Boeing Quietly Split CEO, Chairman Roles After Investor Vote
The board will now elect a chairman from among the independent directors each year following the shareholder meeting.
(Bloomberg) -- Boeing Co.’s board quietly separated the chairman and chief executive officer roles earlier this year, after a majority of shareholders bucked management and supported a permanent split of those positions in a nonbinding vote at the company’s annual meeting.
Under the new policy, which is detailed in a statement on Boeing’s website but hasn’t been widely publicized, the board will elect a chairman from among the independent directors each year following the shareholder meeting. If that chairman leaves the board or joins the company’s executive ranks, a new leader will be picked from the remaining independent directors.
The board had resisted calls to require an independent chairman even after installing an outsider, Larry Kellner, in the role after a management shake-up late last year. Directors stripped Dennis Muilenburg of his chairman’s title in October 2019 before ousting him as CEO two months later for botching the response to two fatal crashes of the company’s 737 Max jet. The accidents killed 346 people.
The change in the board’s leadership structure was spelled out in a statement of corporate governance principles dated June 22. It came to light this month when shareholder activist John Chevedden, the author of the original proposal to require an independent chairman, submitted a follow-up measure to Boeing.
Chevedden’s proposal garnered 52% of shareholder votes at Boeing’s April 27 meeting despite being opposed by management, which argued that such a policy would crimp the company’s future flexibility. Chevedden said by email that he hasn’t decided whether he will withdraw his proposal for 2021.
A Boeing spokesman pointed to Kellner’s comment to investors in April following the vote.
“We’ll continue to use your feedback to inform decision-making going forward,” the chairman said at the time. “I thank the shareholders for their input and the ongoing dialog we have with them.”
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