Corporate Governance and Ethical Responsibility Dr. DoRight recently hired President "Universal Human Care Hospital," oversees departments 5,000 employees 20,000 patients medical facility. He provided a broad set duties oversight numerous departments, including business development, customer services, human resources, legal, patient advocacy, a .

Corporate Governance and Ethical Responsibility

Duty of loyalty owed to internal and external stakeholders

According to Heath (2006)

, duty of loyalty entails good faith and honesty in best interests of a corporation's stake holders. The duty of loyalty involve the no-profit rule and no conflict rule Heath, 2006.

The duty of loyalty thus implies that, a person in-charge of overseeing the operations in an organization should not let his/her personal interest dictate performance of duty. It also governs actions which must be guided by honesty and good faith. A corporation's stake holders can be classified into two; internal and external Weaver, 2006()

Duty of Loyalty to Internal stakeholder

Internal stakeholders in hospital include those people who operate within the hospital. They will include: Medical personnel (doctors, nurses and physicians); Shareholders and the management Staff Milgrom P. & Roberts J., 1992.

Dr. DoRight is charged with the duty of loyalty to this group of stakeholders to provide leadership in their service within the hospital. He should ensure that the internal stakeholder understands the need for them to undertake their service delivery with the diligence it requires.

While the Medical personnel are undertaking their roles in the hospital Dr. DoRight should ensure that the follow that laid down procedure without deviations. Doctors, Nurses and physicians should abide to the laid down rules and regulations in their practice. He should oversee that their duty performance reflects the right procedure and do not lead to unwarranted loss of life and dissatisfaction of clients. The duty of loyalty to internal stakeholders requires Dr. DoRight to provides a safe work environment and proper remunerations towards their contribution in the running of the hospital.

Dr. DoRight owes the shareholder good financial records that encourage their continued investment in the hospital. He is charged with the duty to ensure that, the shareholders earn good returns on their capital as well as giving them future prospects of higher dividends.

To his management staff Dr. DoRight is charged duty of loyalty to guarantee a security of tenure in their service to the hospital. He is expected to give good remunerations and amenities to his management staff so that they can continue to provide services with a commitment.

Duty of Loyalty to External stakeholder

External stakeholders entail those parties who have interests in the success of the hospital. They will include; the shareholders, consumers or clients, and the competitors Milgrom P. & Roberts J., 1992.

Dr. DoRight is responsible to ensure that the clients to the hospital receive services in accordance to the mission and vision of the organization. He is also responsible to overlooks interests of the share holder are met without overriding those of clients.

As far as loyalty is concern Dr. DoRight should not compromise that quality of service to clients in the name of pleasing the share holders. Competitors to the hospital are external stakeholders because they are key proponents to the market share the hospital serve. They are concerned with service delivery in the community. Towards this end, Dr. DoRight has the duty to ensure that they are fairly competing in the market to avoid litigation and a damaged image to the hospital.

Conflicts Of Interest in Loyalty between Internal and External Stakeholders

Irrespective of the director's appointment methodology, in most cases they tend to operate directly targeting the interest of persons who appointed them. Little consideration is in many cases given to other core stakeholders Gilbert J.A., 2007.

The loyalty of many of directors with thus seen to conflict between internal and external stakeholders.

Directors and presidents such as Dr. DoRight as faced up with a hard decision to ensure satisfaction to those he owes a duty. The internal stake holders will feel inadequately catered for should the president, fail to meet their request for higher remuneration for service delivery or even increased dividends for invested capital.

Conflict among the stakeholder arises where the clients need to receive service at lower cost and against the need for staff to get higher incomes and that of shareholder to require increased profits Heath, 2006.

The desires for the management team are to get higher allowances, the shareholder needs him to cut cost and clients and staff expect to have better equipped facilities is the hospital. The loyalty of the presidents is stretched and this is why there are legal guides to protect directors...

DoRight, has fulfilled his ethical duty only to some extent. It is expected that by being the overall in-charge of day-to-day operations he would go a step further to authorize investigations and have the matter resolved. As the one charged with the duty to run the hospital, Dr. DoRight should be in a position to mitigate and ensure that the clients as stakeholders receive value for service and the hospital meets it obligation to the community in safeguarding life.
Recommended Additional Steps

Encourage Responsible Business Conduct

Dr. DoRight should have taken steps to explain to his staff and management and make them understand the obligation the hospital has to the society. It is the responsibility of the management and staff to safeguard the stakeholders' interest even when the stakeholders seem adamant to ignore. Khurana and Nohria (2008)

, argues that a responsible business conduct is one which recognizes that one belong to a community, and he/she is charged with the responsibility to uphold values and act in a manner that will not harm those within Joseph R.D. & McCall J.J., 2005()

Form an Ethics Committee

To oversee and investigate the practice of medicine in the hospital, Dr. DoRight should consider forming an ethics committee to ensure ethical compliance within the hospital. The committee would help implement an ethics program within the institution and oversee that medical practitioners follow it up. It is also the role of the committee to monitor changes in the community and social arena and improve on their ethics program considering the changes. This will go a long way to ensure that Dr. DoRight is not sidelining he loyalty to the community and the hospital at large Khurana & Nohria, 2008()

Ensure Good Corporate governance

Good corporate governance is defined by Joseph R.D. & McCall J.J., 2005()

to entail responsible leadership, considerate performance in operations and strict adherence to set rules and regulations that govern operations. Good corporate performance is achievable with setting up procedures, standards and core beliefs that are reflective of stakeholders interest without sidelining any of them. An understanding of the need and values of the stakeholders is desirable in these aspects. Where there seem to be conflict of interest that will sideline operations or encourage unwarranted conflict, training to reorient should be considered Weaver, 2006()

Conduct investigations and One-on-one Interviews

Interviews to investigate the illegal practices should be considered. This will act to get to foot of the problem and guide on mitigation measures. Dr. DoRight should authorize investigations in the hospital to establish what influences the illegal procedures and negligence in supervision and care to patients. This will help him come up with guided steps to follow on matters concerning operations and duty of care in service delivery Khurana & Nohria, 2008.

The cause of the continued illegal procedure and negligent service delivery in the hospital will be established. Further the management will go a long way to resolve the probable not only internally but also in the community by setting guidelines. Towards loyalty in duty performance, Dr. DoRight will serve to ensure to the stakeholders reliable services and continued operations in the hospital.

Through the interviews, a serious to uphold standards within the hospital in service delivery will be emphasized. This will show to the community the hospital's commitment to serve and remain loyal to them. By extension that shareholders in the hospital will be assured of continued business performance. The hospital will also be able to stay in line with the guide principles governing service delivery in the healthcare industry.

Deontology principle and its application in Dr. DoRight dilemma

The principle of Deontology states "People should adhere to their obligations and duties when analyzing an ethical dilemma" Ridley A., 1998.

The guide towards upholding ethics in duty is following what one is obligated to do. Deontology is a basis for specialized duties and obligation to specific persons charged with a responsibility. Deontology also requires an individual the go past their obligation to mitigate upcoming inordinate concurrencies. In the case of Dr. DoRight, he undertook his duty in accordance to his obligation. He however, failed to go a step further to mitigate the illegal procedures in the hospital. In following the Deontology principle, Dr. DoRight should have taken measures to oversee that the illegal practices and negligence on the part of the medical practitioners did not continue.

Utilitarianism Principle and its Application to the Ethical Dilemma of Dr. Do Right

Utilitarianism is constituted…