Scandal prompts Boeing CEO's resignation
- By Roseanne Gerin
- Mar 08, 2005
Another scandal has rocked Boeing Co., and this time it involves the man brought in to salvage the company's reputation.
Harry Stonecipher, who came out of retirement to serve as Boeing's president and CEO, has resigned amid allegations of an affair with a female executive, the company said yesterday. Chief Financial Officer James Bell will serve as interim president and CEO.
Stonecipher, 68, also stepped down from the company's board of directors. Board Chairman Lew Platt will serve an expanded role in his capacity as non-executive chairman, the company said.
Acting on an anonymous tip sent to Platt and Boeing's legal and ethics officers in late February, the company's board conducted an investigation of the circumstances surrounding a personal relationship between Stonecipher and a female executive who did not report directly to him. The investigation determined that their relationship was consensual and had no bearing on the conduct of the company's business or the female executive's compensation.
The board determined that Stonecipher's actions were inconsistent with the company's code of conduct.
"The board concluded that the facts reflected poorly on Harry's judgment and would impair his ability to lead the company," Platt said in a statement, adding that the executive's resignation was not related to the company's operational performance or financial condition. Boeing posted 2004 sales of $52.5 billion and net income of almost $1.9 billion.
"The CEO must set the standard for unimpeachable professional and personal behavior, and the board determined that [the resignation] was the right and necessary decision under the circumstances," Platt said.
Stonecipher's resignation comes at a time when the Chicago aircraft manufacturer is trying to rebuild its reputation after accusations of ethics violations in recruiting former Air Force acquisition manager Darleen Druyun to work for Boeing. Druyun was convicted last year of conspiring with Boeing's chief financial officer to help the company win a multibillion-dollar airplane leasing contract.
Another executive, Michael Sears, also was fired in connection with the Druyun debacle and pleaded guilty to illegally negotiating the job.
Boeing brought back Stonecipher to lead the company after his predecessor, Phil Condit, resigned Dec. 1, 2003, because of the scandals that eventually landed Druyun and Sears in prison