Boeing Corporate Governance: Case Stugy Boeing's Double-Edged Sword

Case Study: Boeing's Double-Edged Sword

1. Boeing's Double-Edged Sword: Pioneering Advances and Safety Alarms

2. Boeing Commercial Airplanes Revenue: $38.1 billion Boeing Defense, Space & Security Revenue: $23.2 billion Boeing Global Services Revenue: $17.5 billion Company Profile: Founded: 1916 ( 108 years ) Headquarters: Arlington, Virginia , USA Industry: Aerospace and Defense Publicly traded company NYSE (BA) Global Presence: Employees: Over 170,000 worldwide Operations: More than 65 countries Customers: Includes commercial airlines, government, and defense customers in over 150 countries. Revenue (2023): $78.8 billion

3. 1916 Boeing founded by William Boeing, starting with seaplanes and military aircraft 1954 The 707 revolutionized jet commercial air travel 1969 The 747 jumbo jet redefined passenger air travel 2004 The 787 Dreamliner, a revolutionary aircraft 2011 The 747-8, Boeing's latest 747, boasts enhanced tech and efficiency 2018-2020 737 MAX Crisis The grounding of 737 MAX following crashes led to regulatory hurdles 2023 Boeing invests in sustainable aviation technology 2024 Whistleblowers raise concerns over safety and production standards. Boeing History and Evolution

4. BOEING'S GOVERNANCE STRUCTURE INCLUDES A BOARD OF DIRECTORS, VARIOUS COMMITTEES, AND KEY ROLES FOCUSED ON STRATEGIC OVERSIGHT, RISK MANAGEMENT, AND SHAREHOLDER PROTECTION. Boeing Cooperate Governance BOARD OF DIRECTORS 11 members, 91% Independent COMMITTEES Audit Compensation Governance & Public Policy Finance Special Programs Committee Aerospace Safety Committee KEY ROLES Set overall direction and culture, oversee risk management, ensure compliance with regulations, protect shareholder interests

5. Boeing – Board Of Directors Other active roles Operations & government regulations US Military International Regulations All except CEO, David Calhoun, classify as “independent” directors David L. Calhoun Director since 2009 Chairman & CEO–Boeing Caterpillar BOD Lynne M. Doughtie Director since 2021 Former U.S. Chairman & CEO, KPMG David L. Gitlin Director since 2022 Chairman and CEO, Carrier Global Corporation Lynn J. Good Director since 2015 Chairman & CEO–Duke Energy Stayce D. Harris Director since 2021 Former UA Pilot, Former IG USAF Akhil Johri Director since 2020 Cardinal Health Aerospace David L. Joyce Director since 2021 Former Pres. & CEO GE Aviation Technology Steven M. Mollenkopf Director since 2020 Independent COB Former CEO Qualcomm John M. Richardson Director since 2019 Retired Navy Sabrina Soussan Director since 2023 Chairman and CEO, SUEZ SA (French Company) Robert A. Bradway Director since 2016 Chairman & CEO–Amgen Board of Directors

6. Board of Directors Composition and Diversity

7. ANNUAL REVIEW OF REQUIRED SKILLS AND CHARACTERISTICS The Governance & Public Policy Committee reviews annually the skills and characteristics required of directors in light of the Board's current composition, evolving business requirements, and the long-term interests of the Company and its shareholders. SHAREHOLDERS INFLUENCE Shareholders play a crucial role in this process, as their votes determine the final composition of the board, ensuring accountability and responsiveness to their concerns and expectations ADDITIONAL FACTORS CONSIDERED Other factors such as independence, diversity, age and absence of conflicts of interest are also evaluated in the assessment. MINIMUM AVIATION/AEROSPACE, ENGINEERING, AND SAFETY OVERSIGHT KNOWLEDGE The Governance & Public Policy Committee shall ensure that at least three directors have knowledge, experience, and/or expertise with aviation/aerospace, engineering, and/or product safety oversight. INELIGIBILITY OF COMPETITORS AND SUPPLIERS Any person who is an employee or director of a significant competitor or supplier of Boeing is not eligible for service for election as a director. INTEGRITY, ETHICAL STANDARDS, AND LONG-TERM FOCUS Directors should have a reputation for personal and professional integrity, honesty and adherence to the highest ethical standards, and be committed to acting in the long-term interests of all shareholders. Board Composition: Selection of Nominees

