In a significant legal challenge to one of America's largest aerospace manufacturers, Ohio Attorney General Dave Yost has launched a lawsuit against Boeing's board of directors, including former chairman Larry Kellner. The suit, filed on behalf of the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio, accuses the board members of breaching their fiduciary duties by failing to properly oversee the company's safety practices.
The lawsuit alleges that Boeing's directors were aware of ongoing unsafe practices but chose to prioritize profits over safety and regulatory compliance. This legal action comes in the wake of several high-profile incidents, including the Alaska Airlines door plug blowout and previous 737 MAX crashes, which have severely impacted Boeing's reputation and financial performance.
Former chairman Larry Kellner, who recently left Boeing under controversial circumstances, is specifically named in the lawsuit. The allegations against Kellner include his role on the Aerospace Safety Committee since 2019 and claims that he, along with other directors, issued materially false or misleading statements to shareholders in 2023 and 2024.
The Ohio lawsuit's timing is particularly noteworthy as it coincides with Boeing's recent report of a third-quarter loss exceeding $6 billion. This financial setback underscores the severe consequences of the company's alleged safety and compliance failures.
This legal action raises critical questions about corporate governance and accountability in the aerospace industry. It highlights the potential long-term consequences of prioritizing short-term profits over rigorous safety standards and transparency. For investors, including large pension funds, the case underscores the importance of robust oversight and the potential financial risks associated with lapses in safety practices.
The lawsuit also draws attention to the broader implications of corporate leadership decisions on public safety and investor confidence. As the case unfolds, it may set important precedents for how boards of directors are held accountable for their roles in overseeing critical aspects of company operations, particularly in industries where public safety is paramount.
