Boeing Board Members Take Heat for Role in 737 MAX Crisis
April 24 2020 - 8:11PM
Dow Jones News
By Andrew Tangel
Two influential proxy advisers are recommending Boeing Co.
shareholders vote against key board members to protest the plane
maker's handling of the 737 MAX debacle.
Ahead of Boeing's annual shareholder meeting Monday, one of the
proxy firms, Glass Lewis, has recommended voting against Chairman
Larry Kellner, a former airline executive who previously oversaw
the board's audit committee.
"We believe the audit committee failed to mitigate the risk
posed by management's decisions and should be held accountable for
its oversight, " Glass Lewis wrote.
Institutional Shareholder Services, or ISS, recommended
shareholders vote against four longtime board members who served
during the 737 MAX's development and rollout, including Edmund
Giambastiani Jr., a retired Navy admiral who heads a safety
committee Boeing formed in the wake of the twin MAX crashes.
Troubled companies have at times faced recommended votes against
directors, often intended to send a message.
Boeing's troubles have piled up ever since a second 737 MAX
crashed in March 2019. The two crashes, linked to a faulty
flight-control system, claimed a total of 346 lives. Since then, it
has ousted its chief executive and shaken up its board, including
adding three new members and splitting the CEO and chairman
roles.
Board members either didn't respond to requests for comment or
declined to comment.
A Boeing spokesman said the company continues to learn from the
MAX accidents and is taking extensive actions to rebuild trust. "We
have a board deeply engaged in the continuous improvement of our
company and its governance," he said.
In addition to Mr. Giambastiani Jr., ISS recommended voting
against directors Arthur Collins Jr., Susan Schwab and Ronald
Williams. ISS said Boeing's "board can neither disclaim
responsibility for the priorities that were set nor escape
accountability by pleading ignorance of problems that were a
foreseeable result of those priorities."
ISS offered qualified support for Chief Executive David Calhoun,
a director since 2009 who served as board chairman late last year.
Mr. Calhoun became CEO in January after the board ousted Dennis
Muilenburg from the top job.
Voting for Mr. Calhoun "is warranted, with caution," ISS said,
arguing "he needs to demonstrate that he can be an effective agent
of cultural change."
Earlier this year, Boeing said it was nominating two new board
members: Akhil Johri, who until recently was finance chief at
aerospace manufacturer United Technologies Corp., and Steve
Mollenkopf, chief executive of chip maker Qualcomm Inc. They would
succeed longtime directors Edward Liddy and Mike Zafirovski, who
are stepping down.
Former United Nations Ambassador Nikki Haley resigned Boeing's
board in March, saying she disagreed with the company's decision to
request federal taxpayer help.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
April 24, 2020 19:56 ET (23:56 GMT)
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