Boeing Needs A New Board, Too
Boeing Co. (BA ) is in trouble again. Yet another scandal is sweeping through the company, forcing its second chief executive out of office in 15 months and setting off a fierce internal battle for power. The same board of directors that has overseen Boeing through years of ethical and sexual misconduct is now choosing another CEO. At the very least, the board should strongly consider going outside the company to bring in someone who can clean up Boeing's troubled corporate culture and end the constant, brutal, bureaucratic infighting. The board might consider replacing much of itself as well. It has done a rather poor job of watching out for shareholders' long-term interests.
Look at the record. Airbus has pushed Boeing aside for the No. 1 spot in the commercial jet market. A series of legal problems in Washington has sullied Boeing's name in Congress and cost the company billions in potential government military contracts. Boeing employees used documents from rival Lockheed Martin Corp. to win a contract for launching military rockets (LMT ). This led to a 20-month ban on Boeing bidding for future launches. The ban was lifted just days before the latest scandal erupted. Boeing still faces probes on other launch contracts with NASA. And the company is still dealing with a violation of federal conflict-of-interest laws that led to the cancellation of a multibillion tanker refueling deal. Chief Financial Officer Michael Sears lost his job, pled guilty to criminal charges, and was sentenced to prison.
Before he was fired, Stonecipher managed to stabilize the company and repair its image in Washington. But Boeing's problems run deep. An outside CEO and a new board should return it to its straight-arrow engineering roots.