Corporate Governance and Sustainability
Development Goals: Boeing Case Study
Marwan M. Abdeldayem
1(
B
)
, Saeed Hameed Aldulaimi
1
,
Ibrahim A. Abu-AlSondos
2
, and Abdulhameed Baqi
1
1
College of Administrative Sciences, Applied Science University (ASU), Bahrain,
Kingdom of Bahrain
Marwan.abdeldayem@asu.edu.bh
2
College of Computer Information Technology, American University in the Emirates (AUE),
503000 Dubai, United Arab Emirates
Abstract.
ThispaperanalyzestheBoeingcontroversythatemergedafterthe2018
and
2019
crashes
of
two
737-MAX
jetliners.
It
is
specified
that
both
tragedies
were
driven
by
changes
made
to
a
vital
flight
management
system
that
Boeing
had
not
informed
regulators,
authorities,
and
major
airlines
about.
As
a
result,
346
individuals
were
killed,
and
Boeing
attempted
to
blame
the
crew
members
instead
of
accepting
responsibility
for
the
tragedies.
Boeing’s
governance
phi-
losophy
prioritized
profit
maximization
for
shareholder
advantage
and
market
competitiveness,
leading
to
an
agency
conflict
between
shareholders
and
Board
members
that
resulted
in
values
violations
and
stakeholder
neglect.
This
paper
presents a thorough analysis that makes it clear that Boeing’s culture shifted after
its acquisition of McDonnell Douglas, incentivizing stock price over quality and
safety. Such a culture shift created a toxic corporate climate where whistleblowers
were
ignored
and
engineers
were
intimidated
if
they
overlooked
cost
and
time
objectives. Concerning sustainability, the study revealed that Boeing violated sev-
eral
Sustainable
Development
Goals
(SDGs),
including
goals
3,
8,
and
17,
and
neglected the notion of a Triple Bottom Line (TBL) by focusing solely on the eco-
nomic
component
and
disregarding
stakeholders’
concerns.
The
study
proposes
waystohelpBoeingrecoverfromthescandal,includingattainingahealthybalance
between shareholders’ values and stakeholders’ concerns, enhancing stakeholder
engagement by strengthening transparency, honesty, and psychological safety in
Boeing’s
corporate
culture,
and
making
progress
towards
SDGs
by
complying
with human rights and social justice guidelines, emphasizing all four principles of
TPL, and engaging more meaningfully with key stakeholders in their value chain.
Keywords:
Utilitarianism
·
Key Performance Indicators
·
Key Risk Indicators
·
Psychological Safety
·
Stakeholder Engagement
·
Social Justice
·
Triple Bottom
Line
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023
S. G. Yaseen (Ed.): SICB 2023, SBD 136, pp. 354–366, 2023.
https://doi.org/10.1007/978-3-031-42455-7
_
30
Corporate Governance and Sustainability Development Goals: Boeing Case Study
355
1
Introduction
Corporate
governance
(CG)
is
the
practices,
rules,
and
processes
that
guide
and
gov-
ern
an
organisation
[
1
].
Good
CG
encourages
ethical
conduct
and
guarantees
that
the
interests of every stakeholder are harmonised, hence assisting the corporation in gain-
ing investors and general societal trust. Poor CG leads to corporate disasters, including
controversies,
bankruptcy
and
collapses,
which
can
cause
irreparable
reputation
dam-
age. The commercial world has encountered various corporate scandals that have caused
severe reputational and financial harm to firms, including the Boeing 737-max scandal.
In Indonesia on October 2018, a new 737-MAX Boeing jet crashed 12 shortly after
taking
off,
which
killed
all
189
onboard
passengers.
About
five
months
later,
another
737-max crashed Six minutes after take-off in Ethiopia, killing all 157 people onboard.
With
this
in
mind,
investigations
revealed
that
Boeing
adopted
a
new
key
flight
man-
agement
system
known
as
MCAS
and
misrepresented
to
regulators
and
the
aviation
industry
about
such
modifications
in
order
to
save
the
business
millions
of
dollars
in
pilot retraining expenses [
2
]. Boeing did not include a description of the MCAS in its
instruction/training handbook for the new 737-Max aircraft, which was sold to carriers.
