Wings and Networks: How Does Boeing Stay in the Air?
But what’s going on with Boeing? The aircraft manufacturer, a symbol of American power, has been facing turbulence for several years now. From the 737 Max crashes to the very recent accident involving Air India’s 787, there are many contributing factors. Questions remain about this string of difficulties. The company’s governance may hold part of the answer.
Christine Marsal, University of Montpellier
Boeing’s financial woes continue to deepen: after cumulative losses of nearly €20 billion between 2020 and 2023, the 2024 fiscal 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 setbacks are known, how can we explain that the company retains investor confidence? First, the share of pension funds in the company’s capital has risen 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 investor confidence.
Although serious quality issues have dominated recent news about the aircraft manufacturer, nothing seems to be able to stop Boeing. Over the years, the company has built a solid business network, coupled with a network of influence that makes it virtually “untouchable” today. To understand this resilience in the face of technological and financial uncertainties, we analyze the composition of its board of directors over several years.
Who's in charge?
In large publicly traded companies, the Board of Directors is expected to represent the shareholders, who are the owners of the company. It appoints the chairman, approves the strategy, oversees the CEO’s actions, and can even remove him from office. Its members are elected at the annual general meeting, often on the recommendation of a nominating committee, based on criteria of competence, diversity, and independence.
But this delicate balance can be undermined when the CEO also serves as chairman of the board. This dual role—the so-called “CEO-chairman”—makes the same person the strategist, the executor… and the overseer of their own actions. This raises the question of whether this dual role should be maintained. The case of Boeing perfectly illustrates the pitfalls of this arrangement, as shown by the findings of a research article published in 2023. The data analyzed covers the period from 1997 to 2020. It shows, in particular, that the lack of diversity on the board of directors may partly explain the setbacks faced by the company.
A board of directors dominated by its CEO
This combination of roles—chairman of the board and CEO—concentrates power at the top and reduces the capacity for internal checks and balances. This is all the more true given that the board of directors remained small, with only 11 to 13 members during the period in question.
Diversity is improving only slowly. In 1997, only two women served on the board. By 2020, there were three, representing just 23% of the members (still three women in 2024). Over the entire period, there were rarely more than two or three representatives from ethnic minority groups (African American, Hispanic, Asian, or Native American), often women from these communities.
The Board of Directors is organized around four standard committees—Audit, Finance, Compensation, and Nominating—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 around age 66. The turnover rate is high: no fewer than 38 different directors have served over the years. This turnover has not always resulted in a better balance of profiles or more independent governance.
Engineers on the decline, financiers on the rise
Technical professionals with industry backgrounds and specialists in complex projects have been gradually pushed out over time. Between 2012 and 2014, they virtually disappeared from the Board of Directors. Their places are now filled by cost-cutting experts, chief financial officers, and former bankers. The arrival of Jim Nerney in 2005 marked the rise of former employees of General Electric.
Between 2012 and 2016, Boeing’s Board of Directors became somewhat more politically diverse. Several former high-ranking 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 from both the Republican and Democratic parties took turns serving on the board.
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Military presence
The presence of military personnel (former service members or retirees) is also growing. Between 1997 and 2020, the following individuals were identified: a former Marine, a former general who had served at the Office of the Secretary of Defense, a retired Marine general, a vice admiral, and a retired admiral. In addition, several military personnel have held positions within NATO. This trend continues into 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: from 231,000 employees in 1997 to 141,000 in 2020. The tone has been set: financial efficiency takes priority, at the expense of technical and environmental expertise, which have been pushed to the sidelines.
This shift, however, comes at a critical juncture for the company. The 787 “Dreamliner” program is being launched with a host of innovations: composite materials, new engines, and new ways of collaborating with suppliers. Projects of this magnitude require sound leadership. But paradoxically, just as the technology is gaining momentum, the Board of Directors is losing its technical experts.
The same scenario is playing out with the 737 Max. Officially, the aircraft is merely an update to an existing model. Unofficially, engineers are sounding the alarm: the technical choices are risky, and a new aircraft would be safer. But their warnings fall on deaf ears. With no one to advocate for them on the board of directors, their voices go unheard.
A board that is too homogeneous to engage in debate
By consistently favoring candidates from the finance or political sectors, Boeing deprived itself of diverse perspectives. There was less debate and less clash of ideas. Yet it is often through such friction that sound decisions are made. In the case of the 737 Max, the lack of dialogue allowed safety flaws to slip under the radar.
Worse still, a U.S. Senate investigation suggests that the company’s close ties to certain policymakers may have facilitated an expedited certification process for the aircraft. Ultimately, this may paradoxically have done the company a disservice, as its reputation has been tarnished since fatal air disasters. In reality, the causes are surely more complex, and while this proximity is one factor that may explain the situation, it would be excessive to consider it the sole factor.
Amid the setbacks of the Dreamliner and MAX programs, several shareholders are trying to sound the alarm. The city of Livonia, Michigan, along with asset management giants Vanguard and BlackRock, are demanding answers. Livonia is criticizing a lack of transparency regarding the 787 program. Vanguard, for its part, is questioning management about the safety of the 737 MAX and raising concerns about the board of directors’ actual involvement.
Accused directors
This pressure led to legal action: the board members were accused of failing to fulfill their supervisory duties, particularly with regard to safety issues. The case was settled out of court. Boeing agreed to pay $225 million—not directly, but through its insurers.
In short: the convicted executives are off the hook for any personal financial liability. In early 2025, another agreement brought an end to the criminal proceedings launched following the two 737 Max crashes in 2018 and 2019. The company thus avoided a potentially explosive public trial, in exchange for a settlement negotiated with the U.S. government.
It is ironic that during the development of the Dreamliner, Boeing executives had recognized the crucial role engineers played in coordinating with subcontractors. But this realization could not withstand 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 airplanes without listening to its engineers runs the risk, one day, of no longer knowing how to make them fly.
Christine Marsal, Associate Professor (HDR), Management Accounting, Banking Governance, University of Montpellier
This article is republished from The Conversation under a Creative Commons license. Readthe original article.