Networks and wings: how does Boeing manage to stay in the air?
But what is happening to Boeing? The aircraft manufacturer, a symbol of US power, has been experiencing turbulence for several years. Since the crashes of the 737 Max and the very recent accident involving Air India's 787, there have been multiple causes. Questions remain about this series of difficulties. The company's governance could provide part of the solution.
Christine Marsal, University of Montpellier
Boeing's financial woes continue to mount: after cumulative losses of nearly €20 billion between 2020 and 2023, the 2024 financial year shows a loss of nearly €11.345 billion. The "descent into hell" seems inevitable, and yet the aircraft manufacturer recently won a major military contract and new orders from a Singapore-based aircraft leasing company. If the reasons for the financial woes are known, how can we explain the fact that the company continues to enjoy investor confidence? First of all, the weight of pension funds in the company's capital has increased from 47% in 2020 to nearly 68% in 2025. Between 1997 and 2019, management decided to gradually increase the dividend from $0.56 per share in 1997 to $8.19 in 2019. While intended to reassure shareholders, this dividend policy alone cannot explain the apparent stability of investors.
While serious quality issues have plagued the aircraft manufacturer in recent times, nothing seems to be able to stop Boeing. Over the years, the company has built up a solid business network, coupled with a network of influence that makes it "untouchable" today. To understand this resilience to technological and financial uncertainties, we analyze the composition of its board of directors over several years.
Who's in charge?
In large listed companies, the Board of Directors (BoD) is supposed to represent the shareholders, who are the owners of the companies. It appoints the chair, approves the strategy, oversees the actions of the CEO, and can even dismiss him or her. Its members are elected at the general meeting, often on the recommendation of a nomination committee, based on criteria of competence, diversity, and independence.
But this fragile balance can be undermined when the CEO is also the chairman of the board. This dual role—the famous CEO—makes the same person the strategist, the executor... and the controller of their own actions. This raises the question of whether this dual role should be maintained. The case of Boeing perfectly illustrates the excesses of this dual role through the findings of a research article published in 2023. The data observed covers the period from 1997 to 2020. It shows, in particular, that the lack of diversity within the board of directors may partly explain the difficulties encountered by the company.
A Board of Directors dominated by its CEO
This combination of roles—chairman of the board and chief executive officer—concentrates power at the top and reduces the capacity for internal countervailing power. This is particularly true given that the board of directors remains small, with only 11 to 13 members during the period under review.
Diversity is progressing slowly. In 1997, only two women sat on the board of directors. In 2020, there are three, representing barely 23% of the members (still three women in 2024). Over the entire period, there were rarely more than two or three representatives of ethnic minorities (African American, Hispanic, Asian, or Indian), often women from these communities.
The Board of Directors is organized around four traditional committees—audit, finance, compensation, and appointments—to which two new committees were added in 2020. The first, dedicated to "special programs," brings together former CEOs and members with military experience. The second, focused on safety, is a direct response to the 737 Max accidents.
On average, directors join the Board at age 56 and leave at around age 66. The turnover rate is high: no fewer than 38 different directors have served over the years. This turnover has not always ensured a better balance of profiles or more independent governance.
Engineers on the decline, financiers on the rise
Technical profiles from industry and specialists in complex projects are gradually being pushed out. Between 2012 and 2014, they virtually disappeared from the Board of Directors. Their place is now occupied by cost-cutting experts, financial directors, and former bankers. The arrival of Jim C. Nerney in 2005 marked the rise of former General Electric employees.
Between 2012 and 2016, Boeing's Board of Directors became increasingly politicized. Several former senior officials joined its ranks, including a former Secretary of Defense, a former U.S. representative to the UN, two ambassadors, and a former White House aide. Influential figures, both Republicans and Democrats, succeeded one another on the board.
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Military presence
The presence of military personnel (former or retired) is also growing. Between 1997 and 2020, we can identify a former Marine, a former general who worked at the Secretary of State for Defense, a retired Marine general, a vice admiral, and a retired admiral. In addition, several military personnel have held positions within NATO. This aspect is still present in 2024.
This shift confirms a trend that was already underway: Boeing is strengthening its ties with the corridors of power, even as it moves away from its industrial roots. The Board is becoming less of a technical steering body and more of a strategic and political lever.
Focus on financial efficiency
At the same time, Boeing is cutting its workforce: 231,000 employees in 1997, 141,000 in 2020. The tone has been set: priority is given to financial efficiency, to the detriment of technical and ecological skills, which are relegated to the background.
However, this shift comes at a key moment for the group. The 787 Dreamliner program is launched with a host of innovations: composite materials, new engines, new ways of collaborating with subcontractors. Projects of this scale require informed leadership. But paradoxically, as technology gains momentum, the Board of Directors is losing its technical experts.
The same scenario is repeating itself with the 737 Max. Officially, the aircraft is just an update of an existing model. Unofficially, engineers are sounding the alarm: the technical choices are risky, and a new aircraft would be safer. But their warnings are falling on deaf ears. With no one to relay their concerns to the board of directors, they are not being heard.
A board that is too homogeneous to debate
By favoring profiles from finance or political circles, Boeing deprived itself of diversity of thought. Fewer debates, fewer clashes of ideas. Yet it is often in these frictions that good decisions are born. In the case of the 737 Max, the lack of dialogue allowed safety flaws to slip under the radar.
Worse still, an investigation by the US Senate suggests that the group's proximity to certain political decision-makers may have facilitated accelerated certification of the aircraft. Ultimately, this may paradoxically not have served the company well, whose reputation has been tarnished by fatal air disasters. In reality, the causes are undoubtedly more complex, and this proximity is one of the factors that may explain the situation, but it would be excessive to consider it the only factor.
During the setbacks of the Dreamliner and MAX programs, several shareholders are attempting to raise the alarm. The city of Livonia, Michigan, as well as asset management giants Vanguard and BlackRock, are demanding answers. Livonia denounces a lack of transparency regarding the 787 program. Vanguard, for its part, is questioning management about the safety of the 737 MAX and wondering about the board of directors' actual involvement.
Accused administrators
This pressure led to legal action: the board members were accused of failing to exercise their supervisory duties, particularly with regard to safety issues. The case ended with an out-of-court settlement. Boeing agreed to pay $225 million—not directly, but through its insurers.
In short: the convicted executives escape any personal financial liability. In early 2025, another agreement put an end to the criminal proceedings initiated after the two crashes of the 737 Max in 2018 and 2019. The company thus avoided a potentially explosive public trial, at the cost of a settlement negotiated with the US government.
Ironically, during the development of the Dreamliner, Boeing executives recognized the crucial role of engineers in coordinating with subcontractors. But this awareness did not stand up to the financial logic that took hold at the top. At Boeing, it wasn't a technological crisis that precipitated the downfall of the 737 Max, but a crisis of governance. A company that designs aircraft without listening to its engineers runs the risk of one day no longer knowing how to make them fly.
Christine Marsal, Senior Lecturer, Management Control, Bank Governance, University of Montpellier
This article is republished from The Conversation under a Creative Commons license. Readthe original article.