A vice president of Boeing clarified that the company believed pilots were not required
to understand the device since they were trained to deal with emergency scenarios, and
the firm did not intend to overwhelm crew personnel with superfluous knowledge [
3
–
6
].
Boeing continued to argue after the first accident that the plane was reliable and did
not
halt
it.
The
corporation
claimed
it
would
provide
a
software
repair
but
would
not
expedite
the
process
because
there
was
no
evidence
that
the
plane’s
function
was
the
only reason for the accident [
7
,
8
]. Boeing even accused the Indonesian pilots of incom-
petency [
9
]. Following the second tragedy, the aeroplane was grounded for 20 months
globally; however, during that period, the MCAS software was modified [
10
]. In spite
of
what
Boeing
has
already
stated,
they
were
knowledgeable
that
pilots
did
need
spe-
cialized
training
to
prevent
tragedies
from
happening
in
the
first
place;
however,
they
decided to turn-down simulation software training calls from air carrier firms in order
to avert the additional cost strain for air carriers [
11
] and contribute to making it a more
appealing product. Investigations disclosed that the MCAS software had been a worry
since the start, and
as opposed
to what
Boeing
had
alleged,
they
were
fully conscious
that
pilots
did
require
considerable
training
to
avoid
disasters.
The
Board
asked
Boe-
ing’s CEO to retire after the crashes, yet he went away with over $60 million in pension
payments as well as shares/stocks [
12
,
13
]. The following part of this study will exam-
ine
Boeing’s
scenario
from
a
CG
lens,
critiquing
its
Board,
stakeholders,
philosophy,
and
risk-management
before
offering
suggestions
for
improvements
to
be
considered
over the next 12 to 24 months [
14
].
Worthmentioningthattheconceptoftriplebottomline(TBL)accountinghasbecome
increasingly fashionable in recent years in the fields of management, consulting, invest-
ment, and NGOs. The idea behind the TBL paradigm is that the ultimate success or health
of a company can and should be measured not only by traditional financial returns, but
also by social/ethical and environmental performance. That’s what it means. Of course,
it has long been accepted by most people inside and outside companies that companies
have various obligations to act responsibly towards their stakeholders. It is also almost a
truism that a company cannot be successful in the long term if it consistently disregards
356
M. M. Abdeldayem et al.
the interests of its key stakeholders. The obvious novelty of TBL is the need to measure,
calculate, audit, and report on the overall performance of its commitments to communi-
ties, employees, customers, and suppliers (just to name her four of the stakeholders) is
claimed by its proponents over a century. That’s an exciting promise. One of the persis-
tent clichés of modern management is that you can’t manage what you can’t measure. If
we consider ethical business practices and social responsibility to be important functions
of
corporate
governance
and
management,
we
believe
that
management,
shareholders
and other stakeholders should have tools to make corporate performance more clear in
this regard. Any attempt to develop it should be welcomed [
15
].
2
Boeing Scandal from the Corporate Governance (CG) Lens
The
737-MAX
incidents
harmed
Boeing’s
credibility,
which
can
be
attributed
to
their
disregard for proper CG. Their governance strategy centred on maximising shareholders’
short-term returns. Despite delivering around 90% of operating income for shareholders,
this attitude disregards the interests of other crucial stakeholders [
16
]. Such a governance
strategy
corresponds
to
a
utilitarianism
paradigm
that
inevitably
becomes
an
agency
conundrum [
17
].
Boeing
provided
a
premature
clearance
of
the
737-MAX,
directed
by
such
a
util-
itarian
board,
in
desire
of
short-term
profit
and
unhealthy
rivalry
with
Airbus.
Boeing
allowed
the
model’s
distribution
to
the
market
despite
that
internal
review
showing
that further necessary knowledge and training could have been given for the upgraded
MCAS.
The
shareholders’
drive
for
a
quick
profit
accelerated
the
device
certification
process without a doubt [
18
,
19
].
When shareholders delegate complete responsibility for the corporate actions to the
agent (Directors and executives) and entrust them with determining what operational and
corporate data should be supplied to them via agents, an agency dilemma arises [
20
]. As
a result, stockholders will have unequal access to information [
21
] as in Boeing’s case.
