Boeing board let CEO mislead on 737 Max crashes, suit says

Boeing directors, including current CEO David Calhoun, lied about the company’s oversight of its 737 Max 8 airliner and participated in a misleading public-relations campaign following two fatal crashes involving the plane, shareholders claim. The board ignored red flags about the 737 Max, didn’t develop its own tools to evaluate safety and didn’t properly hold former chief executive officer Dennis Muilenburg accountable for launching a lobbying and public-relations effort to push back against criticism of the plane’s design flaws, according to recently unsealed court filings. “Prior to the grounding of the 737 Max, the board failed to undertake its own evaluation of the safety of keeping the 737 Max aloft,” investors said in an amended Delaware Chancery Court complaint that was made public Feb. 5. The board then “compounded its lack of oversight by publicly lying about it.” The unsealed filings, first reported by the Wall Street Journal, are part of a derivative suit first filed in 2019 by Boeing shareholders after Lion Air and Ethiopian Air 737 Max crashes claimed a total of 346 lives. Unlike in shareholder class actions, judgments or settlements in derivative suits are usually paid back to the company from liability insurance policies for its directors and officers. The amended complaint makes public for the first time details about Boeing’s internal handling of the 737 Max debacle, which led to a two-year grounding of the planes. Delaware Chancery Court Judge Morgan Zurn agreed to make the suit’s details public after concluding the “public interest” in the board’s handling of the 737 Max fiasco “favors disclosure.” Story has more.<br/>