WK4A1: Please use APA format and list and site all sources and references: Resea
ID: 122052 • Letter: W
Question
WK4A1:
Please use APA format and list and site all sources and references:
Research several hospitals of your choice and identify how many Board members are on the Board and their length of appointment.
As Boards are prohibited from managing, discuss the major duty of a Board. By what mechanism does a board understand the status of the hospital financially and operationally?
What did the Saberness-Oxley Act demand of Boards and why?
What is D/O (Directors/Officers) insurance and why is it needed?
Please use APA format and list and site all sources and references: cite your sources in your work and provide references for the citations in APA format.
At least one Page in APA format.
Explanation / Answer
Ans:
Research
In accordance with the Saberness-Oxley Act, all organizations are required to have accountability in the use of finances in all the organizations including hospitals. In this research, the board of directors of three hospitals was undertaken. These hospitals are: Company Overview of The Johns Hopkins Hospital, Massachusetts General Hospital and New York-Presbyterian University Hospital of Columbia and Cornell, N.Y. The Johns Hopkins Hospital has a board of directors of 29 members, Massachusetts General Hospital has 39 board members (Massachusetts General Hospital, 2016), while the New York-Presbyterian University Hospital of Columbia and Cornell has 91 members working under the Chairman called Frank A. Bennack, Jr (New York-Presbyterian University Hospital, 2016). The length of the appointment of the board of members depends on the hospital and therefore there is no fixed contract term. Furthermore, the board members have the opportunity to renew the contracts depending on their influence and the quality of services offered, but the contractual renewal is a matter that is addressed with the policies of the given Hospital.
Duties of the Board
The board of directors is tasked with the performance of several functions in the hospital setup. The financial performance of a hospital is related to the professionalism and the competency of the board of directors that is in place. The board of directors is tasked with six key roles that are outlined below. First, the board of directors is tasked with the specification of the financial objectives of the hospital. Second, the board of directors is tasked with reviewing and aligning the management financial plan with the set objectives. Third, it is the responsibility of the board of directors to enhance the credit worthiness of the hospital. Fourth, the board of directors is required the effective allocation of hospital resources to enable all the functional areas of the hospital to run smoothly. Fifth, the board of directors is required to monitor the financial performance of the hospital and take the necessary measures when the performance is undesirable. Sixth, it is the responsibility of the board of directors to verify the financial statements of the Hospital so that the statements are a true reflection of the financial position of the Hospital (Culica&Prezio, 2009). The board of directors is in position to understand the financial status of the hospital because it is tasked with the verification of the financial statements of the hospital with the help of the audit team. In regards to the operations of the Hospital, the board of directors is able to understand the operations of the hospital because it is involved in the daily monitoring and supervision of the operations and also budgets for the same operations to ensure the smooth flow of operations ((Culica&Prezio, 2009).
Demands of the Sarbanes-Oxley Act
This act came in operation in the year 2002 with the purpose of restoring the confidence of investors in the markets by closing the existing loopholes in Companies that had contributed towards defrauding the investors. The Sarbanes-Oxley Act demands Companies to have a board of directors with a strong functional audit committee. The Act demands that internal control tests are put in place to prevent the misuse of Company resources. Very accurate financial statements and reporting are a must requirement and Companies are required to put in place stricter criminal penalties for those found in frauds. There is to be independency of the audit committee from the top management of the Company so that they can perform their roles without interference (Green, 2004). Furthermore, the Act to include the internal control report with the annual audits. Also, the Act requires testing and documentation of the manual and automated controls in financial reporting is required with the help of external accountants and IT experts.
Directors' and officers' liability insurance
Directors’ and Officers’ liability insurance, which is sometimes known as D&O insurance is an insurance cover that covers the cost of compensation against the claims that are made against the directors and the key managers (officers) of a Company for the alleged wrongful acts that include breach of trust, negligence, error, misleading statements and wrongful trading among others. A Company needs to have the D&O insurance to cover the cost of defending the directors and the officers in defense proceedings as well as the other costs that arise from unsuccessful defense (Mathias, 2000). As such, this particular insurance cover is important in protecting a Company from financial loses likely to occur due to the claims made against by the shareholders, investors, regulators and even the employees.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.