Thus,
according
to
the
shareholder,
Richard
Seeks,
the
Board
has
prioritised
financial
statistics over aircraft safety, resulting in violations of securities fraud [
22
].
Likewise,
in
order
to
build
value
for
shareholders,
Boeing
had
to
weigh
the
pos-
sibly
conflicting
interests
of
many
stakeholders,
including
stockholders
impacted
by
the company’s actions. In an ideal world, shareholder value could be achieved by con-
currently
accommodating
the
company’s
four
driving
forces:
employees,
customers,
vendors, and the environment [
23
]. Nevertheless, ignoring the concerns of other stake-
holders
[
24
].
Boeing
jeopardised
the
shareholders’
positions
in
ways
that
resulted
in
significant economic and reputational damages.
Boeing’s
official
values
represent
a
framework
for
“Seek,
Speak,
&
Listen”
that
indeed encourages employees to seek input, express warnings, and listen to one another,
thereby
enabling
the
company
to
acquire
early
warnings
about
errors
or
noncompli-
ance (Boeing, n.d.). The governing Board, however, violated these values by prioritis-
ing profit maximisation above everything else, inflicting harm to both external as well
as internal stockholders. Internally, staff were forced to meet hazardous aircraft produc-
tion
deadlines,
despite
the
engineers’
repeated
quality
and
safety
warnings
that
were
ignored by the company’s higher authorities [
25
]. The US Federal Aviation Administra-
tion (FAA) performed an audit that revealed that staff were subjected to pressure and a
Corporate Governance and Sustainability Development Goals: Boeing Case Study
357
number of impediments in terms of openness and transparency with regulators [
26
]. This
demonstrates
poor
CG
through
persistent
doubts
over
the
company’s
human
resource
competence and engineering excellence [
27
,
28
].
Nonetheless, the freshly formed enlightened shareholder-theory implies that fulfill-
ing stakeholders’ demands [
29
] and interests are integral to Boeing’s long-term perfor-
mance. According to the notion, a business will only flourish and increase shareholder
value
if
it
satisfies
the
wants
and
interests
of
its
primary
stakeholders
[
23
].
In
order
to
remedy
the
problem
and
safeguard
the
company’s
reputation,
the
Board’s
interests
will
likely
be
downgraded
following
the
crashes
in
favour
of
those
of
the
company’s
stakeholders (primarily regulators, customers, and employees).
3
The Board of Directors (BOD)
The US CGC (Corporate Governance Code) controls the formation and operation of pub-
licly listed companies. It facilitates business accountability, transparency, and honesty by
adhering to the fundamental CG concepts of shareholder accountability, heavy indepen-
dent
directors,
effective
financial
management
&
reporting,
and
corruption
avoidance
[
23
].
The Board Governance Regulations indicate how Boards should function, Director
credentials and experience, the regularity of votes and chairmanship shifts, and remuner-
ation
disclosure
[
30
].
Effective
Boards
conform
to
the
aforementioned
principles
and,
therefore, should better participate with shareholders and engage stakeholders. And thus,
all of this must be uniform and bidirectional [
31
,
32
].
At the point of this writing, Boeing conforms to a CG guideline and a board’s code of
ethical company conduct, both of which were recently updated by June 2022 [
33
] which
inadditionconformtotheCGCrequirementsbutalsodevelopedandmaintainacultureof
integrity and accountability. They made it unmistakably appear that the board’s purpose
in the company is to establish both the overall direction and the culture. The current CEO
and President of the company are David Calhoun, and the Board of Directors consists
of 10–14 competent individuals, of whom at most 75% are self-dependent.
Since the deadly CGC failures in 2018 and 2019, there has been a significant shift
to
Boeing’s
organizational/executive
structure
and
system
of
governance.
This
reform
involves the CEO’s role. Dennis Muilenburg served as the chairman and the CEO before
the current CEO. This created a significant conflict-of-interest because he was in charge
of the company’s daily management and operations as well as functioning as the board’s
chairman, granting him significant influence over the organization’s overall strategy and
decision-making [
34
].
The Board executed three fundamental ethical lapses in CG [
35
] which resulted in
tragedy, massive, recurring damage to the corporation, and a $2.5 billion loss in penalties
and compensations.
The Non-consent:
Key-stakeholders should be involved in corporate operations and decision-making.
