The Boeing 737 Max crisis calls for a corporate upheaval

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ISS and Glass Lewis, leading research firms advising investors on how to vote on proxy matters, support a resolution that separates CEO and Chairman positions. Both jobs are currently held by Dennis Muilenburg. The vote will take place at the annual meeting on April 29 in Chicago.
The note to investors on the ISS specifically mentions the two fatal accidents of the 737 Max and the damage to Boeing's reputation caused by aircraft problems.

"Shareholders would benefit from the most robust form of independent control to ensure that the company's management is able to regain the trust of regulators, customers and other key stakeholders," notes ISS. .

Glass Lewis recommended a vote in favor of the resolution, citing his belief that shareholders are almost always better off if the two positions are separated. The question of 737 Max was not mentioned in the discussion of this resolution.
Boeing CEO says new software update has been tested by most 737 Max customers
Glass Lewis recommends shareholders to vote against one of the directors, Lawrence Kellner, because of his position as chairman of the board's audit committee. Kellner and the board should have better oversight of Boeing's management as the 737 Max was developed and the crisis unfolded.

"The incidents have already had a significant negative impact on the company's sales and reputation," said Glass Lewis in his note. "Given the loss of life resulting from accidents, damage to the company's reputation and the negative impact on future sales of the aircraft, we believe that these incidents indicate a possible failure of the aircraft. supervision by the board of directors of risk management. "

The consulting firm stated that in his opinion, the audit committee should have played a more proactive role in identifying the risks associated with the 737 Max.

Boeing (BA) opposes the resolution to split the positions of president and CEO and recommends votes for all current directors, including Kellner.

Earlier this month, Muilenburg announced the formation of a new committee of independent directors to review policies and processes for aircraft design and development. He said the committee would recommend improvements to the company's procedures.

The resolution to split Boeing's CEO and Boeing Board positions was made well before the second crash of a 737 Max jet on March 10th. A similar resolution was proposed to shareholders a year ago. He was defeated with the support of only 25% of the company's stock at that time.

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