Time for Boeing CEO McNerney to Resign; Its Board Should Be Ashamed
Boeing Co. (NYSE: BA) Chairman and Chief Executive Officer W. James (Jim) McNerney Jr. should resign. Or, more likely, the company's board of directors should fire him. McNerney's tenure overlaps the period during which the troubled 787 Dreamliner was designed, built, tested and sold. That means his reign as CEO also overlaps with the dozens of design problems, labor problems and delays that caused the plane to be released two years after the original announced date. It means he has run the company as flaws in the Dreamliner have taken it out of service. This period could last for weeks or even months. Boeing's reputation has been hurt badly in the process, and its future earnings will be as well.
Boeing has tried to burnish McNerney's image as it painted him as the industry's primary leader. Among the awards Boeing points out he has received:
2012 inaugural Turning Point Award from the U.S. Army War College Foundation for leadership that resulted in a strategic turning point for Boeing
2012 Semper Fidelis Award from the Marine Corps Scholarship Foundation for service to the United States that exemplifies the Marine Corps motto to remain "Always Faithful"
2011 John W. Dixon Award from the Association of the U.S. Army for outstanding contributions to national defense
2009 honorary Doctor of Science degree from Cranfield University for his contributions to the international aerospace industry
2008 National Management Association's Executive of the Year
He also "chairs the Business Roundtable, an association of chief executive officers of leading U.S. companies, and is a member of the CEO Fiscal Leadership Council, a non-partisan effort to mobilize support for a comprehensive U.S. federal debt-reduction agreement."
None of these awards and honors matter to Boeing's shareholders or customers. It would be hard to name the CEO of a major U.S. company who has done as much damage to his firm as McNerney has.
Boeing's board should be ashamed, each and every one of them:
David L. Calhoun
Director Since 2009
Chief Executive Officer and Executive Director, Nielsen Holdings. Mr. Calhoun has served as Chief Executive Officer of Nielsen Holdings N.V. (marketing and media information) since May 2010, as Executive Director of Nielsen Holdings N.V. since its initial public offering in January 2011 and as Chairman of the Executive Board and Chief Executive Officer of The Nielsen Company since September 2006. Previously, Mr. Calhoun served as Vice Chairman of General Electric Company and President and Chief Executive Officer of GE Infrastructure. Before that, Mr. Calhoun served as President and Chief Executive Officer of GE Transportation; President and Chief Executive Officer of GE Aircraft Engines; President and Chief Executive Officer of Employers Reinsurance Corporation; President and Chief Executive Officer of GE Lighting; and President and Chief Executive Officer of GE Transportation Systems. Mr. Calhoun also serves on the boards of Caterpillar Inc. and Medtronic, Inc. Mr. Calhoun is a member of the Compensation Committee and the Governance, Organization and Nominating Committee.
Arthur D. Collins Jr.
Director Since 2007
Senior Advisor, Oak Hill Capital Partners; Former Chairman and Chief Executive Officer, Medtronic. Mr. Collins has served since April 2009 as Senior Advisor to Oak Hill Capital Partners (private equity). Previously, he served as Chairman of Medtronic, Inc. (medical device and technology) from April 2002 to August 2008. At Medtronic, Mr. Collins was also Chairman and Chief Executive Officer from April 2002 to August 2007, President and Chief Executive Officer from May 2001 to April 2002, President and Chief Operating Officer from August 1996 to April 2001, Chief Operating Officer from January 1994 to August 1996, and Executive Vice President of Medtronic and President of Medtronic International from June 1992 to January 1994. He was Corporate Vice President of Abbott Laboratories (health care products) from October 1989 to May 1992 and Divisional Vice President of Abbott from May 1984 to October 1989. Mr. Collins also serves on the boards of Alcoa Inc., Cargill, Inc. and U.S. Bancorp. He is a member of the Board of Overseers of The Wharton School at the University of Pennsylvania. Mr. Collins is Chair of the Compensation Committee and a member of the Governance, Organization and Nominating Committee.
Linda Z. Cook
Director Since 2003
Former Executive Director, Royal Dutch Shell. Ms. Cook served as Executive Director of Royal Dutch Shell plc (oil, gas and petroleum) from August 2004 to December 2009 with executive responsibilities for global natural gas, trading and technology. She also served as a member of the Royal Dutch Shell board of directors. Previously, she served as President and Chief Executive Officer and a member of the board of directors of Shell Canada Limited from August 2003 to August 2004. She served as Chief Executive Officer for Shell Gas & Power from January 2000 to July 2003. Ms. Cook also serves on the boards of Cargill, Inc., KBR, Inc. and Marathon Oil Corporation. She is a member of the Society of Petroleum Engineers, the Board of Trustees for the University of Kansas Endowment Association and the Advisory Board for the University of Texas Energy Institute. Ms. Cook is Chair of the Finance Committee and a member of the Audit Committee.
Kenneth M. Duberstein
Director Since 1997
Chairman and Chief Executive Officer, The Duberstein Group. Mr. Duberstein has served as Chairman and Chief Executive Officer of The Duberstein Group (consulting) since 1989. He was White House Chief of Staff from 1988 to 1989. Mr. Duberstein also serves on the boards of Dell Inc., Mack-Cali Realty Corporation and The Travelers Companies, Inc. Mr. Duberstein is the Lead Director, Chair of the Governance, Organization and Nominating Committee and a member of the Compensation Committee.