Undoubtedly,
the
authority,
carriers,
and
aircrew
were
not
disclosed
the
new
aircraft
design feature when they should have [
31
,
36
]. Those few who questioned it prior to its
appearance on the market were also disregarded and mocked.
358
M. M. Abdeldayem et al.
Failure to Adhere to the Precautionary Principle:
Following the 2018 accident, Dennis Muilenburg repeatedly assured the sector, the
public, the media and even the U.S. president that there had been no fault with the aircraft
and that it was safe to board. In addition, they falsely claimed that the pilots were at fault
for not following the right emergency protocols.
The Belief that Greed-is-Good:
The fact that members of Boeing’s Board of Directors and senior executives worked
together contributed to the establishment of a newly developed toxic atmosphere in the
manner
in
which
the
corporation
conducted
its
business.
It
should
be
noted
that
the
independence
of
both
day-to-day
operations
and
long-term
choices
are a foundational
componentofeffectivecorporategovernance.Awell-balancedboardshouldhaveabroad
membership that includes both dependent and independent members. This will enable
ethical and consequential choices to be questioned and revised as needed. Because of the
sense in which businesses are constantly going through ebbs and flows within shifting
contexts, the governance notions and frameworks that are currently in place should also
be reviewed on a regular basis so that they can adjust to these shifts and better represent
the strategic and operational needs of Boeing.
4
Analysing Boeing’s Corporate Culture
Codes
of
conduct
can
improve
a
company’s
image,
the
workplace
standards
of
its
employees,
and
its
economic
condition
[
35
,
37
].
It
has
also
been
demonstrated
that
norms of behaviour inhibit unethical and illegal conduct. Unfortunately, Boeing’s man-
agement disregarded its norms of behaviour, jeopardising the organisation’s most crucial
aspect, safety.
After the two crashes, a longtime Boeing engineer filed a complaint that was released
in
the
New
York
Times,.
Unfortunately,
the
transition
in
Boeing’s
philosophy
ignored
any safety or technical recommendations that would have cost the company extra cash
[
38
–
40
]. Numerous whistle-blowers attempted to alert Boeing’s management to major
violations; but even so, no measures were taken, as well as the whistle-blowers compre-
hended that there would be severe repercussions, including their careers being damaged
and their inability to obtain a comparison for yet another job [
41
,
42
].
Instead
of
investing
in
something
that
would
elevate
the
safety,
Boeing
put
80%
of its free capital in stock buybacks, generating enormous profits for shareholders and
executives.
In
contrast,
engineers
were
routinely
informed
that
their
salaries
were
at
stake if cost efficiency and timeliness objectives were not met. In recent years, Boeing’s
CEOs—especially McNerney—have shown a pattern of informing/stressing about their
authority and intimidating abilities. Despite the fact that many of the Boeing employees
involved in making the 737-MAX declared they would not fly on it or allow their families
too,
the
company
went
ahead
and
put
it
on
sale
anyhow.
This
appears
to
represent
an
instance of the concrete and abstract phenomena in which individuals are more impacted
by proximate considerations (such as their personal safety, the security of their beloved
ones, and Boeing’s economic standing) than by distant and less tangible factors [
34
,
43
].
It has furthermore been demonstrated that the cultural identity of each board member
determines the board’s attitude and the manner in which decisions are taken [
40
]. Mul-
ticultural
Boards
must
have
a
more
egalitarian
culture
that
elevates
numerous
voices,
Corporate Governance and Sustainability Development Goals: Boeing Case Study
359
includes diverse perspectives, and promotes dialogues about diversity in order to func-
tion more productively [
44
]. A former White House deputy chief of staff, an UN’s former
ambassador, and two other individuals who had previously held non-commercial gov-
ernment positions made up the Boeing Board of Directors. These interactions can foster
sectionalism and make obtaining an unbiased opinion more difficult. The Boeing Board
of
Directors
had
five
committees
(Audit;
Finance;
Compensation;
Special
Programs;
and
Governance,
Organization,
and
Nominating).
Audit
oversaw
the
risk,
although
it
was not required to communicate safety since its charter emphasised financial risk.
