Patricia Dunn Should Not Have

Patricia Dunn should not have been forced to resign. Her role as Chairman of the Board was to oversee the governance of the company, and assist with the selection of the CEO. Further to this, Dunn was to act as an agent of the shareholders, to protect their interests.

The interests of the shareholders, and by extension the interests of the board and the managers at the company, are generally to seek profit, in order that the investors receive a return on their investment that is roughly commensurate with the risk they are taking as owners of the company (Friedman, 1970). It is by that standard that Dunn's job performance should be judged. There are two key perspectives from which to analyze this situation -- deontological and utilitarian.

Deontological ethics derive their judgment of ethical behavior from the choices that are made, rather than from the state of affairs that those choices bring about (Alexander & Moore, 2007). The ethics of the situation are determined by the actor's adherence to the established categorical imperative. The case in question appears to most closely correlate with the agent-centered deontological ethics of Kant. In this view, the categorical imperative is roughly analogous to a moral code by which agents should act.

This code for Dunn would have been entirely based on the understanding of what does and does not constitute moral actions for a person in the position of Chairman of the Board. There are two elements that help to define moral behavior for a person in that position. The first is comprised of the laws of the land. Dunn's investigation skirted the laws of the land. Pretexting is an act on which the laws are ambiguous or ill-defined.

Legally, some behaviors of Dunn's investigators may have been illegal, but there is little evidence to prove this, nor is there evidence to prove that Dunn authorized the use of illegal activities when she launched the investigation. The other element to define moral behavior is not as clearly defined -- the code of ethics for Chairmans of the Board specifically. To consider this, Dunn's role as lead agent for the shareholders is of critical importance.

Dunn owes the shareholders the greatest duty of care -- more than the duty of care she owes the other directors. The behavior of the directors is one of Dunn's responsibilities. In this situation, Dunn was acting to modify the behavior of the board, in particular the one board member whose behavior was highly unethical and violated his duty of care to the shareholders. Thus, from a deontological perspective, there is little case to be made that Dunn violated any code of ethics.

The company received high scores for its corporate governance, and Dunn was able to eliminate the problem director. The investigation was not abnormal, given that highly-placed employees or directors by virtue of their position sacrifice certain privacy rights as a part of their role -- the other directors had no expectation of privacy and no expectation that Dunn would not investigate their behavior.

Indeed, knowing that there was a leak on the board, the other directors should have expected Dunn to take action, because that is what was in the best interests of the shareholders. The accusations of ethical malfeasance appear to stem mainly from hurt feelings and a lack of concern for the duty of care to the shareholders on the part of some of the other directors. The other major perspective from which to analyze this situation is the consequentialist perspective, in particular the utilitarian variant.

Utilitarianism is simplistically espoused in the principle of the greatest good for the greater number. The overall good is more important than the good of the primary actor (Dunn) or even the secondary actors (the board of directors) (Driver, 2009). Utilitarianism specifically includes the wider group of stakeholders, and given the nature of the Chairman's role, this must include the shareholders.

The shareholders, by virtue of being numerous and having the most at stake, are one of the most important groups to consider when evaluating the moral rightness of Dunn's actions from a utilitarian perspective. Employees, competitors and the board are other important stakeholders who must be taken into consideration as well. There are a number of outcomes that must be noted for this evaluation. To the shareholders, the outcome of Dunn's actions was overwhelmingly positive.

The company earned a high governance score, its stock price increased, and the risk posed by the leaks was mitigated. To Dunn, the actions were ultimately negative, but she performed her task to the best of her abilities, and this was valuable. To the board of directors, the outcome was somewhat negative, but neither Keyworth nor Perkins suffered much, both continuing to be incredibly wealthy people and neither having faced criminal prosecution or other infringement upon their freedoms. Their egos were the main victims of the investigation.

The company suffered somewhat in the short run, in particular for the negative publicity it faced. That publicity, however, had little bearing on long-run earnings -- the company has earned record profits in four of the five years since the scandal became public (MSN Moneycentral, 2011). If anything, removing the leak assisted the company's profitability because it removed a competitive disadvantage that was providing critical information to the firm's competitors. Thus, when the consequences of Dunn's investigation are analyzed, there are few negative consequences and some overwhelmingly positive consequences.

Those who suffered negative consequences were more than able to survive and thrive despite the setbacks. Even Dunn, who eventually faced charges for the investigation, saw those charges dropped and the attorney general who brought those charges faced a storm of criticism for doing so, indicating that the charges themselves may have been one of the most morally wrong things about the case. From both the deontological and consequentialist perspectives, there is little case to be made that Dunn should have been forced to resign.

In essence, she was forced to resign because she acted in the interests of the shareholders rather than the interests of the board. This was misplaced -- Dunn's role is to act as agent to the shareholders, even if that means confronting the board. That the criminal charges were dropped indicates that they should never have been brought in the first place,.