Boeing directors Susan Schwab, former U.S. Trade Rep & ex-Medtronic chair Collins to retire

Moves are part of a push for new board directors following the 737 MAX crisis

Two longtime Boeing Co. directors are stepping down as the aerospace giant's board undergoes more changes in the wake of the 737 MAX crisis, according to people familiar with the matter.

The Chicago-based planemaker announced the retirement of Susan Schwab and Arthur Collins, Wednesday. The company isn't expected to immediately nominate new directors to the board, one of these people said. The directors' departure could be announced as soon as Wednesday, this person said.

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Mr. Collins, former chief executive of medical device-maker Medtronic PLC, has been a Boeing board member since 2007. Ms. Schwab, a former U.S. trade representative, has been on the board since 2010.

The departures have been under consideration in recent weeks and are part of a longer-term push to bring new directors onto the board in the aftermath of the MAX crisis, some of the people familiar with the matter said. Four members of the expected 10-member board will have been added after the accidents.

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Boeing's board has faced scrutiny from investors and U.S. lawmakers ever since two of its 737 MAX jets crashed in October 2018 and March 2019, claiming 346 lives. A year ago, the board added two new directors with safety and engineering experience as two longtime members stepped down. Since the accidents, Boeing's board has also added a permanent safety committee and split the roles of chairman and chief executive.

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The accidents led to a nearly two-year grounding of the aircraft before U.S. regulators approved it to resume passenger flights late last year. The MAX crisis, which Boeing has estimated will cost it about $20 billion, has since been compounded by the Covid-19 pandemic's blow to global air travel and demand for new commercial jetliners.

Current and former Boeing directors and executives during the MAX crisis are facing a shareholders' lawsuit that alleges lax board oversight between the crashes and their aftermath.

The suit, filed in Delaware's Court of Chancery, cites internal Boeing documents and in part claims the company's board failed to challenge then-CEO Dennis Muilenburg on the 737 MAX's safety. It also alleges current CEO David Calhoun later exaggerated to journalists the extent of the board's oversight between and in the wake of the two accidents.

The company is seeking to dismiss the lawsuit, saying it lacks merit and "presents a misleading and incomplete picture" of Boeing's actions and the board's oversight. Boeing has said the lawsuit predictably provides a distorted account of Mr. Calhoun's interviews, saying the board's extensive and active oversight was accurately explained during those media interviews.

Boeing's board is composed of recently added and long-serving directors. Mr. Calhoun has been a director since 2009 before becoming CEO early last year. Boeing's chairman is former airline executive Larry Kellner, who has been on the board since 2011.

A year ago, Boeing added Akhil Johri, former finance chief at aerospace manufacturer United Technologies Corp., and Steven Mollenkopf, chief executive of chip maker Qualcomm Inc. They succeeded longtime directors who stepped down.

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Since then, former U.S. ambassador Caroline Kennedy, a director since 2017, stepped down. She was succeeded by Lynne Doughtie, head of auditing firm KPMG's U.S. operation. Retired Navy Admiral John Richardson was named to the board in October 2019.

Two proxy advisory firms last year raised questions about board members' oversight and recommended shareholders vote against some Boeing directors to protest their handling of the MAX crisis. At last year's annual meeting, five board members faced substantial opposition, but overall won a majority in the shareholders' election.