Ed Markey To Boeing CEO: 'Do You Agree That It's A Problem' That Board Has No Worker Representative?

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During a Senate Commerce Committee hearing last week, Sen. Ed Markey (D-MA) asked Boeing CEO Kelly Ortberg about the lack of engineer or other labor representation on the company's board of directors.  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript   Stay Connected Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com

Transcript

00:00Thank you, Mr. Chairman, very much. I first want to offer my deepest condolences to the

00:05families of the victims of the Boeing crashes who are here today. Thank you for being here.

00:11And we're going to remember your family members every day that we're working on these issues.

00:19Your courage in fighting for a safer aviation system is inspiring, and it is going to make

00:29our committee accountable to you to make sure that we do the work that you want to see put

00:36in place for every family that flies in our country and around the globe. So I'm very

00:41grateful for your incredible work on these issues, and thank you for being here.

00:46Mr. Ortberg, thank you for being here today and your work over the past several months

00:51to improve Boeing's safety culture and improve lines of communication with workers. I want

00:57to discuss that safety culture and the importance of labor representation in key engineering

01:04decisions. So I want to get straight to the point. Mr. Ortberg, does Boeing currently

01:10have a single representative of workers on its board of directors?

01:16No, sir.

01:19Do you agree that it's a problem that the engineers and aerospace professionals responsible

01:25for designing and manufacturing the planes are excluded from boardroom decision making?

01:33Senator, as I mentioned, we have a process where we do have the union membership come

01:40and meet with our aerospace safety committee of our board of directors on an annual basis

01:46to discuss with the board any issues that they see, whether they're safety related or

01:51any other related issues. They also have access to me and the management of the organization.

01:57Yeah. Well, again, I think that all of the communication should be much more frequent

02:03and direct, and that's why the board of directors is such a focal point, because obviously you

02:12and the other executives have to deal with the board of directors on an ongoing basis.

02:16In Boeing's 2025 proxy statement, it identifies seven directors with expertise in safety.

02:23So let's take a closer look at those directors with supposed safety expertise.

02:29One board member with, quote, safety expertise was up until her retirement yesterday the

02:35CEO of Duke Energy and was previously a senior partner at Arthur Anderson, the accounting

02:41firm indicted following the Enron scandal. And another board member with, quote, safety

02:48expertise is the CEO of a bio-farmer company who previously served on the board of directors

02:55of Norfolk Southern and spent nearly two decades at Morgan Stanley. Mr. Ortberg, in your view,

03:03do those board members have, quote, safety expertise?

03:08Senator, those board members provide a very, very good input on safety. Now, the safety

03:14is not aerospace safety, granted, but for us to be able to learn on how pharma treats

03:19safety is very interesting to have board members who can provide different perspectives on

03:27how they treat safety in their different industries. Clearly, the energy industry, how they treat

03:33safety is very important to their business. And so we view having a diverse set of inputs

03:40into that helps us think through and benchmark what are other people doing in this area to

03:45see if there's better ways for us to do it. In my opinion, using that as the criteria,

03:52Duke Energy or bio-pharma makes every person in America a safety expert. They could bring

03:57the perspective of their industry into your boardroom. And I just think that that's absolutely

04:05not accurate, that there has to be a particular expertise about the aerodynamics that are

04:16at the heart of your industry, and that's a very, very specialized kind of safety knowledge.

04:23So there's no way that these board members should qualify as safety experts any more

04:30than any other industry should. And I recognize that Boeing has added a couple of individuals

04:38with real expertise and experience flying planes and overseeing important organizations

04:43over the past few years, but Boeing's board still includes numerous financial professionals

04:50and no representatives from its workforce, you know, financial engineering and real engineering.

04:58Never the twain shall meet, just two different concepts altogether. So let me address this

05:05from a different perspective. The FAA has delegated authority to Boeing to conduct certain

05:10safety and compliance oversight on its design and manufacturing processes. In return for

05:17that delegation, the public should be confident that Boeing is prioritizing safety at all

05:23levels of the organization. But without representation of workers on its board of directors, Boeing

05:29is still flying blind because you don't have the workers there on the board giving the

05:36insights that the board should hear about whatever safety defects are potentially going

05:45to rise. And again, the board should not be shielded from hearing this directly. So

05:50Mr. Ortberg, do you agree that companies like Boeing that have been delegated, you've been

05:58delegated the oversight authority by the FAA. You're given essentially a take-home exam

06:05that you shouldn't include representatives of the workers on the board of directors to

06:11make sure that you're hearing their voices on an ongoing basis.

06:16Senator, at every board meeting, we have an aerospace safety committee meeting that goes

06:21through all safety-related issues. That input comes from anywhere in the company, including

06:27our labor workforce. So I do believe that the message is coming through. I think the

06:34message is analyzed, and the board takes it very, very seriously.

06:41Well, from my perspective, that's not enough. That the board members themselves should be

06:48hearing from a worker with expertise in safety issues. So they're hearing it directly in

06:55every board meeting what the concern is that workers may have. And I think it's a fair

07:01trade, to be honest with you. Boeing receives some authority to self-regulate while creating

07:07structures on its board to ensure that it is prioritizing safety and not profits. And

07:13that's why today I am introducing the Safety Starts at the Top Act, which will require

07:18major aerospace manufacturers that have been delegated regulatory oversight from the FAA

07:26to include multiple labor representatives and safety experts on their board of directors.

07:32Safety must start at the top. And the top is Boeing's board of directors. Safety must

07:40be in the room. Expertise must be in the room. And I'm looking forward to working with my

07:46colleagues to ensure that that kind of representation is on the board. And I thank you, Mr. Chairman.

07:54I thank you, Mr. Chairman, for your indulgence.

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