5
Functions of the Board of Directors in Risk Management
In a typical corporate setting, the Key-Performance-Indicators (KPIs) and the Key-Risk-
Indicators (KRIs) are always kept in a state of equilibrium with one another (KRIs). It
would appear that Boeing’s KPIs and KRIs were in direct competition with one another,
with the financial KPIs emerging victorious. The new management teams at Boeing gave
KRIs little to no attention, if any attention at all, in large part because they feared that
recognising them would slow down output and therefore did not want to acknowledge
them. If the new management had followed proper ethical standards and managed KRIs
in the appropriate manner, they would have been able to identify and address the concerns
regarding the safety of the 737-MAX [
45
].
The Board of Directors must play a proactive role in unearthing risks that ambitious
executives
may
have
concealed.
And
hence,
When
the
KRIs
are
effectively
managed,
the Board will be able to identify possible hazards and take necessary actions to mitigate
them. Staff concerns, staff under stress, simulator resting outcomes, and engineer errors
are illustrations of KRIs.
From
a
risk-management
standpoint,
Boeing’s
executive
and
Boards
did
not
safe-
guard
the
corporation,
airlines,
and
public
that
utilised
its
aeroplanes.
They
appeared
corrupt,
and
risk
management
procedures
were
disregarded.
In
response
to
the
occur-
rences and compensatory fines imposed to prevent prosecution, the FAA approved the
aeroplanecertifyingreformandcomplianceregulations, whichbolsteredFAAregulatory
control.
6
Analysing the Boeing Scandal from the Perspective of the SDGs
First, the incident was the result of a newly modified device/function that was not com-
municated
to
the
pilot
group,
thus
claiming
that
“safety,
public
health
and
well-being
come first,” but instead the private sector. Endangered the life or property of a person or
employee. Boeing knew internally that pilots needed training for this device, but did not
mention or provide it. Risked the lives of crew members and passengers in the United
States and argued that existing emergency response training covered it.Avoiding addi-
tional training costs by airlines is part of Sustainable Development It was also at odds
with the “Excellent Health and Well-Being” [
46
].
Second, Boeing’s government-focused corporate body acts only in the best interests
of its shareholders and not the interests of other key stakeholders (regulators, employees,
360
M. M. Abdeldayem et al.
international airlines, and governments). I was ignoring profit. This contradicts Sustain-
able
Goal
17,
‘Re-energize
the
global
partnership
for
sustainable
development’.
This
goal identifies multi-stakeholder relationships as a key tool for mobilizing and commu-
nicating knowledge and skills that support the achievement of the SDGs in all countries
[
47
].
Third,
Boeing
has
failed
to
achieve
Goal
8,
Decent
Work
and
Economic
Growth
(United
Nations,
2015),
by
enforcing
a
corporate
culture
of
submission
to
its
leaders,
with
adverse
consequences
for
those
who
blindly
disobey.
As
a
result,
it
has
silenced
those who might have raised the money. Concerns about issues that may impact timing
and cost reduction goals.
Finally,
Boeing
fabricated
false
accusations
about
the
pilots’
lack
of
competency
relative to their American counterparts, implying that they were to accuse for the acci-
dents. With such a one-sided/unjust indictment, Boeing ignored the 10th Goal’s target
of “
Reduced Inequalities
” by making a false claim.
7
How Can Companies Like Boeing Ensure that they Prioritize
Sustainability and the SDGs?
To ensure that companies like Boeing prioritize sustainability and the SDGs, they can
take the following steps:
Incorporate sustainability into the company’s culture and values: Companies should
ensure that sustainability is embedded in their corporate culture and values. This involves
creating a culture that promotes environmental responsibility, social accountability, and
ethical behavior.
Develop a sustainability strategy: Companies should develop a sustainability strategy
that
outlines
their
goals,
targets,
and
action
plans.
This
strategy
should
align
with
the
SDGs and prioritize sustainability in all aspects of the company’s operations.
Implement sustainable practices: Companies should implement sustainable practices
throughout their operations, including in their supply chain management, product design,
and
manufacturing
processes.
This
includes
reducing
waste,
conserving
energy,
and
minimizing the company’s carbon footprint.
Engage with stakeholders: Companies should engage with stakeholders such as cus-
tomers,
employees,
investors,
and
communities
to
understand
their
expectations
and
concerns regarding sustainability. This engagement
can help companies identify areas
for improvement and develop targeted sustainability initiatives.
