Corporate Governance and Ethical Responsibility

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Ethical business practices have become a core driver of sustainable business performance, even with increasing competitiveness. Entities that fail to maintain ethical practices are at increasing risk of failure due to irreparable damage to their reputation, following unearthing of unethical practices (Heineman, 2007). This paper considers the ethical situation that Dr. Do Right faces, highlights the stakeholders in the situation, notes the implications of Do Right’s decision on such stakeholders and discusses the perspectives that various ethical theories advance with respect to Do Right’s circumstances.

Synopsis of the Situation

The ethical situation that Do Right faces highlights how competing interests of various stakeholders could result into imprudent practices. Dr. Do Right work entails managing employees in a medical facility, Universal Human Care Hospital, which serves over 20,000 patients. Although the entity’s financial performance has been exemplary, even earning Dr. Do Right excellence awards, such performance has been at the background of physicians and nurses performing illegal procedures that lead to patients’ death. Although he has reported the case to his supervising bodies, the results of the investigations that the superiors promised are yet to be released. Accordingly, Dr. Do Right faces an ethical dilemma on whether to report such practices to other authorities, thus avoid further patient deaths, or conceal such practices, hence ensure the entity continues its positive performance reviews.

Internal and External Stakeholders that Dr. Do Right might have to deal with

Dr. Do Right’s position in the entity and the situation he faces highlight various stakeholders that he has to deal with. Within the organization, Dr. Do Right has to deal with employees (physicians and nurses, some of who are involved in illegal practices), investors (who desire a positive financial performance from the entity) and his superiors, who desire favorable performance reviews for the entity. For the physicians and nurses, Dr. Do Right’s whistleblowing could lead to their careers’ termination. For the investors, Dr. Do Right’s disclosure might scare clients (patients) away thus reducing the profitability of the entity and hence the shareholders’ return on their investment.

Externally, Dr. Do Right has obligations to stakeholders such as patients, organizations that the entity does business with, and professional bodies to which he is affiliated. For patients, Dr. Do Right needs, for instance, to ensure that they receive quality care for which they have paid. For the professional bodies, Dr. Do Right needs to ensure that he conducts his practice in a manner that does not bring the profession into disrepute. For the organizations that collaborate with the hospital, Dr. Do Right needs to ensure that the reputation of the entity is impeccable to avoid such organizations losing favor with their other clients who might feel that the organizations promoted the hospital’s imprudent practices.

Potential conflicts of interest between the internal and external stakeholders

The different needs of internal and external stakeholders present various avenues for conflicts between the two sides. Firstly, whereas shareholders demand higher profitability for the entity, to realize their return on investment, clients (patients) demand quality health care for the money they pay to the entity. In this respect, where the shareholders pursue such profitability irrespective of the expense, there could arise a conflict with patients’ need for quality care.

Secondly, potential conflicts exist between the needs of physicians and nurses engaged in imprudent practices and the interests of the professional body. Whereas these employees would like the status to remain as it is to avoid termination, the professional bodies would need Dr. Do Right to ensure that the practitioners remain true to their oaths, thus protecting the profession from disrepute. Thirdly, Dr. Do Right’s supervising bodies demand continued favorable reviews of the entity at all cost, as evident from their hesitance to investigate, which could be in conflict with interest of collaborating bodies that demand that the entity follows ethical practices in its business.

Has Dr. Do Right fulfilled his ethical duty by reporting the illegal procedures?

Dr. Do Right’s reporting of the illegal procedure is the correct ethical decision in the situation he faces. Such an action is not only supported by various ethical theories, as discussed subsequently, but also highlights the need for entities to adhere to ethical business practices even when facing challenging business conditions (Heineman, 2007). Maintaining ethical practices would imply acting in integrity and professionalism, which researchers such as Brown and Trevino (2006) have identified to be core characteristics associated with ethical leadership. Failure to disclose the malpractices would mean that Dr. Do Right condones such illegal practices, an implication that would create an organizational culture where illegal practices prevail.

Deontology Principle and Its Application to Dr. Do Right’s situation

Deontology ethical theory basis its advancements from Immanuel Kant’s (1724-1804) writings that emphasized that an individual’s actions ought to be based on an universal law. Accordingly, deontology regards the basis for determining whether an act is right or wrong to be the intent behind the act, rather than the consequence following the act (Pieper, 2008). Deontology is thus a non-consequentialist theory, which basis its determination on the intent that one had in performing an act instead of evaluating the outcomes that arise from performance of such an act. In determining the intent of the actor, deontology bases its evaluation on universal principles that determine what is perceived to be morally correct or good (Pieper, 2008).

The principle of deontology is that the ethical nature of the action an individual undertakes lies in the will behind the action. Where such will is good, then the action undertaken is ethical, hence the right action. To determine whether the will or intent was good, deontology advises on the need to evaluate such actions according to their adherence to duty, precept or law. For instance, Kant noted that acting in “good will” is acting out of ones respect for moral law, which is acting “for the sake of duty” (as cited in MacDonald & Beck-Dudley, 1994).

