After several years serving as a respected department director in the local hospital, you have been invited to join the board of directors of a local clinic that serves the homeless in your cmmunity. It is organized as a not-for-profit corporation. You begin attending board meetings. Over the course of the first year of your appointment, you notice that the clinic’s executive director is heavily involved in local political activities, and she places political literature in the clinic waiting areas and exam rooms as reading material. You also hear rumors that she is funneling donated funds intended for the clinic into the campaign funds of some of her political friends, one of whom serves as alongside you as a member of the board of directors. When you approach her to ask about this, she reminds you that she is a 51 percent owner of the corporation and therefore she has the control to decide how best to direct all funds. You are disgusted by this response and lose the enthusiasm for your appointment, and you begin to skip board meetings.
- 1. What risks are posed by this scenario? To the corporation? To the board of directors collectively? To you personally?
- What duty is the “political friend” director violating?
- What duty are you violating?
- What recommendations should you make to the board of directors to manage the risks and violations you have identified?
- Which of your behaviors should you change to protect yourself against potential liability?
You do not need to necessarily submit a paragraph for all of these answers. However, your answers should be full sentences.
Expert Solution Preview
Introduction: As a medical professor and member of the board of directors for a local clinic that serves the homeless, it is important to maintain ethical and legal standards in all decision-making.
1. The risks posed by this scenario include damage to the reputation and credibility of the corporation, potential legal ramifications for the executive director and other involved parties, and a loss of trust from donors and the community. The board of directors collectively risks being held liable for any unethical or illegal actions taken by the executive director. Personally, the professor risks being associated with any wrongdoing associated with the clinic and potentially damaging their personal and professional reputation.
2. The “political friend” director is violating their duty of loyalty to the corporation by using donated funds for personal political gain, rather than for the intended purpose of supporting the clinic and its patients.
3. The professor may be violating their duty of care and loyalty by skipping board meetings and failing to address the ethical and legal concerns surrounding the executive director’s actions.
4. Recommendations to manage the risks and violations include conducting an investigation into the alleged misuse of funds, implementing a clear code of ethics and conflict of interest policy, removing the executive director if necessary, and increasing transparency and accountability in financial management. The board should also ensure that all members understand their duties and responsibilities and are trained in ethical decision-making.
5. To protect themselves from potential liability, the professor should ensure that they attend all board meetings, raise concerns and address ethical violations in a timely manner, and maintain thorough documentation of all actions and decisions made by the board. The professor should also seek legal and ethical guidance when necessary.
