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Corporate Governance and Ethical Responsibility Case Study


All corporate leaders are faced with a unique set of ethical demands, which they must fulfill. The same case applies to managers who work in a hospital environment.

Such leaders must express their moral duty in everything they do and must create an ethical institution. This paper will assess a case study and discuss all ethical dilemmas faced by the hospitals leader and the appropriate way of resolve the situation.

Internal and external stakeholders

Managers and executives are very important in an organization. As decision-makers, managers must understand that their actions and decisions affect and influence all stakeholders (Prentice and Bredeson, 2010).

In the case study, Dr. DoRight will face on daily-to-daily basis include shareholders, managers, and staff members (doctors and nurses). On the other hand, external stakeholders in a hospital setting whom Dr. DoRight is likely to face on daily basis include clients/patients, community members (community organizations), and board of trustees among others.

Potential conflicts of interest

Without doubt, there are many issues being experienced at the Universal Human Care Hospital. To begin with, patients are dying out of what has been mentioned as negligence and illegal procedures by nurses and doctors.

On the other hand, even when Dr. DoRight reports these matters to the Regional Director Compliance Manager and Executive Committee, they only keep the matter pending promising to investigate and provide recommendations. Two years down, it appears that the situation has not changed and patients are still dying. It is quite clear that nothing has been done to address the situation.

There is potential conflict of interest in this case study. The carelessness and illegal practice by medical practitioners in this particular hospital is not only irresponsible behavior, but it also compromises principles and work ethics.

The conflict of interest comes in that the clients/patients need to be provided with quality services and come to the hospitals seeking attention of doctor and nurses. However, the staff members are careless and do not provide quality services. Consequently, patients continue to die out of this ignorance.

On the other hand, even after the CEO (Dr.DoRight) reports what is happening to the Regional Director Compliance Manager and Executive Committee, they do not make a follow up as promised. It is clear that these stakeholders are very aware of what exactly is happening, but it does not bother them.

They are only interested in what they receive from the hospitals, which includes salaries, meeting allowances and other benefits. They do not perform their duties of making policies for the hospital. As a result, patients continue to suffer. The executive members and director continues to enjoy benefits while patients do not receive quality services, which they need from the hospital.

Has Dr.DoRight fulfilled his ethical responsibility?

When a dilemma faces a leader, he or she should consider all issues and make a decision that best suits the situation. In the case of Universal Human Care Hospital, Dr. DoRight is in a situation that is very challenging considering that he has already reported all the happenings to the relevant officers.

By reporting to the Regional Director Compliance Manager and Executive Committee about what is happening in the hospital, Dr. DoRight has done the right thing. However, he has not fulfilled his ethical responsibility.

To begging with, as a leader Dr. DoRight willingly acted on “definite sense of work and ethical principles” (Ethical Leadership, 2002). This is because he took a step and reported all happenings to his seniors. By just reporting what is happening to the executive and senior most management, Dr. DoRight only did the right thing, but he failed to act and practice his powers as a manager (CEO).

Despite of reporting about the illegal practices and vices, patients continue to suffer under his supervision. Therefore, the blame fully lands on him. This is precisely because he has the mandate to act accordingly and provide an immediate solution as the matter in hand is about life and death.

As a senior manager, Dr. DoRight has a responsibility to make rational decisions, give orders, suck, and even hire (Prentice and Bredeson, 2010). In this situation, Dr. DoRight should not have waited to receive a report for two years.

According to Rainbow, an informed ethical consciousness will be guided by principle of caring and therefore an individual will consider what others demand or expect from him/her (2002). In addition, one should act on principles of justice. By acting on principles of justice, an administrator will manage himself and others fairly (Prentice and Bredeson, 2010).

By so doing, any manager will be able to examine dilemmas from a wide perspective. In this case, Dr. DoRight lacked ethical consciousness because he only reported what was happening but did not act. As a manager, he should have acted with justice, care, and rational. This would have provided a solution rather than waiting two years for an investigation. In terms of leadership, Dr. DoRight was honest by reporting the matter.

