After several years serving as a respected department director in the local hospital, you have been invited to join the board of directors of a local clinic that serves the homeless in your cmmunity. It is organized as a not-for-profit corporation. You begin attending board meetings. Over the course of the first year of your appointment, you notice that the clinic’s executive director is heavily involved in local political activities, and she places political literature in the clinic waiting areas and exam rooms as reading material. You also hear rumors that she is funneling donated funds intended for the clinic into the campaign funds of some of her political friends, one of whom serves as alongside you as a member of the board of directors. When you approach her to ask about this, she reminds you that she is a 51 percent owner of the corporation and therefore she has the control to decide how best to direct all funds. You are disgusted by this response and lose the enthusiasm for your appointment, and you begin to skip board meetings.

1. 1. What risks are posed by this scenario? To the corporation? To the board of directors collectively? To you personally?
2. What duty is the “political friend” director violating?
3. What duty are you violating?
4. What recommendations should you make to the board of directors to manage the risks and violations you have identified?
5. Which of your behaviors should you change to protect yourself against potential liability?

You do not need to necessarily submit a paragraph for all of these answers. However, your answers should be full sentences.