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Topics: American Red Cross, Corporate governance, Management Pages: 1 (276 words) Published: January 15, 2011
4\ what effect does organizational structure and compensation have on ethical behavior among chief executives at ARC? The American Red Cross faces many ethical risks and challenges. some are common challenges for any organization of its size, such as executive compensation, preventing and handling employee misconduct, and considering all stockholders in its operating model. Other risks are unique to the Red Cross, such as transparent and accurate representation of the organization's need for, and use of, monetary donations, volunteer time, and blood donations. Also, the ARC has the ethical challenges of maintaining effective and efficient operations to respond to disasters and transparently reporting the organization's accomplishments, failures, and opportunities for improvement in disaster response activities. The executive turnover experienced by the ARC has brought to light the compensation awarded top executives. Bernadine Healy was given 1.9 million$ in salary and severance pay when she left in 2001. Marsha Evans was given 780,000$ when she left in 2005. Much time and money was also spent in the search for and training of these top executives. this frequent executive turnover has significantly weakened the organization's ability to carry out its federal mandate. some blame the over sized board of directors. "the board seems to think it is a hiring and firing agency, and does not see its role as building a strong red cross." Said Paul C. Light, a professor of public service at New York University. "The constant change in leadership is debilitating and does nothing to address the real problem, which is years and years of underinvestment in telecommunications, technology and other infrastructure to help the organization with its mission  
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