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Markkula Center for Applied Ethics

First Class Air

Is stewardship simply a matter of perception?

Markkula Center Staff

Healthcare Support Services (HSS) is a newly formed national nonprofit with offices in both California and New York. The CEO, Jason, frequently travels between the two locations. On one such trip, Jason was headed to California to pitch a major foundation on an initiative that could result in a significant contribution.

Jason had his staff book a red-eye flight to avoid the expense of a hotel stay, but also requested first-class travel so he would be rested for the next day’s presentation. Jason also preferred this arrangement, so he could free up some time to see to personal matters. The cost savings of flying the red-eye did not offset the additional cost for first-class, though it was not substantially more.

Jason’s previous organization had a policy that allowed for first-class travel at the discretion of the executive, and HSS has yet to establish its own policy. Also, the increased travel cost pales in comparison to the amount of money that could be gained from the presentation. Jason believes that anything that better prepares him for the presentation is in the best interest of the organization.

Then again, the public’s perception of a nonprofit CEO flying first-class could lead to the organization’s integrity to be called into question. Supporters of the nonprofit trust it to use those funds to best support the mission, and many would view this as a breach of that agreement.

Pamela, a board member, is aware of Jason’s travel decisions and wonders if it is an issue that should be brought up at the next board meeting. Should Pamela raise the issue? If so, how?

Discussion Questions

How would this case be different if it was a Fortune-500 CEO?

If we take this to be a legitimate use of funds, is the perception of impropriety enough to condemn the purchase?

Should this situation be dictated by company policy or left to the discretion of individual executives?

Sep 13, 2016