The authors thank Jacob Stewart, MBA and graduate fellow, for assistance with research for and preparation of this article.
Health-care Nonprofits: Enhancing Governance and Public Trust
Article first published online: 1 JUN 2012
© 2012 Center for Business Ethics at Bentley University
Business and Society Review
Volume 117, Issue 2, pages 197–219, Summer 2012
How to Cite
BLODGETT, M. S. and MELCONIAN, L. (2012), Health-care Nonprofits: Enhancing Governance and Public Trust. Business and Society Review, 117: 197–219. doi: 10.1111/j.1467-8594.2012.00405.x
Mark S. Blodgett is Associate Professor of Business Law & Ethics, Sawyer Business School, Suffolk University, Boston, MA where he founded and directed the Center for Global Business Ethics and Law. E-mail: firstname.lastname@example.org. He is a member of the Academy of Legal Studies in Business and the International Law Association. His articles appear in the American Business Law Journal, ILSA Journal of International and Comparative Law, Denver Journal of International Law and Policy, Hastings International and Comparative Law Review and the Journal of Business Ethics. He teaches global business ethics, legal and ethical environment of business, international business law and globalization. Linda Melconian is Assistant Professor, Institute for Public Administration and Department of Business Law & Ethics, Sawyer Business School, Suffolk University, Boston, MA where she administers intern fellowships and other programs of public service as Senior Fellow for the Moakley Center for Public Management. E-mail: email@example.com. Previously, she served as Assistant Counsel to former U.S. House of Representatives' Speaker Thomas P. O'Neill, Jr. and as Senate Majority Leader in the Massachusetts legislature where she pioneered state laws in insurance, health care, genetic testing and life sciences. She presents at conferences locally, nationally, and internationally on gender leadership in the public, private, and nonprofit sectors. Her most recent article appears in the Public Policy Forum Journal. She teaches administrative law, nonprofit law and ethics, legal environment of health care, and business ethics.
- Issue published online: 1 JUN 2012
- Article first published online: 1 JUN 2012
Nonprofits are a major part of the U.S. economy and they are not immune from corporate malfeasance controversies. Even Congress has expressed concern about the crisis in nonprofit governance. The nonprofit response to Congress has been a historic initiative recognizing critical challenges to nonprofit governance. In contrast to their for-profit counterparts, nonprofits are committed to missions serving the public benefit and not to shareholder profits. Accordingly, their missions and financial resources are intrinsic to their very existence, which is built upon the public trust. That trust is rooted in fiduciary responsibility and reflected in best practices. This article traces the history of the nonprofit public trust and fiduciary standards and examines principles of Sarbanes–Oxley and other best practices as they apply to nonprofits. The authors sampled 80 health-care nonprofit corporation web sites from eight asset classes to determine compliance with Sarbanes–Oxley and identification of fiduciary duty, ethical values, and other best practices. Among the very largest health-care nonprofits, many comply with Sarbanes–Oxley and identify fiduciary duty, ethical values, and other best practices. However, there are substantial deficiencies in such compliance and identification among all remaining seven asset classes ranging from 99.9 million to less than 100,000. The results appear to corroborate the urgent necessity for reform articulated by the Congress and the nonprofit sector. Nonprofit governance has entered a new era where best practices must be implemented to sustain the public trust.