Boeing's Corporate Governance Crisis
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Case Details:
Case Code : CGOX003
Case Length : 9 Pages
Period : 2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Boeing
Industry : Aerospace
Countries : Global
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Introduction
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Towards the end of 2003, Boeing, the famous aerospace company found itself in the midst of a highly publicized scandal. On Dec. 2, the Pentagon postponed action on the $18 billion Air Force deal to acquire 100 Boeing 767 tankers. The Justice Dept., two investigative branches of the Defense Dept., and the Senate Armed Services Committee were investigating allegations that Boeing had acted improperly, in an effort to win two multibillion-dollar aerospace defense contracts.
A second scandal, dating from 1998, involved the possession of 35,000 pages of
competitor, Lockheed Martin's documents during the 1998 bidding for a military
rocket-launch contract.
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The Pentagon indefinitely suspended Boeing from bidding on
future rocket contracts pending a review of its ethical practices. Lockheed
Martin sued Boeing over the alleged document theft. For some time it looked as
though CEO Philip Condit had been able to pinpoint the blame on some senior
executives, who resigned.
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But later, Condit himself submitted his resignation. After Condit resigned, the board appointed Harry Stonecipher, 67, as the new CEO. Stonecipher had served for five years as Condit's No. 2 after Boeing acquired McDonnell Douglas.
At the same time, the board named director Lewis.E.Platt, the former chairman of Hewlett-Packard Co., as non-executive chairman.
About Boeing
The Boeing Company (Boeing) was the world's largest aerospace company. Boeing had two major segments: Commercial Airplanes and Integrated Defense Systems... |
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