Reference no: EM133029572
Question - Dr. Elizabeth Mackenzie is a psychiatrist who has worked in a variety of government-funded mental health and addiction centres over her 22-year career. She has received numerous awards for her dedication to her patients and her innovative therapies, which are based on the role that she believes nature can play in recovery.
With clinical space in traditional hospitals and clinics shrinking, Dr. Mackenzie has been looking for locations with more square footage as well as green space. Unable to find what she and her patients needed, she decided to create the Mackenzie Wellness Centre (MWC), a custom-built treatment facility designed around her therapies. Patient care is of critical importance. However, because Dr. Mackenzie will be leaving her salary from the government-funded clinics, she needs MWC not only to be profitable (to fund her salary and the salaries of the staff as well as the operations) but also to grow in value. The eventual sale of the business will fund her retirement.
Dr. Mackenzie and her husband, Anthony, incorporated MWC on January 2, 2020, with the help of a lawyer. They are presently the only directors of the company, but the articles of incorporation require a minimum of seven and a maximum of 12 directors.
Dr. Mackenzie does not want to "run the business" of MWC as its CEO; she feels that she can best serve MWC as the senior VP of patient care. Anthony, an architect, will help design the building, but that is where his involvement will end. He has no interest in being an active member of the board of directors or management, which means MWC will need to hire a CEO, a CFO, and a senior VP of administration to look after HR, purchasing, and building maintenance.
MWC is being funded by the Mackenzies and external shareholders that wish to remain silent partners. In exchange for 50% of the financing, the external shareholders will own half the building and receive a dividend equal to 50% of the annual net profits.
The construction of MWC began on March 1, 2020. Shortly thereafter, Dr. Mackenzie realized that there was much more to running the clinic than just preparing for the arrival of patients. She reached out to you, CPA, on July 1 to help her decide how the organization should best be governed by a board and its management team so that it is profitable and has the highest ethical and clinical standards.
Describe what processes will be required for Dr. Mackenzie's recommended role above to maintain an appropriate governance structure.