8. EVALUATE CEO PERFORMANCE Review CEO's business goals and objectives, evaluate performance, and determine compensation based on evaluation. REVIEW SUCCESSION PLANNING Regularly review the company's succession plans for the CEO and other senior management, identify key qualities, and assist in developing internal candidates. ADVISE ON STRATEGIC ISSUES AND RISKS Provide strategic guidance to management on long-term issues and risks facing the company, and oversee the company's overall risk management approach. OVERSEE ETHICS AND COMPLIANCE Ensure the company's ethics and compliance program is effective, and exercise oversight over its implementation. Environmental, Social, and Governance (ESG) Initiatives Boeing's corporate governance guidelines integrate ESG considerations into the company's overall strategy, including goals for reducing environmental impact, promoting diversity and inclusion, and supporting local communities. Boeing Board: Responsibilities

9. Major Stakeholders

10. Top Individual Insider Shareholders David L. Calhoun President and CEO; : 355,223 shares; representing 0.02% of outstanding shares Stanley A.Deal Retried Chief Executive Officer of Commercial Airplanes 131,046 shares , representing 0.01% of outstanding shares 3. Theodore Colbert 89,657 Boeing shares, representing 0.01% of the company's total shares outstanding All Directors and Executive officers : 993,707 Top Institutional Shareholders Vanguard Group : 48 million shares of Boeing, representing 8 % of total shares outstanding 2 . BlackRock, Inc : 36 million shares of Boeing, representing 6% of total shares outstanding 3. Newport Trust Co: 32 million shares of Boeing, representing 5.3 % of total shares outstanding Major Holders Break Down Private Companies 0.0004% 2,121 shares State or Government 0.04% 238,138 shares Individual Insiders 0.06% 357,853 shares Employee Share Scheme 7.4% 44,267,963 shares General Public 40.7 % 243,636,463 shares Major Shareholders

11. TRANSPARENCY AND DISCLOSURE Boeing publishes its annual proxy statement and corporate governance principles, providing shareholders with comprehensive information on the company's governance practices and board composition. ACCOUNTABILITY All directors are elected annually by shareholders, and directors must receive a majority of votes to be elected, ensuring the board is responsive to shareholder concerns. SHAREHOLDER PARTICIPATION Shareholders have advisory votes on executive compensation, the ability to nominate director candidates, and the option to submit proposals for consideration at the annual meeting. BOARD OVERSIGHT Boeing has established specialized board committees to oversee critical areas such as audit, compensation, and risk management, and the board regularly evaluates its own performance. BOEING'S CORPORATE GOVERNANCE PRACTICES DEMONSTRATE ITS COMMITMENT TO TRANSPARENCY, ACCOUNTABILITY, AND ACTIVE SHAREHOLDER PARTICIPATION, ALIGNING WITH THE COMPANY'S LEGACY OF INNOVATION AND RESPONSIBLE LEADERSHIP. Shareholder Requirements

12. 2023 Board Compensation

13. Why build the 737 Max Competitive Pressure: Airbus launched a superior aircraft, threatening Boeing's market share. Market Share Preservation: Boeing needed a competing product to avoid losing business. Time and Financial Constraints: Redesigning the 737 was faster and cheaper than developing a new aircraft. Board Approval: Boeing's Board of Directors approved the 737 MAX redesign. Critical Turning Point: The Ethical and Governance

14. CEO Succession Plan ROBUST SUCCESSION PLANNING The Board maintains a long-term plan for effective senior leadership development and succession, as well as short-term contingency plans. IDENTIFYING KEY QUALITIES The Board, with assistance from the GPP Committee, identifies the qualities, skills and characteristics necessary for the CEO and other senior management positions to achieve the Company's long-term strategy. ONGOING AND STRATEGIC DISCUSSIONS The Board's succession planning activities are ongoing and strategic, with matters relating to succession being regularly discussed in meetings and in executive sessions. CULTIVATING FUTURE LEADERS Directors become familiar with, and have direct interaction with, potential candidates for key management positions through various means, such as regular business reviews, formal presentations to the Board and informal meetings and events. SEAMLESS TRANSITION Under the new leadership of Mr. Mollenkopf as independent Chair of the Board, the GPP Committee and the Board will conduct a thorough succession process for a Chief Executive Officer to succeed Mr. Calhoun.

