The Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio have filed a lawsuit against Boeing's board of directors, including former chairman Larry Kellner, alleging a pattern of safety and compliance failures that have harmed the company and its investors. Represented by Attorney General Dave Yost, the pension funds are seeking accountability for what they claim is a prioritization of profits over safety and regulatory compliance. The lawsuit accuses Boeing board members of breaching their fiduciary duties by failing to properly oversee the company's safety practices. This legal action comes in the wake of several high-profile incidents, including the Alaska Airlines door plug blowout last year and the earlier 737 MAX crashes in Indonesia and Ethiopia.
Former Boeing chairman Larry Kellner, who departed the company earlier this year following the Alaska Airlines incident, is among the defendants singled out in the lawsuit. The legal filing alleges that Kellner, who served on the board's Aerospace Safety Committee since 2019, was involved in issuing materially false or misleading statements to shareholders in both 2023 and 2024. The lawsuit also claims that Kellner and other directors made false or misleading statements about the safety of Boeing's airplane manufacturing. The allegations against Kellner are particularly noteworthy given his current position as head of the safety committee on ExxonMobil's board of directors. This appointment has raised questions from shareholder advocacy groups, including the National Legal and Policy Center (NLPC), about Kellner's suitability for overseeing safety and environmental policies at another major corporation.
The lawsuit's timing coincides with Boeing's recent report of a third-quarter loss exceeding $6 billion, underscoring the financial impact of the company's ongoing safety and reputation issues. This legal action by the Ohio pension funds represents a significant challenge to Boeing's corporate governance and may have far-reaching implications for how companies prioritize safety and regulatory compliance. The case highlights the broader issue of corporate accountability and the role of board members in ensuring proper oversight of critical operations. As investors and the public demand greater transparency and responsibility from major corporations, this lawsuit could set an important precedent for how boards are held accountable for safety failures and mismanagement.
For Boeing, this legal challenge comes at a crucial time as the company struggles to rebuild trust with airlines, regulators, and the flying public. The outcome of this lawsuit could have significant implications for Boeing's future governance structure and safety practices, as well as potential financial repercussions for the company and its shareholders. As the legal proceedings unfold, the aviation industry and corporate governance experts will be closely watching for potential impacts on safety standards, regulatory oversight, and investor protections in the aerospace sector and beyond. The case serves as a stark reminder of the critical importance of safety and compliance in high-stakes industries and the potential consequences when these priorities are allegedly compromised in favor of short-term financial gains.
