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CORPORATE RESPONSIBILITY AND CORPORATE COMPLIANCE: A Resource for Health Care ±Boards of Directors±THE OFFICE OF INSPECTOR GENERAL OF THE±U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES±AND THE AMERICAN HEALTH LAWYERS ASSOCIATION
ACKNOWLEDGEMENT This educational resource represents a unique collaboration between the American Health Lawyers Association and the Office of the Inspector General of the United States Department of Health and Human Services. This publication would have not been possible without the dedicated effort of numerous individuals at both organizations. It is intended to be a useful resource for those serving on the Boards of Directors of our nation’s health care institutions.
CORPORATE RESPONSIBILITY AND CORPORATE COMPLIANCE I. INTRODUCTION As corporate responsibility issues fill the headlines, corporate directors are coming under greater scrutiny. The Sarbanes-Oxley Act, state legislation, agency pronouncements, court cases and scholarly writings offer a myriad of rules, regulations, prohibitions, and interpretations in this area. While all Boards of Directors must address these issues, directors of health care organizations also have important responsibilities that need to be met relating to corporate compliance requirements unique to the health care industry. The expansion of health care regulatory enforcement and compliance activities and the heightened attention being given to the responsibilities of corporate directors are critically important to all health care organizations. In this context, enhanced oversight of corporate compliance programs is widely viewed as consistent with and essential to ongoing federal and state corporate responsibility initiatives. Our complex health care system needs dedicated and knowledgeable directors at the helm of both for-profit and non-profit corporations. This educational resource, cosponsored by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services and the American Health Lawyers Association, the leading health law educational organization, seeks to assist directors of health care organizations in carrying out their important oversight responsibilities in the current challenging health care environment. Improving the knowledge base and effectiveness of those serving on health care organization boards will help to achieve the important goal of continuously improving the U.S. health care system. Fiduciary Responsibilites The fiduciary duties of directors reflect the expectation of corporate stakeholders regarding oversight of corporate affairs. The basic fiduciary duty of care principle, which requires a director to act in good faith with the care an ordinarily prudent person would exercise under similar circumstances, is being tested in the current corporate climate. Personal liability for directors, including removal, civil damages, and tax liability, as well as damage to reputation, appears not so far from reality as once widely believed. Accordingly, a basic understanding of the direc