|How has the company responded to its most recent crisis? What failures led to the crisis, how has the company assessed accountability, and what steps has the company taken to strengthen governance and oversight to both resolve the crisis and mitigate the risk of recurrence?|
|The Boeing Company||2020||US||Vote Bulletin||https://www.blackrock.com/corporate/literature/press-release/blk-vote-bulletin-boeing-apr-2020.pdf|
BIS has had a long history of engagement with the company; over the last year, our conversations have focused on board oversight, risk mitigation, and remediation of the 737 MAX crisis. We expect continued scrutiny on the company’s overall governance because of past handling of this crisis.
Preliminary investigative findings issued by U.S. House Committee on Transportation and Infrastructure (the House Report) 1 on March 6, 2020 called the MCAS a “key contributing factor” to the two fatal accidents. The report also identified several central themes from the accidents, including a problematic “culture of concealment” that led Boeing to withhold crucial information from pilots, airlines, and the Federal Airline Association (FAA) and downplay safety precautions.
Since the crisis, changes have been made to the board and senior management, including the addition of three new board members, a new CEO, and a new independent non-executive chair of the board. In addition to the board and management changes, a series of structural changes were made to emphasize central reporting and enhanced focus on safety and design, including a permanent safety oversight committee of the board.
We will continue to engage with the company and monitor developments on its business oversight, risk mitigation, remediation of the 737 MAX crisis, and corporate conduct and culture.
- Management Proposal
- Election of Directors
- Failure to exercise sufficient oversight of management strategy and corporate culture, which contributed to the fatal 737 MAX crashes
These directors were on the board at the time of the strategic decision to amend the 737 to the 737 MAX in August 2011. While the company has created oversight structures that aim to mitigate risks that resulted in the 737 MAX crisis, BlackRock is holding these directors accountable for board decisions that had significant adverse, material impact on the company and, consequently, its shareholders. BlackRock believes that voting against these directors is warranted for the aforementioned reasons, and that doing so may help to promote a culture of accountability at the board level.