Boeing Has a Top-Heavy Problem

However, the top-heavy problem is not physical, as in the angle of attack on the 737 MAX or door panels falling form the skies.  Its top-heavy problem is with its executives.  They have ethical tin ears.

The most recent issue is the company recording executives’ personal company jet travel as business expenses. That personal travel is income to the executives and not a travel expense for Boeing.

Boeing has corrected the “accounting error” in an SEC filing.  That disclosure came after the Wall Street Journal raised questions about the executives’ use of Boeing’s private jet fleet. Andrew Rangel and Mark Maremont, “Boeing Eases Office Return for Senior Executives,” Wall Street Journal, September 12, 2023, p. A1. Andrew Rangel and Mark Maremont, “Boeing Didn’t Disclose All Executive Jet Perks,”  Wall Street Journal,  April 12, 2024, p. A4.

In fairness to Boeing, one can understand the confusion.  The executives live all over the country and then commute when they have to come into the office. In one case, Boeing actually set up an office near CFO  Brian West’s home in Connecticut so that he did not have to commute to an office so far away. Arlington, Virginia is not that far — is even in the same time zone!

Boeing has office in Arlington, Virginia (that resulted when the company HQs were changed from Chicago to the DC area).  Meanwhile, outgoing CEO Calhoun has homes in New Hampshire and South Carolina. But he zigzagged from Arlington, VA to Hilton Head, SC to Monterey, CA and then back to New Hampshire.  Mr. Calhoun noted in 2023 that Boeing headquarters is wherever he and Brian West are.

Is it any wonder the accounting on personal vs. business flights got jumbled?  The Barometer’s question is, “When do these guys actually work?” And all of this was going on as Boeing was ordering employees back to the office.  And it is a little difficult for those assembling airplanes to work from home. Perhaps the missing bolts from the ejected door panel can be found while at a machinist’s home who tried the work-from-home approach.

The executives at Boeing have tin ears on ethics and perception.  Jetting around the country and living away from plants and headquarters means an absence of leadership. You can’t build a culture via Zoom.

And a culture of integrity cannot exist when the executives are abusing the company’s private jet use. Boeing needs to start at the top for its clean-up. For replacements consider someone who will leave near the factories so that there is hands-on leadership shaping a culture of safety, quality, and ethics.  Oddly enough, you can’t do that from an airplane.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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