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Boeing - What Has Been Done - and Will That Be Enough - CGLytics
Boeing - What Has Been Done - and Will That Be Enough - CGLytics
Home | Blog | Boeing: What Has Been Done? And Will That Be Enough?
2
Looking for corporate governance
This article examines Boeing’s corporate governance practices and current expertise on the board. This raises the question if recent changes will really be enough
data? to
sharpen Boeing’s focus on product and safety going forward.
Disaster strikes
Following the horri c plane crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 in October 2018 and March 2019, a mounting crisis faces Boeing. As a result,
Boeing has recently received a fair share of negative publicity, been the subject of investigations and named in lawsuits. Beyond the general public, shareholders and
corporate governance experts are infuriated. They collectively question the effectiveness and transparency of the board and leadership—with good reason.
Various recent studies have shown Boeing’s quality of corporate governance. Findings reveal Beoing ranks near the bottom of all S&P 500 company boards[1]. Even
more interesting is the board’s compensation data.
CGLytics data reveals that of all S&P 500 companies, Boeing ranked 91st out of the 500 with the highest paid non-executive directors; receiving an average of $345,000
per director in 2018.
In addition, new developments at congressional hearings held in October 2019 have revealed that many concerns were warranted. Boeing executives admitted to aws
in the design of its 737 Max. Pilot error was originally thought to be the main cause of the plane crashes, however that sentiment has changed and a “pattern of
deliberate concealment”[2] is now suspected. Instead of pilot error, it is now alleged that insuf cient information provided to the pilots regarding the new changes to the
plane caused these unfortunate results. The Boeing CEO stated at the congressional hearings that, until recently, he was unaware of the apparent issues. It seems
greater oversight and communication was, and is, needed within Boeing, its executives, and the Board.
The board also “amended the company’s Governance Principles to include safety-related experience as one of the criteria it will consider in choosing future directors.”[3]
Following this amendment, the board appointed former Chief of Naval Operations John Richardson, whose prior positions included signi cant safety experience, as a
director. Admiral Richardson, along with Admiral Edmund Giambastiani, appear to be the only director on Boeing’s 14-member board that has safety experience in
aviation. It also does not appear that the board currently contains directors with technical experience in aviation, except for CEO Dennis Muilenburg who was an
engineer for Boeing. This could raise the question whether the board has enough expertise to address, both technical and safety issues, to challenge Muilenburg, who
previously held a dual role as Chairman and CEO of Boeing for over three years.
Would you like to learn more about how, you too, can have instant insights into more than 5,500 globally listed companies’ board composition, diversity, expertise and
skills? Click here to nd out about CGLytics’ boardroom intelligence capabilities and obtain the same insights used by institutional investors and advisors.
[1] https://fortune.com/2019/05/23/boeing-board-governance-experts/
[3] https://investors.boeing.com/investors/investor-news/press-release-details/2019/Boeing-Chairman-President-and-CEO-Dennis-Muilenburg-and-Boeing-Board-of-
Directors-Reaf rm-Companys-Commitment-to-Safety/default.aspx
[4] https://boeing.mediaroom.com/2019-10-11-Boeing-Board-of-Directors-Separates-CEO-and-Chairman-Roles
AGMs: Tactics for a Plague A diverse supervisory board: What’s your avor?
Year This is how to unlock a Companies get a taste of
In a time of crisis and confusion, shareholders are
wealth of talent CEO pay for the proxy season
more eager than ever to get answers from their
Aniel Mahabier, CEO of governance data specialist This article, originally published in Dutch in Mgmt.
boards and management. Yet holding traditional
CGLytics, welcomes the fact that selection Scope, CGLytics examines CEO compensation
AGMs is nearly impossible. What are the best
committees are using corporate governance issues going into the 2020 proxy season
options for running AGMs during a plague year?
analytics to assess the diversity of their own
supervisory board. Technology is bridging the gap
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