Two Boeing Directors to Step Down From Board--3rd Update
February 17 2021 - 6:32PM
Dow Jones News
By Andrew Tangel and Emily Glazer
Boeing Co. said two longtime directors would step down as the
aerospace giant's board undergoes more changes in the wake of the
737 MAX crisis.
The Chicago-based plane maker said Wednesday that Susan Schwab
and Arthur Collins would retire from the board and not stand for
reelection at Boeing's annual shareholder meeting April 20. The
company didn't immediately announce the nomination of new directors
for the board.
Mr. Collins, who once led 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
Wall Street Journal reported the planned departures earlier
Wednesday.
"Boeing has benefited enormously from their committed and
dedicated service," Chairman Larry Kellner said in a statement.
The departures have been under consideration in recent weeks and
are part of an effort following the MAX crisis to bring people with
fresh perspectives onto the board, people familiar with the matter
said.
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,
replacing two longtime members. Since the accidents, Boeing's board
has also created a permanent safety committee and split the roles
of chairman and chief executive.
The accidents led to a nearly two-year grounding of the 737 MAX
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 and the blow it dealt to global air travel and demand for
new passenger jets.
Current and former Boeing directors and executives during the
MAX crisis are facing a shareholders' lawsuit that alleges lax
board oversight as developments about the crashes unfolded. 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 chief David Calhoun later exaggerated to
journalists the extent of the board's oversight between the two
accidents as well as after.
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 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 a mix of long-serving directors and fairly
recent additions. Mr. Calhoun, who became CEO early last year, has
been a Boeing director since 2009. Mr. Kellner, a former airline
executive, joined the board in 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.
Since then, former U.S. Ambassador Caroline Kennedy, a director
since 2017, has stepped down. She was succeeded by Lynne Doughtie,
head of auditing firm KPMG's U.S. operation. John Richardson, a
retired Navy admiral, 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. Among
the five board members who faced substantial opposition at last
year's annual meeting, Ms. Schwab and Mr. Collins secured backing
from less than 60% of votes cast. They and the other directors
overall won a majority in the shareholders' election.
Ms. Schwab has served on other corporate boards alongside fellow
Boeing directors. She sits on the board of machinery maker
Caterpillar Inc., where Mr. Calhoun is presiding director,
according to a securities filing. Mr. Muilenburg previously served
on Caterpillar's board before his ouster as Boeing CEO in late
2019. Ms. Schwab also sits on the Marriott International Inc. board
with Mr. Kellner, who is the hotel company's lead director.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Emily Glazer
at emily.glazer@wsj.com
(END) Dow Jones Newswires
February 17, 2021 18:17 ET (23:17 GMT)
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