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UMMS Board of Directors release investigative report, adopt new policies to prevent past conflicts

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Posted at 3:00 PM, Dec 13, 2019
and last updated 2019-12-13 17:09:06-05

BALTIMORE — The University of Maryland Medical System (UMMS) Board of Directors released an internal forensic audit report that was carried out by a special committee of the Board.

According to the release, the report is a major milestone and advances the governance and operational reform efforts both the Board and the management team have been focused on for the past six months.

In September, the UMMS Board of Directors established the Special Committee by unanimous vote to oversee a forensic audit of the backgrounds and financial interests of 40 Board members and system management from 2016 to June 2019.

There is no question the past conduct undertaken by certain former corporate officers and board members was extremely problematic and damaged the reputation of the System. This investigation was executed to ensure full accountability and transparency as the System moves forward from the troubling events that were discovered earlier this year. However, the report makes clear that the conduct identified is not a reflection of the more than 28,000 hard working women and men of the System or the world class health care provided across the state. Undoubtedly, there were structural, governance and operational flaws at the System’s Board and executive level, much of which has been addressed or is part of an ongoing reform effort. We now look forward to turning the page and focusing on making improvements in the weaknesses that were identified while our doctors, nurses and specialists continue to provide world class care to our patients
Jason Frankl, Board member and Chair of the Special Committee, as well as the Audit and Compliance Committee

The report, which was issued Friday, includes observations and findings, coupled with recommendations to the full Board regarding governance practices, process improvements, remediation and corrective actions based on external counsel's review and analysis.

The Special Committee's recommendations include elements around board structure; conflict of interest; compliance training, education and review; finance practices and other policy enhancements.

"The decision to voluntarily and publicly release the report reflects the desire of the Board to conduct a thorough review regarding the System's challenges and to reassure our stakeholders that we are aggressively addressing those challenges head on," said UMMS Board Chair James "Chip" DiPaula, Jr.

The Board also acted to adopt a series of new governance policies that include the following:

  • Code of Conduct
  • Confidentiality
  • Corporate Governance
  • Corporate Opportunity
  • Director Engagement
  • Directors as Vendors
  • Management Duty to Disclose
  • Outside Business Activities of Management
  • Oversight of Corporate Compliance
  • Oversight of Senior Management

Additional policies are being developed to address the findings and recommendations contained in the Special Committee Report and will be recommended to the Board for adoption as a part of a comprehensive governance handbook. The handbook represents the Medical System's commitment to good governance, best practices and ensuring that past issues will not reoccur.

Over the past six months the Board has approved of a new conflict of interest policy in May that has since been adopted by UMMS' affiliate hospitals which created uniformity across the entire System; created a new Board Governance and Nominating Committee; selected a new President & CEO, Mohan Suntha, MD; and conducted a thorough review of management and governance practices to align with top professional standards.

The Special Committee, which was established early 2019, was advised by Latham & Watkins, LLP.