Governance and Ethics Corporate Governance & Ethics Research Paper

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Governance and Ethics

Corporate Governance & Ethics

Dr. DoRight is the highly respected executive at Universal Human Care Hospital. He and Universal both stand to lose a great deal if it leaks out that patients have been dying due to lack of internal controls and simple negligence. Not only have patients been dying, but it has been going on for at least two years and while Dr. DoRight has been fully aware that problems exist. The implications are far-reaching and substantial.


A corporate stakeholder is anyone who can affect, or is affected by, the performance and health of a business (Fiedler & Kirchgeorg, 2007). There is a litany of internal and external stakeholders that stand to be impacted greatly depending on how this negligence matter turns out. One group of stakeholders is the employee base at the hospital. While some of them are actively contributing to the problem at hand, most of them show up and do their job well and could stand to lose their job if it becomes known that the hospital's actions or inactions are causing patients to die. Universal has a duty to the employees to keep the hospital up and running and in a correct manner so that employees can keep their jobs.

Other internal stakeholders are the owner(s) of the hospital. The ownership structure of the hospital is not explicitly defined but it stands to reason that many of the owners of the hospitals are either employees or board members of the hospital or they are one or more people that run the company. Whichever it is, there is likely to be at least some overlap between the owners and the regular employees as it relates to ownership of the company. Owners are owed loyalty because they own and operate the hospital and they have hired people to ensure that nothing improper is occurring. The third internal stakeholder worthy of mention is the Executive Committee. This committee could be comprised of owners and/or employees, as named above, but they hold a special place within the company that puts them in a classification all their own. If deficient conditions exist at the hospital for a protracted amount of time, the committee, in addition to Dr. DoRight, would be held mostly responsible. The other people in the hospital besides the board owe it to the board to be thorough and diligent as it relates to doing their job or it puts the board in a bad situation.

Examples of external stakeholders would include the patients who are treated at the hospital. Obviously, the patients want to be treated safely and effectively so they can go home and return to their normal lives. Suppliers and vendors that rely on the hospital for a portion of their business would also be an external stakeholder. The final external stake holder to mention for this assignment would be the government. The government has a vested interest in the Universal running as it should and the government will likely come down hard on Universal for faulty controls and practices. If the government does not do this, the public will demand it and elected officials might pay for their inactions at the polls. This is especially true since lives are being lost due to the problems Universal is having. The government has a loyalty to the electorate to keep people safe.

Internal vs. External Stakeholders

There are situations when a hard choice must be made and either the internal or external stakeholders, if not both, will be greatly affected by the outcome. The situation with Universal is certainly one of those instances. If Dr. DoRight pushes this matter to hard, the hospital can be gravely affected by the fallout and this will impact all internal stakeholders greatly. If he does not push hard enough, patients will continue to die and the fallout will probably be worse when the public or the government finds out what is going on.

Deontology and Utilitarianism

Deontology-based ethics follows the basic principle of doing the right thing. This ethical structure dictates that doing the right thing is a requirement and whether something is right has nothing to do with whether the ensuing consequences are good or not (Ronzoni, 2010). Certainly, the potential consequences of Dr. DoRight pushing for more action is the right thing to do but the potential consequence of doing the right thing could have devastating consequences. Even if the public never finds out that people are dying only because of errors, the very fact that the errors are occurring is flat wrong according to deontology ethics.

Utilitarianism would demand a similar outcome but for a different reason. Utilitarianism dictates that resources must be allocated in a way that does the most good (Audi, 2007). Obviously, if patients are dying because of errors and not because of a terminal illness or for some other malady that would cause death for that person anyway, then resources should be allocated to prevent such an occurrence or to mitigate as much as is possible. If a patient is going to die anyway in short order, that might change the argument. However, this is a clear-cut case of the hospital's negligence causing death. As it relates to Universal, Dr. DoRight and the Executive Committee most move heaven and earth to make sure people and materials are shifted to where they need to be.

Course of Action

Dr. DoRight has certainly done something about the matter thus far but he needs to push harder or this whole situation will become unmanageable. He must demand swift and immediate action to curtail preventable patient deaths. Any and all parties within the hospital, no matter how high up the ladder they are, that are responsible for this situation not being solved already need to be removed from their positions. The amount of money the hospital could lose to wrongful death lawsuits could be in the millions, if not billions. If the Executive Committee continues to dawdle and/or otherwise not do its duty, Dr. DoRight must step down from the hospital and report what he knows to the relevant authorities. The hospital cannot bar him from doing so because it would be illegal not to report such malfeasance.

From a people perspective, any employee, owner or Executive Committee member that is unwilling or unable to do the right thing to protect patient security and health must be demoted or fired depending on the severity of what they have done or have failed to do. The assignment states clearly that oversight has been lax and that nurses and doctors have been engaging in illegal behavior. If such behavior is borne of ignorance or lack of training, there is a chance that this can be corrected through vigorous training. However, if the nurse, doctor or manager knows better and still engaged in the behaviors leading to the deaths, or even in situations that could have done so, those people need to be discharged immediately or otherwise removed from situations where they can recidivate.

From a liability perspective, Universal could cease to be if the deficient people and conditions are not corrected immediately. Legal liability insurance can mitigate a lot of damages but if the premiums for such insurance become cost-prohibitive or, even worse, carriers refuse to even cover them, it would leave Universal in a very precarious position. This is amplified even more given that the upper echelons of management at the hospital have been aware of the problems for more than two years.

Oversight Infrastructure

Implementation of a rigid and exhaustive oversight system needs to be undertaken immediately. Any and all actions that can lead to patients becoming sick or dead if not done or not done correctly need to be analyzed and corrected as needed. This ranges from the janitors that clean the hospital floors to the actual doctors and nurses that provide the medical care. Policies needs to be constructed that defines what must be done and when and what will happen to people that do not comply. Once these policies are in place, anyone who does not adhere to them must be punished per the policy without exception unless an overarching reason exists to not do so, which should be exceedingly rare. An example would be if a new employee is trained wrong or is not trained at all in the proper methods, which should never happen.

Management and compliance personnel would face the heaviest burden. These are the people that define the policies and are ultimately responsible for enforcing them. Having to regulate people so aggressively and having to punish or fire them is not a pleasant task, but when human lives are on the line, it must be done. The people in these positions must sign on to the policies without exception and if they are unable to unwilling to execute their duties, they need to be demoted or fired and replaced with someone that will. The hospital will probably have to pay above average salaries to attract the…

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