Risk & Compliance

Boeing Must Hire Ethics Watchdog

Orders came down from the Air Force, which is negotiating a settlement with the company.
Stephen TaubMay 6, 2004

Boeing, which is being investigated for alleged conflicts of interest in doling out a major defense contract, has hired an independent ethics watchdog at the insistence of the U.S. Air Force, according to the Wall Street Journal.

The Air Force demanded that Boeing hire a special compliance officer as part of a larger administrative settlement under negotiation, said the Journal, citing people familiar with the details.

The new watchdog, who will oversee the aircraft maker’s reorganized ethics-compliance programs, will report to both the U.S. government and Boeing, added the paper.

At Boeing’s shareholder meeting on Monday, chairman Lew Platt acknowledged that the company suffered “a crisis of confidence involving serious ethical lapses and damage to the company’s reputation” in 2003, according to the Associated Press.

At the meeting, 58 percent of shareholders supported a non-binding resolution calling for the annual election of directors. In addition, 59 percent of shareholders voted to allow resolutions to be adopted with majority approval instead of a three-quarters vote, added the AP.