Boeing Board unaware of Max 8 problems
Boeing espoused the phrase “SMS” which might have detected issues
Boeing added technical talent while Archer has a good start
One of the lessons of the Max 8 debacle is that safety leadership, culture and management systems cannot be just words, but an all abiding focus on risk reduction at all levels of an organization. Employing hindsight, the Los Angeles Times commented:
“ The crashes have been attributed to slipshod engineering, irresponsible cost-cutting and sweetheart arrangements with government regulators — all aspects of management that fall within the board’s jurisdiction.
The most striking indication of the board’s dereliction of duty isn’t that the crashes and their underlying factors occurred in the first place, but that the directors didn’t leap into action after the first crash, in October 2018, or immediately after the second, in March. That suggests that the Boeing board didn’t view its responsibilities as extending beyond the company’s bottom line to its other stakeholders — including the airlines as its direct clients and the flying public as its ultimate customers.”
Looking at the composition of the 2019 Board, other than its then CEO, President and Director Dennis Muilenburg, no one had any engineering experience to the level needed to ask the tough technical questions. As the Washington Post reported:
“Before approving plans for a new jetliner called the 737 Max, Boeing’s board of directors discussed how quickly and cheaply it could be built to compete with a rival — but the members didn’t ask detailed questions about the airplane’s safety, according to three people present for the meetings.
“Safety was just a given,” said one former board member, speaking on the condition of anonymity because the 2010 discussions were confidential.”
Boeing in 2019 voluntarily participated in SMS, a state-of-the-art discipline designed to and effectively shown to identify risks. If the Board had the capability to participate in this program, the level of scrutiny would have been raised.
The trail from November 2019 to March 2020 shows the lack of insight
With a new CEO, David Calhoun, Boeing started to increase the technical strengths of its Board and to take deeper assessments of its certification practices:
Recently, the aircraft manufacturer elected someone who has the experience and education needed to infuse an SMS culture from the Board down:
Boeing Elects David L. Joyce to Board of Directors; Admiral Edmund P. Giambastiani Jr. to Retire from Board–
A 40-year GE veteran, Joyce joined GE Aviation in 1980 as a product engineer and spent 15 years designing and developing GE’s commercial and military engines, before serving in a variety of leadership positions in GE Aviation, including vice president and general manager of Commercial Engines. Joyce earned both a Bachelor of Science and master’s degree in mechanical engineering from Michigan State University and holds a master’s in business finance from Xavier University.
“David Joyce is a recognized aerospace industry leader who brings a demonstrated track record of safety leadership, engineering expertise and operational excellence to our board,” said Boeing Chairman Larry Kellner. “He will provide valuable counsel and guidance based on his significant experience.”
Joyce is a member of the National Academy of Engineering, and is the recipient of the National Defense Industrial Association’s James Forrestal Industry Leadership Award and the American Society of Materials’ Medal for the Advancement of Research. Since 2010, he has served on the Board of Trustees of Xavier University.
“Boeing will benefit from David Joyce’s deep aviation experience and broad industry relationships,” said David Calhoun, Boeing president and CEO, and member of the board of directors. “David’s experience transforming businesses and focus on quality and safety in the aerospace industry will further strengthen our board.”
This Boeing journey follows the advice of experts who consult with Boards: (link)
“Why is board recruitment so important…and so challenging? Because the job of building a board is about more than just filling slots. It is about finding leaders who have skill sets and perspectives that align with your organization’s strategies, goals, and needs — not just now, but into the future. And it’s not just about recruiting one great individual; it’s about having the right blend of skill sets, expertise, community connections, and diverse perspectives and spheres of influence across the board as a whole — which takes some discipline and planning to determine.”
“I always suggest that boards spend time answering this question as the first step: “Knowing what kinds of issues we are going to be facing in the coming years, what kinds of experience, skills and abilities are we going to need around the board table?”
Archer Aviation Inc. (“Archer” ), a leading Urban Air Mobility company and developer of all-electric vertical take-off and landing (“eVTOL”) aircraft, and Atlas Crest Investment Corp seem to have started off with a right composition of its Board.
