Stonecipher ouster saddles Boeing with its latest ethical setback

CHICAGO: Boeing suffered another ethical setback last week after its CEO - once hailed as a harbinger of more ethical times for the military contractor - was fired for unethical behavior.

CHICAGO: Boeing suffered another ethical setback last week after its CEO - once hailed as a harbinger of more ethical times for the military contractor - was fired for unethical behavior.

Harry Stonecipher, who had rejoined the company in 2003, was forced to resign after the company discovered he had been having an affair with a female employee. The affair itself did not violate Boeing's conduct code, but directors discovered other behavior related to the affair that did, said John Dern, VP of PR.

Boeing's external messaging as it searches for a new CEO will concentrate on the strength of the company and its operating units, said Dern.

Internally, Boeing is telling employees the company takes ethical standards seriously and that no employee is beyond the scope of the conduct code.

Boeing handled the resignation announcement with its own communications staff. A release was put out at 6am CST March 7.

At the same time, a video that had been prepared over the weekend explaining what had happened was put on an employee website.

A conference call for reporters and analysts was held 90 minutes after the release went out. Boeing did not disclose who the affair had been with or exactly what Stonecipher had done to violate the conduct code because "we tried to draw a line of privacy around it," said Dern.

The female employee's name has since been disclosed by Business Week and The Wall Street Journal.

Regarding coverage of the announcement, Dern said, "I think there was a recognition that we acted swiftly and decisively." Boeing handled about 100 media calls that day.

Upon rejoining the company, Stonecipher vowed to address ethical issues that had plagued Boeing in its dealings with the US government.

Nicholas Kalm, a founder of Reputation Partners in Chicago, said that while the media will speculate on CEO candidates, Boeing's communications is "right to focus on the business. Absolutely, I would stay on that message."

He also said the company should be prepared for more details of Stonecipher's affair

to leak out.

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