Admiral Edmund P. Giambastiani, Jr., U.S. Navy (ret)
Director Since 2009
Seventh Vice Chairman of the U.S. Joint Chiefs of Staff (2005-2007); Former NATO Supreme Allied Commander Transformation (2003-2005); Former Commander, U.S. Joint Forces Command (2002-2005). Admiral Giambastiani is a career U.S. Navy nuclear submarine officer with extensive operational experience, including command at the submarine, squadron and fleet level. His staff experience includes service as Co-Chairman of the Defense Acquisition Board and Chairman of the Joint Requirements Oversight Council. Admiral Giambastiani also serves on the boards of Mercury Federal Systems and Monster Worldwide. Admiral Giambastiani is a member of the Audit Committee, the Finance Committee and the Special Programs Committee.
Lawrence W. Kellner
Director Since 2011
President, Emerald Creek Group; Former Chairman and Chief Executive Officer, Continental Airlines. Mr. Kellner has served as President of Emerald Creek Group LLC (private equity) since 2010. Mr. Kellner served as Chairman and Chief Executive Officer of Continental Airlines, Inc. (commercial airline) from December 2004 to December 2009. Mr. Kellner joined Continental as Chief Financial Officer in 1995 and served as President and Chief Operating Officer from March 2003 to December 2004 and as President from May 2001 to March 2003, and was a member of the board of directors from May 2001 to December 2009. Mr. Kellner also serves of the boards of The Chubb Corporation and Marriott International, Inc. Mr. Kellner is a member of the Audit Committee and the Finance Committee.
Edward M. Liddy
Director Since 2010
Partner, Clayton, Dubilier & Rice; Former Chairman and Chief Executive Officer, Allstate. Mr. Liddy served as a partner at Clayton, Dubilier & Rice, LLC (private equity) from April to September 2008 and rejoined the firm in January 2010. At the request of the Secretary of the U.S. Department of the Treasury, Mr. Liddy served as Interim Chairman and Chief Executive Officer of American International Group, Inc. (insurance and financial services holding company) from September 2008 to August 2009. He served as Chairman of the Board of The Allstate Corporation (insurance) from January 1999 to April 2008. At Allstate, Mr. Liddy also served as Chief Executive Officer from January 1999 to December 2006 and as President and Chief Operating Officer from August 1994 to December 1998. Before joining Allstate, Mr. Liddy held a number of financial and operating positions at Sears, Roebuck and Co. before being named Chief Financial Officer in 1992. Mr. Liddy also serves on the boards of 3M Company and Abbott Laboratories and served on the board of Boeing from 2007 to 2008. Mr. Liddy is Chair of the Audit Committee and a member of the Finance Committee.
Director since 2010
Professor, University of Maryland School of Public Policy; Former U.S. Trade Representative. Ambassador Schwab has been a Professor at the University of Maryland School of Public Policy since January 2009 and a strategic advisor to Mayer Brown, LLP (global law firm) since March 2010. Ambassador Schwab served as U.S. Trade Representative from June 2006 to January 2009 and as Deputy U.S. Trade Representative from October 2005 to June 2006. Prior to her service as Deputy U.S. Trade Representative, Ambassador Schwab served as President and Chief Executive Officer of the University System of Maryland Foundation from June 2004 to October 2005, as a consultant for the U.S. Department of Treasury from July 2003 to December 2003 and as Dean of the University of Maryland School of Public Policy from July 1995 to July 2003. Ambassador Schwab also serves on the boards of Caterpillar Inc. and FedEx Corporation. Ambassador Schwab is a member of the Audit Committee and the Finance Committee.
Ronald A. Williams
Director since 2010
Former Chairman and Chief Executive Officer, Aetna. Mr. Williams served as Chairman of Aetna Inc. (managed care and health insurance) from October 2006 until April 2011, having previously served as Chief Executive Officer from February 2006 until November 2010, President from May 2002 until July 2007 and Executive Vice President and Chief of Health Operations from March 2001 until May 2002. Following his retirement in April 2011, he provided consulting services to Aetna until February 2012. Mr. Williams also serves on the boards of American Express Company and Johnson & Johnson and is chairman of the board of Emergency Medical Services Corporation. Mr. Williams is a member of the Compensation Committee, the Governance, Organization and Nominating Committee and the Special Programs Committee.
Mike S. Zafirovski
Director since 2004
Senior Advisor, The Blackstone Group; Former President and Chief Executive Officer, Nortel. Mr. Zafirovski has served as Senior Advisor to The Blackstone Group (private equity) since October 2011. Previously, Mr. Zafirovski served as Director, President and Chief Executive Officer of Nortel Networks Corporation (telecommunications) from November 2005 to August 2009. Prior to that, Mr. Zafirovski was Director, President and Chief Operating Officer of Motorola, Inc. (global communications) from July 2002 to January 2005, and remained a consultant to and a director of Motorola until May 2005. He served as Executive Vice President and President of the Personal Communications Sector (mobile devices) of Motorola from June 2000 to July 2002. Prior to joining Motorola, Mr. Zafirovski spent nearly 25 years with General Electric Company, where he served in management positions, including 13 years as President and Chief Executive Officer of five businesses in the consumer, industrial and financial services arenas, his most recent being President and Chief Executive Officer of GE Lighting from July 1999 to May 2000. Mr. Zafirovski also serves as chairman of the board of DJO Global, Inc. and as a member of the board of Apria Healthcare Group Inc. Mr. Zafirovski is a member of the Compensation Committee and the Governance, Organization and Nominating Committee.
Filed under: 24/7 Wall St. Wire, Corporate Governance Tagged: BA