April 12, 2021, © Leeham News: Boeing’s annual shareholders’ meeting is April 20.
The entire Board of Directors is up for election. Boeing sets terms for one year. In theory, this prevents entrenchment. In Boeing’s case, Board members historically are reelected year after year after year.
There are several members who were appointed after the 737 MAX crisis. Still, there are major gaps in the Board’s makeup.
No member of the Board represents the biggest single source of revenue and profits: commercial aerospace.
Although Boeing CEO David Calhoun at one point was employed by GE and rotated through its aviation division, he’s so far removed from this era that one can argue he’s not truly a commercial aviation resource. He hasn’t been with GE since 2006. Calhoun has been a Boeing director since 2009.
Robert Bradway is chairman and CEO of Amgen, a biotech firm. He’s been a director since 2016.
Arthur Collins is a senior advisor to Oak Hill Capital Partners since 2009. Before that, he was CEO of Medtronic, a medical device company. He’s been a Boeing director since 2007.
Lynne Doughtie was named a Boeing director in 2021, She’s the former CEO of the accounting firm KPMG.
Edmund Giambastiani is president of his own company. He was formerly Vice Chairman of the Joint Chiefs of Staff and held various commands in the Navy. He’s trained in nuclear submarines. After the MAX grounding, he was named to a Board committee conducting an internal investigation into the safety of the MAX. He is chair of the Board’s new Aerospace Safety committee. He’s been a director since 2009.
Lynn Good is chairman, president and CEO of Duke Energy Corp. She’s been a director since 2015.
Akhil Johri was named a director in 2020. He’s Operating Advisor to Clayton, Dubilier & Rice, a private equity firm. He previously worked for United Technologies (2009-2020), a supplier to Boeing Commercial Airplanes and Boeing Defense. His background at UTC, however, is as CFO through various divisions, not in the supply chain.
Lawrence Keller is chairman of the Board. He’s president of Emerald Creek Group, a private equity firm. He previously was president or chairman of Continental Airlines. He’s been a director since 2011.
Steven Mollenkopf was named to the Board in 2020. He retired as CEO of Qualcomm, a computer, software, and technology company.
John Richardson is another retired US Navy Admiral with nuclear propulsion background. He was named to the Boeing Board in 2019.
Susan Schwab is a professor emerita from the University of Maryland. Her background includes service as the US Trade Representative in the Bush 43 presidency. She’s been a director since 2010.
Ronald Williams is chairman and CEO of RW2 Enterprises, his own consulting strategic management company. He previously spent 25 years in the health insurance industry. He’s been on Board’s Board since 2010.
The Board’s representation is solid in defense, finance, and politics. But remarkably, it continues to lack representation for commercial aviation, unless one counts Kellner. But his background is airlines, not airliner production.
During the MAX crisis, Boeing was roundly criticized for having no engineers on the Board. This isn’t strictly true. In its Proxy statement for the shareholders meeting, Boeing points out that seven of its Board members are engineers. However, none is an engineer in aviation.
As I’ve pointed out previously, Boeing should appoint people of the stature and background of Chesley Sullenberger (pilot and safety advocate) or John Cox (safety investigator). Appointing representatives of the IAM 751 (touch labor/production) or SPEEA (engineers union) to the Board would also be a good idea. This was also a non-starter, given Boeing’s anti-union bias. But the knowledge and expertise would be valuable to a Board that doesn’t have this commercial/production experience.
I’m under no illusions that anything to correct these deficiencies will come out of the annual meeting.
Boeing’s Board has been and will remain a “good old boys” club (pardon the sexist cliché here).