15. History of Events: March 2019: The 737 Max is grounded after two fatal crashes. Summer-End of 2019: The Boeing CEO repeatedly promises the plane's return to service but misses deadlines. End of 2019: The CEO is removed after failing to meet the final deadline. Potential Conflict of Interest : The CEO and Chairman of the Board also served on the board of Caterpillar. Two other Boeing board members were also on Caterpillar's board. Compensation Concerns: Executive compensation at Boeing is based on comparisons with "peer companies," including Caterpillar. A board member from both Boeing and Caterpillar also sits on Boeing's compensation committee. High Compensation: Boeing board members receive $345,000 annually, placing them in the top 25% of Fortune 100 companies. 737 Max and highlights potential conflicts of interest within Boeing's Board

16. Removal of CEO as Chairman The Boeing CEO was removed from his role as Chairman of the Board in October 2019 following the 737 Max crisis. Firing of Boeing Commercial Aircraft CEO The CEO of Boeing Commercial Aircraft, who was responsible for the 737 Max program, was terminated in October 2019. Appointment of Retired US Navy Admiral to Lead Safety Committee A retired US Navy Admiral joined the Boeing Board and was appointed to lead the newly created Aerospace Safety Committee in October 2019. Replacement of CEO with New Chairman/CEO In December 2019, the Boeing CEO was removed, and the existing Chairman became the new CEO while a new independent Chairman was appointed. Boeing's Board 737 Max Corrective Actions

17. PRIORITIZING SHAREHOLDER INTERESTS Boeing's governance strategy focused on maximizing short-term shareholder returns, disregarding the interests of other crucial stakeholders like customers and employees. PREMATURE 737-MAX CLEARANCE Boeing rushed the 737-MAX certification process to outpace Airbus, despite internal reviews highlighting the need for further training and knowledge. AGENCY DILEMMA AND INFORMATION ASYMMETRY The agency problem between shareholders and executives led to unequal access to information, as the Board prioritized financial metrics over aircraft safety. VIOLATION OF CORPORATE VALUES Boeing's official values of 'Seek, Speak, & Listen' were violated as the company ignored safety warnings from engineers in pursuit of profit maximization. STAKEHOLDER INTERESTS MISALIGNMENT Boeing's focus on shareholders' interests came at the expense of other key stakeholders, including customers, regulators, and employees, leading to significant economic and reputational damages. Boeing's actions violated the Sustainable Development Goals, overlooking safety and social justice concerns. Critical Failures in Boeing's Corporate Governance and Ethical Oversight NEGLECTING SUSTAINABILITY AND SOCIAL JUSTICE

18. Critical Failures in Boeing's Corporate Governance in Risk Management KPI'S VS. KRI'S Boeing's KPIs and KRIs were in direct competition, with financial KPIs taking priority over safety-focused KRIs. The new management teams at Boeing largely ignored KRIs, fearing they would slow down output. PROACTIVE RISK OVERSIGHT The Board of Directors must play a proactive role in identifying risks that ambitious executives may have concealed. Effective management of KRIs allows the Board to detect potential hazards and take necessary actions to mitigate them. IGNORED RISK MANAGEMENT Boeing's executive and Board of Directors failed to prioritize risk management, disregarding staff concerns, stress, simulator testing outcomes, and engineer errors - all critical KRIs that could have helped prevent the 737-MAX disasters. REGULATORY RESPONSE In the aftermath of the 737-MAX incidents and resulting fines, the FAA approved reforms to the aircraft certification process and bolstered its regulatory control to ensure stronger compliance and oversight.

19. STRENGTHEN RISK MANAGEMENT Implement robust risk assessment and mitigation processes to identify and address potential safety and sustainability risks. ENHANCE STAKEHOLDER ENGAGEMENT Regularly communicate with and listen to key stakeholders, including customers, regulators, and employees, to better understand their concerns and priorities. FOSTER A CULTURE OF SAFETY Prioritize safety at all levels of the organization, empowering employees to raise concerns and creating an environment where safety is the top priority. ALIGN WITH SUSTAINABLE DEVELOPMENT GOALS (SDGS) Integrate sustainability into the company's strategy and operations, focusing on areas where Boeing can have the greatest positive impact, such as SDG 3 (Good Health and Well-being), SDG 8 (Decent Work and Economic Growth), and SDG 17 (Partnerships for the Goals). BY IMPLEMENTING THESE RECOMMENDATIONS, BOEING CAN REBUILD TRUST, ENHANCE ITS LONG-TERM SUSTAINABILITY, AND POSITION ITSELF AS A LEADER IN THE AEROSPACE INDUSTRY. Recommendations: Improving Corporate Governance and Sustainability