A shareholder has advised the Company that he intends to present the following resolution at the Annual Meeting. In accordance with applicable proxy regulations, the proposed resolution and supporting statement, for which the Board of Directors and the Company accept no responsibility, are set forth below. Approval of this proposal would require the affirmative vote of a majority of the outstanding shares of common stock present in person or by proxy and entitled to vote at the Annual Meeting.
RESOLVED: The shareholders request that Boeing take the necessary steps to amend the Boeing governing instruments for an outside independent Lead Director. This will create independent oversight of management to improve Boeing performance and prevent surprise $2.6-Billion ($2,600,000,000) business reversals.
Proponent's Supporting Statement
This is a short list of many concerns to shareholders, employees and customers that call for heightened Management & Board of Directors' accountability, vigilance and performance:
Boeing is stuck with trying to accomplish 4 tasks simultaneously: train more than 30,000 new employees, double production rates in a very short time, fundamentally change the way it builds aircraft, and deal with the McDonnell Douglas and Rockwell acquisitions.
A lawsuit (filed in federal court in Seattle on behalf of Boeing shareholders) charges Boeing executives allegedly concealed production problems to maintain Boeing's stock price, before completing the McDonnell Douglas merger.
NASA chief Daniel Goldin said Boeing has a $196-Million ($196,000,000) overrun on work completed on the international space station. Goldin said Boeing's performance is "less than stellar."
The California Public Employees' Retirement System (CalPERS) recommends an outside independent lead director in its draft of U.S. Corporate Governance Principles. CalPERS is a leader in advocating effective corporate governance principles.
According to CalPERS — Independence is the foundation of accountability. To instill independent leadership CalPERS recommends that:
When the Chairman of the Board is also the Chief Executive Officer (like Boeing), the board designates an independent outside director to coordinate with other independent directors to:
Shareholders can express concern on Boeing's surprise $2.6-Billion ($2,600,000,000) reversal during a tremendous industry boom, by not voting for the Directors. Withholding as little as 10% of the vote will convey a powerful message that the shareholders expect improved corporate performance, profitability and timely notification of the state of Boeing's business.
ADOPT A PERMANENT POSITION OF INDEPENDENT LEAD DIRECTOR to ensure that Boeing will profit from its surge in airliner orders.
YES ON 7
Board of Directors' Response
The Board of Directors does not believe that establishment of the position of "Independent Lead Director" would enhance either its independence or its effectiveness. The Company has a long history of independent leadership by its Board of Directors. Independent directors who are not present or former employees of the Company have constituted the majority of the Company's directors for 25 years. During the last 20 years, when the size of the Board has ranged from 11 to 14 directors, there have never been more than four directors serving on the Board at the same time who were current or former employees of the Company. Currently, 11 of the Company's 13 directors are independent of the Company. No directors who are employees serve on any of the Board's committees. Each of the Company's independent directors brings to bear substantial experience in areas relevant to the Company's business, including service on other boards of directors.
The Board of Directors believes that it has the necessary power and authority to request and obtain information from management and to retain outside consultants, where appropriate, in order to address "sensitive" issues. Each committee of the Board has its own charter. As more specifically discussed in the Compensation Committee Report on Executive Compensation, the independent Compensation Committee of the Board, with input from the entire Board, plays an active role in evaluating the performance not only of the Company's Chief Executive Officer but of all the Company's executive officers. The Board has the flexibility to elect the most appropriate director to the position of Chairman of the Board and believes that the Chairman, with input from the Board, should set the agenda for meetings of the Board.
The Board of Directors believes that its current composition and structure provide for appropriate oversight of management and that each non-employee director provides valuable insight and advice. The Board does not believe that any significant purpose is served by the imposition of a strict rule creating the role of an Independent Lead Director, potentially at odds with the role of the Chairman of the Board. The Board therefore believes that the creation of the position of Independent Lead Director would not be in the interest of the Company's shareholders and that the structure of the Board, given its continuing independence from the Company's management, is best determined by the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS