CHICAGO • Boeing Co should eventually appoint an independent director to lead its board rather than concentrating power in the hands of the CEO, two leading shareholder-advisory firms said.
Investors would benefit from stepped-up board oversight given the damage to Boeing’s reputation and market value after two fatal crashes of its 737 Max jetliner, Institutional Shareholder Services (ISS) said on Tuesday. Glass Lewis echoed the concerns ahead of Boeing’s AGM on April 29.
But the shareholder advocates stopped short of calling for the planemaker to strip power from current CEO Dennis Muilenburg (picture). Rather, they urged investors to support a non-binding proposal that would give Boeing directors the “discretion to phase in this policy” in the next leadership transition.
Any missteps by Boeing in resolving the issues, or lapses with future aircraft programmes, “could have a devastating impact on the company’s business prospects, its brand and its reputation, for years,” ISS said.
“Shareholders would benefit from the most robust form of independent board oversight, in the form of an independent board chair.”
Glass Lewis singled out the Boeing board’s audit committee for not taking “a more proactive role in identifying the risks associated with the 737 Max 8 aircraft”.
The accidents, loss of lives and damage to Boeing’s reputation “indicate a potential lapse in the board’s oversight of risk management”, Glass Lewis said in the report. — Bloomberg