Taking the Deontological perspective, Dr. Do Right’s ethical decision is to report the imprudent practices of the physicians and nurses. This is evident from various perspectives. Firstly, by reporting the imprudent practices that physicians are engaging in, Dr. Do Right will be remaining true to the Hippocratic Oath that healthcare practitioners take, binding them to practice medicine ethically. One of the principles identified by this oath is nonmaleficence, which implies that “above all, do no harm” (Stecher, 2011, p. 85). By failing to report such imprudent decisions by the physicians and nurses, Dr. Do Right would be promoting the harm that such staff metes to the patients. Accordingly, by reporting the imprudent practices, Dr. Do Right is remaining true to the moral law established via the Hippocratic Oath.

Secondly, Dr. Do Right’s action to report the cases is ethically correct, according to the Deontological perspective, since it seeks to halt the unlawful actions by the doctors and nurses. Since the practices that the doctors are engaging in are already proven to be illegal, failure to report such actions would mean that Dr. Do Right is not acting in good will. Accordingly, by reporting the actions of the nurses and doctors, Dr. Do Right would be acting for the sake of the duty owed to him by stakeholders such as patients and the professional bodies to which he is affiliated. Although Dr. Do Right owes the internal stakeholders a duty to maintain a good reputation for the entity, or confidentiality of information he holds, such a duty is nullified by the illegal actions of the physicians who go against the universally set law – not to perform illegal medical practices.

Utilitarianism Principle and Its Application to Dr. Do Right’s Case

Utilitarianism is a consequentialist or teleological based theory. Teleological approaches regard the ethical nature of an action to be in the consequences that result from performance of such an act (MacDonald & Beck-Dudley, 1994). Accordingly, for such an approach, any action that leads to “good” outcomes is ethically right while that which leads to “bad” outcomes is ethically wrong. Utilitarianism, being in this group of approaches, provides a criterion for evaluating whether the outcomes from an act are good or bad.

Utilitarianism considers the good or evil nature of an act based on its consequences to all the stakeholders affected by the decision. According to utilitarianism, the best action is that which results in the greatest percentage of good outcomes over bad outcomes (MacDonald & Beck-Dudley, 1994). Utilitarianism is thus a cost-benefit approach, where the ethical nature of the decision is gauged based on its costs and benefits to the entire group of individuals affected by the action.

Applying utilitarianism approach to Dr. Do Right’s situation needs the evaluation of the cost and benefits for the stakeholders involved. For the internal stakeholders, disclosure of malpractices could lead to costs such as loss of jobs for those involved in malpractices and loss of investment income due to a damaged reputation that dissuades clients from visiting the facility. However, such disclosure would also have benefits such as motivation of employees not engaged in imprudent practices, who could have been the source from which Dr. Do Right found out about malpractices.

For the external stakeholders, Dr. Do Right’s disclosure holds substantial benefits. For the patients, the disclosure ensures they receive better quality care at the hospital. For the professional bodies to which Dr. Do right is affiliated to, the disclosure would enhance the public’s trust in individuals from such bodies. However, such disclosure could result into the loss of trust in individuals from the bodies to which the practitioners engaged in malpractice are affiliated. To society, the disclosure would promote adherence to ethical practices even in the face of increasing competition and need to provide higher returns on investment. Accordingly, disclosure of the malpractices would be the right action for Dr. Do Right, even where the utilitarianism principle is considered.


Maintaining ethical business practices even in the face of increasing competition has become core for organizations to achieve sustainable growth. This paper considers the ethical situation that Dr. Do Right faces and evaluates the position that would be ethical for him to take, based on deontological and utilitarian principles. Dr. Do rights situation demands disclosure of the malpractices that the physicians and nurses are engaging in. Disclosure of such malpractices would be in good will since such practices contravene the laws established and the Hippocratic Oath the medical practitioners take on beginning their practice. Even considering utilitarian principles, disclosure would be the better choice for Dr. Do Right since its benefits outweigh its costs.


Brown, M. E., & Trevino, L. K. (2006). Ethical leadership: A review and future directions. Leadership Quarterly, 17, 595-616, Web.

Heineman, B. W. (2007). Avoiding integrity landmines. Harvard Business Review, (2007); 100-108, Web.

MacDonald, J. E. & Beck-Dudley, C. L. (1994). Are deontology and teleology mutually exclusive? Journal of Business Ethics, 13(8), 615-623.

Pieper, P. (2008). Ethical perspectives of children’s assent for research participation: Deontology and utilitarianism. Pediatric Nursing, 34(4), 319-323.

Stecher, J. (2011). Ethics at the end of life in transplant recipients. Progress in Transplantation, 21(1), 83 – 87.

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