BA Boeing Co

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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