Monitor and report on progress: Companies should regularly monitor and report on
their sustainability performance to ensure that they are meeting their goals and targets.
This transparency can help build trust with stakeholders and demonstrate the company’s
commitment to sustainability.
By
taking
these
steps,
companies
like
Boeing
can
prioritize
sustainability
and
the
SDGs and ensure that they are contributing to sustainable development.
Corporate Governance and Sustainability Development Goals: Boeing Case Study
361
8
Conclusion and Future Proposals for Improvement
In
conclusion,
corporate
governance
and
SDGs
are
interconnected
and
have
a
signifi-
cant
impact
on
each
other.
Corporate
governance
plays
a
critical
role
in
ensuring
that
companies
like
Boeing
Company
adhere
to
SDGs,
which
are
critical
for
sustainable
development. In the case of Boeing Company, the company’s corporate governance fail-
ures led to the violation of multiple SDGs, including SDG 9 (Industry, Innovation and
Infrastructure) and SDG 13 (Climate Action).
Boeing Company’s failure to uphold proper corporate governance principles resulted
in
the
737
MAX
accidents,
which
led
to
the
loss
of
lives,
environmental
damage,
and
financial losses. The company’s management made decisions that prioritized short-term
financial gains over long-term sustainability and safety. These decisions ultimately led
to a significant setback for the company and its stakeholders.
To prevent similar corporate governance failures in the future, companies like Boeing
must
prioritize
sustainability
and
the
SDGs.
This
can
be
achieved
by
implementing
robust corporate governance practices, prioritizing transparency and accountability, and
ensuring compliance with international standards and regulations. Companies must also
engage with stakeholders and consider their interests in decision-making processes.
In conclusion, corporate governance and SDGs are critical for sustainable develop-
ment, and companies like Boeing must prioritize them to ensure long-term success and
sustainability.
After the 737-max tragedies, it became evident that Boeing cannot place the safety of
civilians as a secondary priority, as they cannot jeopardise safety/quality for short-term
profit (cutting costs by only a few million and attempting to push fraudulent information)
against setbacks of billions on pay-outs and lawsuits. Producing reliable, safe, and fuel-
efficient aeroplanes that adhere to safety regulations while maximising revenues/capital
market is not as straightforward as it may appear, especially as fierce international com-
petition [Airbus] and demand changes evolve and become more prevalent by the fortune
of 2023. (CNBC, 2022). Therefore, in terms of competitiveness, Boeing must bridge the
gap between revenue growth and safety. They should not, for example, sacrifice value
or
pilot
training
in
favour
of
markdowns,
impose
strict
deadlines
and
quality
slashed
targets, rush the procedures, deliver defective products, or renounce their commitment
to “If safety and quality norms are adhered to, executives
and engineers believe profit
will inevitably follow”. Through this approach, Boeing agents must also consider and
weigh
the
likely
conflicting
agendas
and
interests
of
various
key
stakeholders
(state-
authorities, regulators, staff, suppliers, vendors, and customers) and SDGs while deliv-
ering
shareholder
value.
And
this
is
sensible
since
operating
an
enterprise
with
such
great products has always been about involving stakeholders to deliver value, fairness,
and ethics to the corporate system, and so, governing all such stakeholders necessitates
vision, commitment, and dedicated leadership without falling to compromises [
48
].
In addition, being a better listener is a sign of strong leadership because it allows you
to foster mutual trust through not only hearing the opinions of your stakeholders but also
recognising
their
concerns
[
20
].
According
to
this
principle,
team
members’
involve-
ment with internal stakeholders is best enhanced when they feel their opinions are heard
equally and cherished, even if they are not put into action. Boeing should conform to and
not violate its formal principles of “Seek, Speak, and Listen”, in which employees must
362
M. M. Abdeldayem et al.
be inspired to seek an answer, voice warnings and pay attention to one another (Boeing,
2022).
