Offering a rare glimpse into the inner workings of the American Medical Association's board of trustees, a report released last week portrayed the 20-member governing body as one in disarray, with trustees spending too much time on lucrative advocacy work and internal politicking at the expense of fiduciary duties.
Such governance problems at the AMA were "enabling factors" that contributed to the embarrassing Sunbeam endorsement scandal, the 11-page report said.
The report, from an ad hoc committee of the AMA's House of Delegates, concluded the AMA board had "no reason to suspect that a joint venture or exclusive contract with Sunbeam was imminent" before the deal was publicly announced last August.
Additionally, the crisis management immediately after the Sunbeam announcement was "poorly handled," and no crisis management plan appeared to have been in place, the report said.
The report was sent to AMA delegates in preparation for their annual meeting in Chicago starting June 14.
In an attached written statement, board Chairman Thomas Reardon, M.D., said many of the report's recommendations were being implemented.
"We are encouraged that the committee's findings are totally consistent with those of the board's own investigation last year," Reardon said, referring to an internal study that found AMA staff acted without board approval in signing the exclusive licensing agreement, in which the AMA agreed to attach its name and logo to Sunbeam healthcare products in exchange for sales revenues.
The internal report prompted the immediate departure of three senior executives. Executive Vice President P. John Seward, M.D., resigned several weeks later.
In his statement, Reardon did not address the report's extensive criticism of board operations. Reardon and trustee Nancy Dickey, M.D., who was board chair shortly before the Sunbeam deal was signed, didn't return phone calls last week.
Some criticisms have been leveled at the board, most recently by a special committee convened in 1996 to examine board composition. However, that committee recommended that the board resolve issues internally.
The new report recommends actions to be considered by the House of Delegates' Committee on Structure, Governance and Operations. Recommendations include the board's setting its own agenda rather than relying on staff, providing training for the board chairman, coordinating communication between trustees and staff through the chairman and delegating more work to committees.
Also recommended is that much of the representation and ambassadorial work be done by nonboard members and that the roles of the AMA president and chairman be clearly defined.
A president is elected by the House of Delegates to be the official AMA spokesperson. However, the report said a board chairman has the power to assign advocacy duties and often chooses to perform those functions.
Committee Chairman Mark Levine, M.D., a Colorado delegate, said he hopes the report will spark discussion. "Making mistakes is important as long as you can grow with them," he said.
But Levine acknowledged that some delegates may find the report "too weak." At the annual meeting, the House will consider resolutions from the Illinois delegation calling for open board meetings and full disclosure of costs relating to the terminated contract with Sunbeam.
Reardon and the committee report both expressed hope that the report will "put the Sunbeam matter into the AMA archives."
However, another nagging issue remains. The AMA board has yet to dispose of a $20 million abandonment-of-contract lawsuit filed by Delray Beach, Fla.-based Sunbeam. A trial in the case has been set for Nov. 2 in U.S. District Court in Chicago.