Divided they stand

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The innovative founder and chief executive officer of Sunrise Senior Living Inc. can’t be having too much fun right now.

Earlier this week, Paul Klaassen stepped down from his post as chairman of the board from the largest assistant living chain in the United States. He also agreed to pay back bonuses “to re-establish the appropriate tone and culture necessary to restore an effective control environment.”

Meanwhile, his company has until Monday to file a 2006 earnings report or face delisting from the New York Stock Exchange.

The company’s slide to this unfortunate position has been two years in the making. In 2006, the firm revealed internal accounting problems. It has since confronted accusations from the Service Employees International Union of insider trading, the timing of stock option grants and its unique way of keeping the books. The Securities and Exchange Commission subsequently launched an inquiry into the matters.

In recent months, the company dismissed several executives after an independent review uncovered inappropriate accounting practices over a two-year period. Last May, it fired Bradley B. Rush, its former chief financial officer.

Not a stellar turn of events for an international company that has effectively changed the eldercare landscape. Paul and his wife, Teresa, introduced strikingly forward-thinking concepts, some of which are a part of the culture in the Netherlands, into their facilities.

These include Reminiscence Neighborhoods; life stations, which help residents with Alzheimer's disease reconnect with their past; shadow boxes on residents’ doors to trigger memories; and Snoezelen rooms, which offer comforting sensory experiences for residents with dementia.

All these ideas underscore a powerful philosophy: Caregivers need to understand the mindset of those with Alzheimer’s instead of fighting against it.

(In the interest of full disclosure: Haymarket Media Inc., which publishes McKnight’s Long-Term Care News, also publishes a lifestyle magazine for families and prospective families of Sunrise residents.)

The company’s recent tailspin offers a cautionary tale for all firms in corporate America. As the chain of events continues to unfold, those who may be found responsible for corporate wrongdoing should rightfully accept the consequences.

But it is a shame that a company that has brought so much to the field could sully its reputation with so-called white-collar crimes. Is it possible to separate corporate malfeasance from the company’s mission on the ground? I think so.

Regardless of the fiscal and other repercussions that may ensue, it is worth remembering that the company’s caregiving accomplishments stand on their own merits. Sunrise has a model of care that would have been unthinkable 30 years ago. It’s a safe bet that when the dust settles it will continue to be a leader in the field and in the way we treat and perceive those living with Alzheimer’s.


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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.