Ethics Scenario #63: Holstead Community Hospital

63. Geraldine is the President and CEO of a Holstead Community Hospital, small nonprofit community hospital in a rural area. A major donor, Alex, has offered to provide a $35 million donation to build a research center adjacent to the main building of the hospital. His stipulations for receiving the grant are that the building is named after his wife and himself, and that the construction is awarded to his son’s company. Geraldine thinks she can finesse both conditions by getting variances approved by the board, which has rules in place requiring a rigorous bidding procedure for capital projects. She thanks Alex, and tells him that his conditions will not be any problem.

a. Is Geraldine’s behavior ethical?