma. In this case, Dr. DoRight is faced with a dilemma on whether to act in the best interests of the patients who happen to be the facility’s external stakeholders or do nothing so as to avoid placing the facility’s internal stakeholders (i.e. The Regional Director and the Executive Committee) in a compromising position as a result of their failure to act. From a deontological point-of-view, Dr. DoRight should have adhered to his duties and obligations. This would have called for a review of his obligation to patients as well as to the hospital. In my opinion, Dr. DoRight has an obligation to ensure that no more deaths occur as a result of both negligent supervision and illegal procedures. However, it is also important to note that Dr. DoRight also has an obligation to the hospital itself and by extension the top governing organs of the facility (i.e. those he reports to). In the final analysis, the right course of action for Dr. DoRight should have been consistent with his contractual duties and responsibilities i.e. that which he was hired to do by the facility.

On the other hand, the utilitarianism principle can also be applied to this scenario. According to Bredeson (2011), “…utilitarian thinkers agree that one acts ethically if one’s decisions tend to benefit the greatest possible number of people or harm the fewest possible number.” Thus this principle is founded on an individual’s ability to predict a given action’s consequences. On predicting such consequences, an individual is supposed to choose the course of action which would in the end benefit the greatest number of people. In such a case, the choice selected would be considered ethically correct. For instance, if one innocent person has to be killed so as to save the entire human race, then it would be ethically right to kill such a person from a utilitarian point-of-view. An application of this principle in our scenario seems somewhat straightforward. To determine the right course of action in this case, the question to be asked is; of all the alternative courses of action at Dr. DoRight’s disposal, which course of action would benefit the greatest number of people? In my opinion, seeking to ensure that the situation is brought under control no matter what it takes would benefit a significant majority of the parties in this scenario i.e. both current and existing patients as well as their families. However, some of his actions in this case could clearly fall outside his mandate. Further, aggressively pursuing the case could put Dr. DoRight on a collision course with those he had earlier talked to including the Executive Committee and the Regional Director. However, in accordance with utilitarianism principles, neither hospital regulations nor the constraints of his duties and responsibilities should stand in Dr. DoRight’s way as he seeks to pursue that course of action which would benefit the greatest number of people who in this case happen to be the facility’s patients (both current and future) as well as their families.

Conclusion

In conclusion, it is important to note that ethical dilemmas are largely unavoidable in our everyday lives. This is more so the case in professional practice. To effectively address these ethical dilemmas, professionals should ideally have a well-founded knowledge of ethical principles and theories.

References

Bredeson, D. (2011). Applied Business Ethics: A Skills-Based Approach. Mason, OH: Cengage Learning.

Ferrell, O.C., Fraedrich, J. & Ferrell, L. (2008). Business Ethics: Ethical Decision Making and Cases (7th ed.). Boston, MA: Cengage Learning.

Freeman, R.E. (2010). Strategic Management: A Stakeholder Approach. Cambridge: Cambridge University Press.

Lozano, J.M. (2002). Ethics and Organizations: Understanding Business Ethics as a Learning Process. Dordrecht, Netherlands: Kluwer Academic Publishers.

Loewy, E.H. & Loewy, R.S. (2004). Textbook of Healthcare Ethics (2nd ed.). Dordrecht, Netherlands: Kluwer Academic Publishers.

Mizzoni, J. (2009). Ethics: The Basics. West Sussex: John Wiley & Sons.


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