News ReleaseOhio Pension Funds Sue Boeing and Former Chairman Over Plane Failures
NLPC
Why is former Boeing Chairman Larry Kellner – who led the company’s governance oversight during last year’s infamous Alaska Airlines door plug blowout – now head of the safety committee on ExxonMobil’s board of directors? That’s what a shareholder in both companies – National Legal and Policy Center (NLPC) – is asking. And now two pension funds for the State of Ohio are demanding answers from Boeing and its board members (both current and former) about the devaluation of their investment. Attorney General Dave Yost announced Tuesday that he is suing the board of directors for the Washington, DC-based jet manufacturer, “seeking accountability for a pattern of safety and compliance failures that have harmed the company and its investors.” Yost is representing the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio in the litigation, and accuses Boeing board members of breaching their fiduciary duties by failing to properly oversee the company. The lawsuit alleges the members knew “about the ongoing unsafe practices but even today fail to address them, choosing instead to prioritize profits over safety and regulatory compliance.” Among the defendants singled out by Yost is former Boeing chairman Kellner, who departed from the company under a cloud earlier this year, following the Alaska Airlines incident and other safety failures, in what CNN described as “a complete decapitation” of leadership. Among the allegations pointed out in the Ohio lawsuit about Kellner was that he: served on the board’s Aerospace Safety Committee since 2019; solicited votes from shareholders with other directors who “issued materially false or misleading statements with knowledge of their falsity or reckless disregard for their truth” in both 2023 and 2024; with other directors, “knowingly or with reckless disregard made false or misleading statements of material fact and omitted material information concerning the safety of Boeing’s airplane manufacturing…”; was opposed by proxy advisor Glass Lewis for re-election to the board in 2021 and 2022, “given his role as Audit Committee Chair during the [737] MAX Crashes” in Indonesia and Ethiopia. Yost summarizes the lawsuit against Boeing directors, including Kellner, by alleging they issued “false or misleading” statements “with knowing intent to deceive, manipulate, or defraud.” Yet today Kellner enjoys a soft landing on the board of directors for ExxonMobil, where he chairs the oil giant’s Environment, Safety and Public Policy Committee, with millions of dollars in stock awards and remuneration. This is after Boeing on Wednesday reported a third-quarter loss of more than $6 billion in the wake of the financial, reputational and litigation disaster left behind in the wake of Kellner’s failed leadership. “In the part of his career and experience which is supposed to highlight the majority of his credentials to serve in his current role on ExxonMobil’s board, Larry Kellner has been an unmitigated disaster,” said Paul Chesser, director of NLPC’s Corporate Integrity Project, an investor in both Boeing and ExxonMobil. “Exxon is not without safety and environmental failures in its history that have cost lives, injuries and destruction. How can it say with a straight face that Mr. Kellner is the best person to oversee the company’s environment and safety policies and practices?” Earlier this year in advance of ExxonMobil’s annual meeting, NLPC filed a proxy memo with the Securities and Exchange Commission, detailing Kellner’s shortcomings for the director role and asking fellow shareholders to oppose his candidacy for the board. NLPC also released a short video in May that highlighted Boeing’s mishaps under Kellner’s leadership. ### For more information or to schedule an interview with Paul Chesser, contact Dan Rene at 202-329-8357 or drene@nlpc.org. Please visit http://www.nlpc.org. Founded in 1991, the National Legal and Policy Center promotes ethics in public life through research, investigation, education and legal action. Contact Details National Legal and Policy Center Dan Rene +1 202-329-8357 drene@nlpc.org Company Website http://www.nlpc.org
October 24, 2024 09:30 AM Eastern Daylight Time
