Boeing’s Board Needs Overhaul, Not Rejiggering
The two new directors announced this week are solid choices, but more needs to be done to ensure responsible oversight.
Modest board changes may may not be enough to address the changes needed at Boeing.
Photographer: SeongJoon Cho/BloombergWhen Boeing Co. CEO David Calhoun was asked last month how he would fix the 737 Max crisis as a long-time insider, he bristled at the label, telling reporters, “I watched the same movie you did.” Calhoun, of course, was hardly just an observer, or shouldn’t have been: He has been a director at the company since 2009. A pair of board changes announced on Monday should be viewed in that context. The rejiggering is fine, but ultimately just a Band-Aid over the bigger question of the board’s accountability for one of the ugliest period’s in the company’s history.
Boeing directors Edward Liddy – the former CEO of Allstate Corp. and an interim leader at American International Group Inc. during the financial crisis — and Michael Zafirovski, a former General Electric Co. executive and an adviser to Blackstone Group Inc., will step down. Zafirovski was Boeing’s longest-serving director at more than 15 years, while Liddy has been on the board since 2010 following an earlier stint that was disrupted by his appointment at AIG. Neither had direct experience in commercial-aerospace development. They will be replaced by Qualcomm Inc. CEO Steve Mollenkopf and former United Technologies Corp. CFO Akhil Johri. Mollenkopf’s engineering degree fits with Boeing’s pledge to staff its board with that kind of expertise amid criticism that it lost sight of technical priorities in the pursuit of ever-higher profits. Johri brings the perspective of someone who’s been on the other side of Boeing’s aggressive stance toward its suppliers and could be an asset in healing those relationships.