Corporate Governance and Ethical Responsibility Term Paper

Corporate Governance and Ethical Responsibility - Term Paper Example They can include the patients, surrounding community and government. However, this paper only focuses on three stakeholders: the employees, shareholders and the patients. As a hospital director, Dr. DoRight owes the stakeholders duty of loyalty in all aspects of the hospital performance. This duty requires that Dr. DoRight should act in the best interest of the shareholders and the hospital as an entity. The duty of loyalty also restricts Dr. DoRight to make him stay away from his personal interests and self dealing which can be at the expenses of the stakeholders. Dr. DoRight also owes the stakeholders duty of loyalty that dictates him not to enter into some acts that may help him receive personal benefits improperly and end up causing harm to the stakeholders and the hospital at large. To the patients, Dr. DoRight owes a duty of loyalty that requires him to act in good faith and care which any other prudent and ordinary person in the same position would accord in a similar situatio n in order to safeguard both the interest of the patients and the hospital (Martin, 2001). The duty of loyalty is also owed to the employees, especially in making decisions. Dr. DoRight is required to have his decisions made in good faith, being well informed and with honesty when dealing with the employees in order to safeguard their interests, as well as those of the hospital through the judgment rule of the business. In order to have this protection invoked, Dr. DoRight owes them the duty of information on all the reasonable material information available. The rule of business judgment may not protect Dr. DoRight when he has financial interests at a personal level in the transactions, fails to have information on the situations, is not independent, or fails to carryout the duty of loyalty and care. Dr. DoRight must make sure that he follows the standard of fairness to the hospital and all the stakeholders (Pickstock, 2007). Dr. DoRight as a director of the hospital has the duty t o facilitate the maximization of the shareholders’ wealth and enhance the interests of the shareholders. In summary, Dr. DoRight must ensure that maintains the rights of the shareholders and treats them equally, honor the interest of all other stakeholders like the patients, observes integrity and ethics in his duties, and remains transparent with all his actions. Question two Stakeholders have different interests in hospital. For instance, the shareholders who invested on the hospital are interested in the survival and profitability of the firm. They are classically concerned with the allocation of investment earnings and their residual earnings that is paid to the as dividends; the company management, including Dr. DoRight, is interested in the efficiency of the hospital in generating the profits. The general performance of the hospital is regarded as the effectiveness of management and can be observed by particular financial rations; the customers such as the patients are interested in the ability of the hospital to continue providing the health services to them; employees may be interested in high wages in order to keep their work running; suppliers on the other side want to see their products bought and paid for by the hospital and the lenders are interested in the liquidity position of the hospital to check if they will be paid in time; and the community in general is concerned with environmental