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Scrutiny intensifies on Boeing board after 737 MAX crashes

Boeing’s board of directors is under increased scrutiny for its oversight of the planemaker ahead of two 737 MAX crashes that killed 346 people.

Dennis Muilenburg and other current and former Boeing officials are defendants in a lawsuit focusing on the board's role in 737 MAX disasters
Dennis Muilenburg and other current and former Boeing officials are defendants in a lawsuit focusing on the board’s role in 737 MAX disasters

Nearly two dozen current and former Boeing officials and board members are named in a recent lawsuit that depicts the board as passive toward operational problems on earlier Boeing models and overly trusting of former chief executive Dennis Muilenburg’s explanations for the disasters.

The board, including Muilenburg’s successor David Calhoun, ignored “serious safety-related red flags,” resulting in an “epochal corporate governance catastrophe,” said the suit, which was filed in June in a Delaware court and spotlighted in a Wall Street Journal article on Friday.

“This lawsuit was necessitated by the board’s and top executives’ abrogation of their duty to protect the company and its shareholders,” said New York state Comptroller Thomas DiNapoli, a plaintiff.

“This litigation is critical to Boeing restoring confidence in its operations, accepting responsibility for its misconduct, and shoring up its financial standing.”

Boeing said it will fight the suit.

“As one might expect of a filing by plaintiffs in a lawsuit like this, the complaint presents a one-sided and misleading picture of the activities of Boeing and its Board during this period of time,” a company spokesman said. “We believe the plaintiffs’ claims lack merit, and will seek to dismiss the lawsuit later this year.”

Attention on the suit comes as Boeing appears poised to soon receive long-delayed approval from regulators for the 737 MAX to return to the air.

The head of the European Aviation Safety Agency said Friday he hopes to return the MAX to service by the end of the year.

The MAX disaster has badly dented Boeing’s financial performance and reputation. A congressional report earlier this month said the accidents were the “horrific culmination” of faulty Boeing engineering and weak FAA oversight.

The suit against the board, much of which is redacted, includes a lengthy section on Muilenburg’s interactions with the board recounting the period just after the first fatal crash in October 2018.

“Following the Lion Air crash, the Board did not take any steps to investigate Boeing’s safety-reporting structure, or implement a Board-level system of safety monitoring at Boeing,” the suit said. “Nor did the Boeing seek to understand the cause of the Lion Air crash. AFP