Deborah Diaz served as the CTO and deputy CIO of the National Aeronautics and Space Administration (“NASA”) from 2009 to 2016, where she was responsible for NASA’s global system infrastructure, risk management, financial and regulatory stewardship, innovation and technology infusion. Since leaving NASA in 2016, she has served as CEO and VC Advisor of Catalyst ADV, a strategic growth advisory firm specializing in large-scale business transformation, developing new business markets and strategic partnerships. Previously, Ms. Diaz also held executive leadership roles at the United States Patent and Trademark Office and the U.S. Department of Homeland Security. We believe that Ms. Diaz’s decades of senior level international business experience, coupled with her public corporate board and advisory board director experiences with Primis Financial, Section, Intel, Dell, Equinix and many others in the private sector and in government, will add significantly to Archer’s roadmap towards their full commercializing of eVTOL aircraft.
Maria Pinelli led Ernst & Young LLP’s (“EY”) Consumer Products and Retail sector based in the U.S. Southeast from 2017 until the end of 2020. Prior to this role, Ms. Pinelli was a Global Vice Chair of EY from 2011 to 2017 and led EY’s Global Strategic Growth Business unit with a focus on serving entrepreneurs and private and public companies poised for exponential growth. During this period, she was also EY’s Global IPO Leader consulting to clients preparing for the pre and post journey. Prior to leading this global business of EY, Ms. Pinelli was EY’s America’s director of strategic growth markets from 2006 to 2011. In this role, Ms. Pinelli led a team of over 5,000 professionals serving high growth private, public and private-equity backed businesses. Ms. Pinelli currently serves on the board of directors of Globant S.A. As Archer scales its operations, Ms. Pinelli’s international business experience, financial expertise and her extensive experience in advising growth companies will serve as an asset to Archer’s management team.
Fred Diaz served as President & CEO and Chairman of the Board of Mitsubishi Motors North America from April 2018 to April 2020. Prior to such role, Mr. Diaz served as General Manager in Charge of Performance Optimization Global Marketing and Sales of Mitsubishi Motors Corporation in Japan, from July 2017 to April 2018. From April 2013 to July 2017, Mr. Diaz served in a number of executive roles for Nissan Motor Corporation, including Division Vice President & General Manager of North American Trucks and Light Commercial Vehicles and Sr. Vice President Sales & Marketing and Operations. Mr. Diaz also served in several roles for Fiat Chrysler Automobiles from 2004 to 2013, including President and CEO Ram Truck Brand and President and CEO Chrysler Mexico. Mr. Diaz currently serves as a director of Site One Landscapes (formerly John Deere Landscapes), a publicly traded company. Mr. Diaz’s extensive experience in operations management, sales, and marketing in the automotive transportation industry bring significant value as Archer prepares to scale customer operations ahead of the expected launch of commercial operations in 2024.
The nomination of Oscar Munoz to the post-closing board of directors was announced last week. Mr. Munoz, a seasoned aviation executive, served as CEO of United Airlines (“United”) from 2015 to 2020 and led the company’s board as Executive Chairman from 2020 until retiring in May 2021. During his tenure, United earned recognition for innovation and customer service, earning trust with employees and leading the industry toward a sustainable aviation future. Before joining United’s executive team, Mr. Munoz served in several roles at CSX Corporation from 2003 to 2015, including President, COO, and CFO. He has also held senior leadership roles at AT&T, U.S. West and The Coca-Cola Company and PepsiCo. Prior to becoming CEO, Mr. Munoz served on the board of directors of United Airlines’ parent company, United Continental Holdings, having earlier joined the board of Continental Airlines in 2004. Mr. Munoz’s experience in management and finance working for well-known consumer and airline brands positions Mr. Munoz to advise Archer’s team as they scale globally.
Archer might well set up a Board seminar on System Safety Management and the need that this discipline emanate from the Board team. Boeing’s lessons likely will convince these busy professionals that the education would be a valuable use of their time.
 Lynn Good, CEO of Duke Energy; Robert Bradway, CEO of biotech giant Amgen; and the former chiefs of Allstate, Medtronic, Aetna and Nortel. Caroline Kennedy, former Ambassador to Japan and Gov. Nikki Haley.
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