- A major proxy advisor is urging Boeing investors to require an independent board chairman at the company’s annual meeting on April 29.
- Boeing CEO Dennis Muilenburg currently serves as an independent director of the company’s board.
- ISS says the board needs an independent chairman if it wants to weather the crisis that has seen the 737 Max, its best-selling plane, grounded worldwide for more than a month.
Boeing needs a board chairman independent of the aerospace company’s c-suite if it wants to survive the international crisis that has grounded its best-selling plane for more than a month, a major shareholder advisor is warning.
Institutional Shareholder Services, or ISS, urged investors earlier this month to vote against CEO Dennis Muilenburg’s reinstatement as executive chairman and instead opt for an independent board chairman at the company’s annual meeting on April 29.
“Support is warranted for the proposed policy to require an independent board chair, as shareholders would benefit from the most robust form of independent oversight to ensure that the company’s management is able to regain the confidence of regulators, customers and other key stakeholders,” the proxy advisor said in a report.
The push to replace Muilenburg with an independent director was first reported by the Financial Times, which noted that another proxy advisor, Glass Lewis, was urging investors to remove the head of Boeing’s audited committee from his post.
ISS says that in 2018, when a similar issue surfaced, the motion wasn’t warranted. Now, however, two deadly crashes of the Boeing 737 Max and federal investigations into how the plane was certified to fly in the first place, have raised the cause for concern, ISS said.
“Serious concerns have been raised about Boeing’s actions (or inactions) related to the development, certification and marketing of the 737 Max, a product which is critical to the company’s financial performance,” it said in the report. “One need not accept at face value all of the allegations made in the media, or by members of the U.S. Congress, to acknowledge that the company faces serious challenges in regaining the confidence of regulators, airlines, pilots and passengers worldwide.”
Boeing has recommended that shareholders vote against the proposal to institute an independent board chairman.
More on Boeing’s 737 Max crisis:
- Boeing can’t deliver the 737 Max to customers, and now the planes are clogging up its storage lots
- ‘If I were Boeing, I would FIX the Boeing 737 MAX’: Trump offered his advice to the troubled aviation giant after 2 deadly crashes
- Boeing’s problems are mounting and things are going to get worse before they get better
- Boeing’s CEO says the weeks since the second crash of a 737 Max plane have been the ‘most devastating’ of his career