Ohio Pension Funds Sue Boeing and Former Chairman Over Safety Failures

In a significant legal action, two of Ohio's largest pension funds have filed a lawsuit against Boeing and its board members, including former chairman Larry Kellner, citing a pattern of safety and compliance failures that have allegedly harmed the company and its investors. The Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio, represented by Attorney General Dave Yost, are seeking accountability for what they describe as breaches of fiduciary duty by Boeing's leadership.

The lawsuit, announced on Tuesday, accuses Boeing's board members of knowingly overlooking unsafe practices and prioritizing profits over safety and regulatory compliance. This legal action comes in the wake of several high-profile incidents, including the infamous Alaska Airlines door plug blowout in January 2024 and the earlier 737 MAX crashes in Indonesia and Ethiopia.

Former Boeing chairman Larry Kellner, who departed the company earlier this year amid what CNN termed "a complete decapitation" of leadership, is specifically named in the lawsuit. The Ohio Attorney General's office alleges that Kellner, who served on Boeing's Aerospace Safety Committee since 2019, was involved in issuing "materially false or misleading statements" to shareholders in 2023 and 2024.

The lawsuit's implications extend beyond Boeing, raising questions about corporate governance and safety oversight in the aerospace industry. It highlights the tension between profit-driven decision-making and the paramount importance of safety in aircraft manufacturing.

The legal action comes at a challenging time for Boeing, which recently reported a third-quarter loss exceeding $6 billion. This financial setback underscores the severe impact of the company's safety and compliance issues on its bottom line and investor confidence.

The case also draws attention to the broader issue of executive accountability and the potential consequences of prioritizing short-term financial gains over long-term safety and reliability. The Ohio pension funds' lawsuit serves as a reminder of the significant financial stakes involved in corporate governance decisions, particularly in industries where public safety is a critical concern.

Furthermore, the lawsuit raises questions about the vetting and selection processes for corporate board members, especially those overseeing critical areas such as safety and compliance. The fact that Kellner now chairs the Environment, Safety and Public Policy Committee at ExxonMobil, despite the allegations against him in the Boeing lawsuit, has drawn criticism from shareholder advocacy groups.

As this legal battle unfolds, it may prompt other institutional investors and pension funds to scrutinize more closely the leadership and safety practices of companies in their portfolios, particularly in high-risk industries. The outcome of this lawsuit could potentially influence future corporate governance practices and shareholder activism in the aerospace sector and beyond.

The Boeing case serves as a stark reminder of the far-reaching consequences of corporate decision-making and the critical importance of maintaining a balance between profitability and safety. As the lawsuit progresses, it will likely continue to draw attention to the challenges of ensuring accountability in corporate leadership and the potential risks to investors when companies fail to prioritize safety and compliance.