Two Boeing Directors to Step Down From Board--2nd Update
February 17 2021 - 4:10PM
Dow Jones News
By Andrew Tangel and Emily Glazer
Two longtime Boeing Co. directors are expected to step down as
the aerospace giant's board undergoes more changes in the wake of
the 737 MAX crisis, according to people familiar with the
matter.
The Chicago-based plane maker is expected to announce the
retirement of Susan Schwab and Arthur Collins, these people said.
The company isn't expected to immediately nominate new directors to
the board, one of these people said. The directors' departure could
be announced as soon as Wednesday, this person said.
Mr. Collins, former chief executive of medical device-maker
Medtronic PLC, has been a Boeing board member since 2007. Ms.
Schwab, a former U.S. trade representative, has been on the board
since 2010.
The departures have been under consideration in recent weeks and
are part of a longer-term push to bring new directors onto the
board in the aftermath of the MAX crisis, some of the people
familiar with the matter said. Four members of the expected
10-member board will have been added after the accidents.
Boeing's board has faced scrutiny from investors and U.S.
lawmakers ever since two of its 737 MAX jets crashed in October
2018 and March 2019, claiming 346 lives. A year ago, the board
added two new directors with safety and engineering experience as
two longtime members stepped down. Since the accidents, Boeing's
board has also added a permanent safety committee and split the
roles of chairman and chief executive.
The accidents led to a nearly two-year grounding of the aircraft
before U.S. regulators approved it to resume passenger flights late
last year. The MAX crisis, which Boeing has estimated will cost it
about $20 billion, has since been compounded by the Covid-19
pandemic's blow to global air travel and demand for new commercial
jetliners.
Current and former Boeing directors and executives during the
MAX crisis are facing a shareholders' lawsuit that alleges lax
board oversight between the crashes and their aftermath.
The suit, filed in Delaware's Court of Chancery, cites internal
Boeing documents and in part claims the company's board failed to
challenge then-CEO Dennis Muilenburg on the 737 MAX's safety. It
also alleges current CEO David Calhoun later exaggerated to
journalists the extent of the board's oversight between and in the
wake of the two accidents.
The company is seeking to dismiss the lawsuit, saying it lacks
merit and "presents a misleading and incomplete picture" of
Boeing's actions and the board's oversight. Boeing has said the
lawsuit predictably provides a distorted account of Mr. Calhoun's
interviews, saying the board's extensive and active oversight was
accurately explained during those media interviews.
Boeing's board is composed of recently added and long-serving
directors. Mr. Calhoun has been a director since 2009 before
becoming CEO early last year. Boeing's chairman is former airline
executive Larry Kellner, who has been on the board since 2011.
A year ago, Boeing added Akhil Johri, former finance chief at
aerospace manufacturer United Technologies Corp., and Steven
Mollenkopf, chief executive of chip maker Qualcomm Inc. They
succeeded longtime directors who stepped down.
Since then, former U.S. ambassador Caroline Kennedy, a director
since 2017, stepped down. She was succeeded by Lynne Doughtie, head
of auditing firm KPMG's U.S. operation. Retired Navy Admiral John
Richardson was named to the board in October 2019.
Two proxy advisory firms last year raised questions about board
members' oversight and recommended shareholders vote against some
Boeing directors to protest their handling of the MAX crisis. At
last year's annual meeting, five board members faced substantial
opposition, but overall won a majority in the shareholders'
election.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Emily Glazer
at emily.glazer@wsj.com
(END) Dow Jones Newswires
February 17, 2021 15:55 ET (20:55 GMT)
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