And
to
fulfil
this,
a
“psychologically-safe”
climate
must
be
cultivated
through
mutual respect and trust amongst company hierarchy [top or bottom], where employees
ought not to be penalised for expressing doubt during meetings about the potential pres-
ence of defects in the system that can impede the project, nor reprimanded for observing
malfunctions that necessitate expensive restoration of an entire system/function. Rather,
rewards and recognition should be employed to incentivise employees to raise concerns
[
49
,
50
] found that a company’s atmosphere of psychological-safety begins at the top and
that the impacts of top-leader conduct on employees’ perception of safety can contribute
to a culture of inclusivity that fosters good leadership attitudes and team problem-solving
skills.
Moreover,
decisions
during
the
intense
competition
must
be
taken
carefully
and
unbiased
to
avoid
costly
disasters.
To
do
so,
Boeing
leaders,
should
stop
relying
on
“Anchoring
or
Normality-bias”
by
stop
having
the
tendency
to
underestimate
critical
concerns,
and
not
depend
heavily
on
a
single-piece
of
information
based
on
lightly
observed
data
or
old
facts,
which
might
not
be
feasible
in
today’s
time.
And
this
is
“
because of anchoring, people will tend to underestimate the probabilities of failure in
complex system
” [
51
]. Boeing’s 737-Max tragedy is a classic event of the anchoring-bias,
as the fact that Boeing presumed that pilots were not required to be aware of the MCAS
since they were trained to handle unforeseen/emergency circumstances. Despite the Lion
Air disaster, Boeing kept insisting that the aeroplane was safe. Boeing leaders who did
not ground the planes felt total confidence in safety metrics generated decades earlier.,
until the Ethiopian-Airlines crash they were blaming the foreign pilots. Instead, leaders
should
perform
a
cost-benefit
analysis
of
current
situations,
taking
all
the
measures
seriously. And from the critical-thinking standpoint, keeping active (red-team or devil
advocates) members who continually present weak points and challenging ideas during
decision-making. Through this process, they can detect potential problems/errors before
it’s too late and costly to recover.
Furthermore,
Boeing’s
Board
members
need
to
stop
over-trusting
or
to
fall
into
“Overconfidence-bias” Towards their CEOs, decisions, which was evidenced when Boe-
ing’s board continued to back Dennis Muilenburg the CEO, for his several mistakes and
believed that everything he had done for 737-max is right (CNBC, 2019). Instead, they
should encourage a culture of balanced accountability, independency as well as punish-
ment for (violations, false accusations or failing of precautionary principle), make every-
one involved and responsible, even top-members, and set clearly documented expecta-
tions
in
meeting
agendas
that
correlate
with
the
FAA
standards.
A
survey
by
the
U.S
General
Accounting
Office
(2000)
surveyed
3816
mid/upper-level
full-time
managers
on their perceptions of performance, indicating that not building a culture of balanced
and constructive-accountability can hinder the development of a work-environment con-
ducive
to
achieving
favourable
results.
So,
shifting
to
constructive-accountability
will
necessitate a culture change, where managers will find the output well worth the effort
(U.S. Office of Personnel Management, 2022). Boeing’s Board members are expected
to screen the CEO’s decisions along with the corporate performance, act as its ethical-
backbone, and take corrective actions if necessary. Failing responsibilities in the aviation
Corporate Governance and Sustainability Development Goals: Boeing Case Study
363
sector can cause ripple effects on the company’s long-term image, leading to an immense
public outrage.
Boeing
must
uphold
the
International
Labour
Organization’s
(2022)
goal
of
safe-
guarding individuals by devoting themselves towards social-justice and globally recog-
nised human and labour-rights to foster fairness and respect among their overseas work-
forces. This embodies the founding principle that social-justice is essential for achieving
and sustaining world peace. In order to achieve its economic, ecologic, and social goals,
Boeing should instead promote Triple Bottom Line (TBL) and act in a way that favours
the environment, people, as well as earnings rather than focusing only on maximising
profits
[
50
].
(Carroll,
1999).
Furthermore,
Boeing
must
completely
commit
to
raising
awareness andinvolvingstakeholders across its valuechain, especiallygovernments, car-
riers,
regulators,
and
environmental
groups.
Multi-stakeholder
expectations
should
be
satisfied through an elevated, well-structured engagement, as stipulated in Stakeholder-
Engagement 2030 Agenda; in that sense, Stakeholders should be informed of the busi-
ness’s aims and objectives, as well as be well-educated about predicted results and how
various decisions might affect them up front [
51
–
53
].
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