Karan Gambhir 251135387

Case Study Analysis Report

Governance Challenges at Good Hands Healthcare

Karan Gambhir
251135387
Karan Gambhir 251135387

Outline:

The situation of Good Hands Medical services in this case is not steady as they're going through

an extreme fix. It is because of money related flimsiness as well as bad governance. The CEO,

George Jackson, says that this contemporary situation is a result of outside components which

are past their control. However, on the other hand, their competitors in the industry are

flourishing with growing profits. With the expected growth of the health-care sector in the

United States to approximately $225.8 billion by 2003, it has become an alarming issue for the

board of directors as they realize that the problem is not due to external factors, rather due to the

internal problems of the organization. Since the role of Board of Directors is to maximize

shareholder wealth, it is in their best interest to identify the issues and resolve them at the

earliest. Among other issues, the issues that I accept to be fundamental are.

Momentary issues

1. Missing Succession plan:

Jackson has neither trained any of his employee(s) to be his replacement nor has he set up any

succession plan as he believes that once he resigns, the board will find a new CEO. I don’t agree

as most of the board individuals are nearing resignation due to their age and the company would

not be able to operate without a CEO.

Solution:

As recommended by the members of the board, Jackson should set a succession plan regardless

of the way that the board could convince him to resign. Some of the other administration

rehearses that should be incorporated are, true assessment of repayment put together absolutely

with respect to the exhibitions and try not to comprise an agreement that gives the CEO a high

remuneration for being terminated.

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2. The Chief Executive Officer:

The biggest problem with the organisation is George Jackson considering various thought

processes. Along with being the CEO, Jackson is also the chair of the board. This creates a

discord between both the roles as it is the responsibility of the board to keep a check over the

performance of CEO and set the remuneration structure for the CEO. Such a scenario could also

lead to misuse of powers for personal gains at the expense of the organization and its

shareholders.

Solution:

The best way to resolve this problem would be to hire a new CEO for the company. However,

simply removing Jackson as the CEO would make the company liable to pay him $25 Million

but as the company is operating on a cash crunch, which would not be an idle solution. The

board should remove him as the CEO but keep him as the chair of the board which would only

make Jackson eligible for a compensation of $3 Million per annum. The new CEO that the board

appoints should not be someone from outside the company as so that there is no connection

between Jackson and the new CEO as Jackson is close to all the top-level management in the

company.

Long-term issues

1. Board Construction:

Due to the lack of balance in the board structure, the viability of the board is seriously impacted.

COO besides being part of the board, has a similar reason as Jackson about the company not

prospering due to external factors. Beside this, due to the absence of financial experience the

various board people, no individual can proficiently investigate CFO's monetary determinations.
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It is also important to remember that a portion of the board members are Jackson's companions,

they have a one-sided assessment toward his decisions. This adds to the unwell organizing of the

board.

Solution:

Because of battle of side interest, O'Malley should either resign from the board or as the COO of

the company. This could make a positive impact as there might be no prejudice inside the board's

choices. From my disposition, aside from this, the company should also hire new board

individuals who could provide their guidance in various industries such as the health sector,

finance, and law.

2. Top Administration Governance:

The role of the Board of Directors is to act in the best interest of the shareholders of the

company. The issue with top management is that David Baker, is a close friend of the CEO and

supports his actions and provides legal protection whenever the board questions the CEO’s

decision. Even though there is an identifiable need to hire additional law firms to cover the scope

of various lawsuits against the firm, David Baker, the Chief Legal Counsel only uses one law

firm for all the legal issues. Also, the CFO, Weave Wayman, is also incompetent in performing

his duties as he is does not use the necessary financial instruments and is not conveying the same

to the auditors.

Solution:

Like the CEO, the COO should also have a succession plan put in place as he would be retiring

soon and someone, he trained could be the new COO and assume his responsibilities. The CEO

should also influence the Chief Legal Counsel to hire additional law firms. In the event that this

doesn't happen, these individuals could almost certainly have to get eliminated by the board.
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Conclusion:

To finish the pivot situation of this business venture organization, Great Hands Medical care

must substitute their CEO, hire new board members, and make necessary improvements in their

top management for the company to be able to capitalise on the increasing health care sector

market and subsequently increase their market share.