Tagged: Boeing safety scandal

Boeing’s Board Governance Failures and the 737 MAX Safety Scandal (Part III of IV)

In its decision, the Chancery Court methodically analyzed the weaknesses in Boeing’s board processes and its fundamental failure to meet basic Caremark standards in tackling airplane safety issues, particularly after the Lion Air crash in 2018. First, the Board did not implement or prioritize safety oversight at the “highest level of the corporate pyramid.”  None of Boeing’s Board committees were specifically assigned responsibility for overseeing...

The Delaware Court’s Decision Highlights Boeing’s Defective Corporate Culture and Board Governance Failures (Part II of IV)

When considered in light of the Chancery Court’s decision, DOJ’s essential findings in its Boeing investigation are problematic at best.  The Chancery Court’s decision outlines how Boeing’s culture of safety deteriorated into a culture of cost-cutting and profits, while under supervision of a board with star-studded credentials.  The Delaware Court’s decision provides a perfect example of how weak corporate governance can have a direct and...

Delaware Court Rejects Motion to Dismiss Lawsuit Against Boeing Board Members for Failure to Conduct Proper Compliance Oversight (Part III of III)

The Delaware Chancery Court is continuing its trend of permitting Caremark claims against corporate board members who fail to exercise proper oversight and monitoring of compliance programs.  The Delaware Court’s latest decision involving the Boeing board and its failure to conduct proper oversight of the 737 MAX safety scandal is yet another example.  At bottom, the Chancery Court is raising the stakes on board member...

Boeing Technical Pilot Indicted for Fraud in 737 MAX Scandal (Part I of III)

The Justice Department announced the indictment of Mark Forkner, a former Chief Technical Pilot for Boeing for his role in the 737 MAX scandal.  Specifically, Forkner is charged with deceiving the FAA’s Aircraft Evaluation Group (“FAA AEG”) relating to Boeing’s 737 MAX airplane and defrauding Boeings U.S.-based airline customers to earn millions of dollars for Boeing. Boeing’s 737 MAX scandal is tragic and disturbing. In...

Episode 187 — Review of DOJ’s Settlement with Boeing for the 737 MAX Safety Scandal

Boeing’s long and tragic scandal surrounding its 737 MAX safety concerns and FAA disclosure violations has come to an end.  DOJ announced a settlement early this year, on January 7, 2021, which included a three-year deferred prosecution agreement (DPA) in exchange for total payments of $2.5 billion, consisting of: a $243.6 million criminal penalty, $1.77 billion in compensation to its airline customers, and $500 million to establish...

Episode 143 — The Boeing Safety Scandal and the Demise of Boeing’s Corporate Culture

Boeing Airlines was the leader in safety and financial success.  Unfortunately, Boeing has suffered a significant fall from grace as a result of its 737 Max safety record and two devastating crashes in Indonesia and Ethiopia. The Boeing safety scandal has had a devastating impact on Boeing’s performance and uncovered a corporate culture that has been obsessed with financial performance to the detriment of safety...