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The use (and abuse) of commercial structures

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management | Sep 24, 2018 10:36:00 AM

“Memorial Sloan Kettering is in turmoil over a deal officials made to share cancer patient data with a for-profit artificial intelligence start-up.”

This headline from the New York Times ((Sept 20th, 2018) is indicative of the growing challenge around the use of data. On one hand, certainly in an instance like this, the use of AI to improve diagnostics and treatment of life-threatening disease is compelling. But the benefits that flow from AI depend almost entirely on the volume and quality of data feeds – and those benefits also excite commercial interests with the prospect of making lots of money.

According to the New York Times, Memorial Sloan Kettering (a not-for-profit entity) is a shareholder in the for-profit AI company, Paige.AI. But even more compromising, so are a number of officials from Memorial Sloan Kettering and three of its board members are investors. Hospital staff are complaining and also questioning the use of patient data without their knowledge.

Conflicts of interest

People rightly expect that not-for-profit entities work for the public good. Otherwise, what is the justification for their freedom from taxation? As a result, they also tend to believe in the underlying integrity of such organizations and that Board Members will oversee and maintain those standards of honesty and probity. Unfortunately, a growing number of incidents challenge that belief.

Memorial Sloan Kettering is just one example of this problem. Recent incidents within the charity sector, where workers have been accused of large-scale sexual abuse and exploitation, is another. In this instance, it was not financial interests that were at issue, but rather the extent to which there was failure ot act and, in some cases, direct cover-up of employee behavior. The Catholic Church is another example, where for centuries abuse has been denied in what can only be commercial interests, since there is certainly no moral or religious justification for either the behavior or the way its victims have been treated.

It sometimes seems as though non-profit status endows organizations with a sense of their own self-righteousness, a belief that the worthiness of their cause somehow justifies their actions, no matter if these are unprincipled, self-serving or dishonest. In an era where data is a core item of value, and where openness and transparency are core to trust, we may need new oversight rules and mechanisms for the non-profit sector to ensure that organizations truly do work with integrity and in the public interest.

Topics: contract /commercial management, commercial management, contract management

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