He should have promoted ethical awareness to all subordinates. As a manager, Dr. DoRight should have formed an ethical committee, which is usually found in most hospitals (Prentice and Bredeson, 2010). Such a committee would not make a formal decision, but it would raise awareness to all staff members, advice, and educate them on ethical issues. This would provide a long-term solution.

The principle of deontology

The principle of deontology argues that an individual should adhere to his/her obligation and responsibility when assessing an ethical dilemma (Halbert and Ingulli, 2012). This principle simply implies that, any person who has a duty to honor should do so because upholding ones obligation is the right thing to do. Acting according to obligation is considered ethical.

A manager, who is acting based on principle of deontologist, will always fulfill his/her duties as demanded (Prentice and Bredeson, 2010). Individuals who adhere to this principle will definitely produce very dependable decisions because such choices are within their line of specialty.

The principle of deontology is the basis of unique and special duties at the workplace (Halbert and Ingulli, 2012). For instance, a supervisor may have an obligation to monitor and guide his subordinates. On the other hand, principle of deontology also recognizes those individual with extra qualities. In a work place where employees work on specific targets, some individual may produce extra ordinary results.

If one of the workers fall sick or incurs an injury, the output of others will be affected. However, if one of the workers volunteers to do his duty and that of his colleague, he works beyond his limit. Such an individual can be referred as “supererogation” (Rainbow, 2002). In case there is conflict of obligations, one should act rationally and fairly to provide an amicable solution.

In the case of Universal Human Care Hospital, Dr. DoRight had an obligation to control the situation and ensure that all patients received the best services. By reporting to the top management, Dr.DoRight only completed one-step of his obligation and for that, he is a deontologist. However, he should have gone a step further and exceed his limit by making a follow up and investigating the matter to find an ultimate solution.

Principle of utilitarianism

The utilitarian ethical code is established on the ability to foresee the outcomes of an individual’s action (Rainbow, 2002). When faced with two choices (dilemma), the alternative that is advantageous to many people is the better option and therefore ethical (Rainbow, 2002). There exist act and rule utilitarianism.

Act utilitarianism adheres to the choice that benefits many people while the rule utilitarianism takes into account laws and procedures (Rainbow, 2002). In the case of Universal Human Care Hospital, Dr.DoRight acted based on the rule utilitarianism because he followed the procedures of reporting and waiting for feedback from the boss.

He should have acted based on act utilitarianism, which would help him make a decision that would benefit all stakeholders. He should have taken it as a responsibility and form a committee that would discuss the action plan instead of waiting for too long, when patients continued dying.

In summary, “”real leaders concentrate on doing the right thing, not on doing things right” (Ethical Leadership, 2002). As such, corporate leaders have many responsibilities, which they must execute perfectly for benefit of all stakeholders.

Apart from overseeing and supervising activities of an organization, corporate leaders have a special duty of creating an ethical institution. This unique responsibility applies to different organization leaders at all levels of management. Honesty, fairness, and acting rationally constitute to what is considered ethical.

Reference List

Ethical Leadership. (2002). Leadership. Retrieved from

Halbert, T., & Ingulli, E. (2012). Law & Ethics in the Business Environment. (7th ed.). Mason, OH: South-Western Cengage Learning.

Prentice, R. A., & Bredeson, D. (2010). Student Guide to The Sarbanes-Oxley Act. (2nd ed.). Mason, OH: South-Western Cengage.

Rainbow, C. (2002). Descriptions of Ethical Theories and Principles. Retrieved from

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IvyPanda. "Corporate Governance and Ethical Responsibility." April 11, 2019. https://ivypanda.com/essays/corporate-governance-and-ethical-responsibility/.


IvyPanda. 2019. "Corporate Governance and Ethical Responsibility." April 11, 2019. https://ivypanda.com/essays/corporate-governance-and-ethical-responsibility/.


IvyPanda. (2019) 'Corporate Governance and Ethical Responsibility'. 11 April.

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