Corporate Governance and Ethics in the Boeing Company Case Study

This finance case study analyzes the Boeing Company, focusing on the US Congressional committee report and the need for strong corporate governance and ethical decision-making to prevent deadly crashes. The assignment examines the company's lapses in adhering to corporate governance principles, including transparency and accountability, as well as ethical considerations determined by APES 110. It evaluates the application of corporate governance practices and ethical considerations with respect to regulators and societal standards, highlighting the company's focus on financial benefits over safety. The study also provides a comparison with Siemens' corruption and unethical scandals. The analysis underscores the importance of robust corporate governance structures and monitoring mechanisms for organizational compliance and success.

Finance
Individual assignment on Boeing Company Case Study
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Question 1
a. A review of the US Congressional committee report and the need for adopting a strong
corporate governance as well as ethical decision making in a bid to try and eradicate deadly crashes.
i. Corporate governance
The concept of corporate governance is a call for organizations to align their production and service
delivery strategies with national and international standards. The report is a clear revelation in the lapse to
conform to corporate governance practices that compel firms to be transparent and accountable for their
actions. Corporate governance principles require that individuals and firms practice actions that yield
maximum social benefits to the citizens and not just for organizational wellbeing. As documented in the
report, the company did not act in good faith and ended up with planes that do not meet the international
safety standards (The Age, Sunday 8th March, 2020). Moreover, as seen from the report, for corporate
governance practices to be fully implemented, all stakeholders must be actively involved from planning to
implementation stage.
ii. Ethical consideration of determined by APES 110 principles of processional practice
APES 110 codes of practice provide that professionals and business remain straightforward in their
dealings to win the trust of clients. The same goes for public servants who are expected to be fair and firm
by eliminating conflict of interest while delivering services to citizens and investors. Such officers would
exhibit professional competence and due diligence to guarantee safety of the citizens. The principle of
confidentiality was not effectively implemented in the organization as the firm concealed vital information
from the assessment teams that ended up approving its substandard products. As a matter of fact, Boeing
International neglected some simple safety procedures that led to accidents that would have been mitigated
with duty to care if the company adopted professional behavior.
b. Evaluation of the application of corporate governance practices and ethical considerations
with respect to regulator’s and societal standards:
Boeing Company suffered from self-review threat and focused on the financial benefits of the
initiative while designing the planes. This was clear when it was revealed that the administrators ignored
the opinion of their technical staff regarding safety measures. The staff had adequately reviewed the plans
and hinted that there were security issues with the model but the managers overlooked the report. Secondly,
the firm focused solely on profit generation motive of operation instead of taking a wholesome approach to
structural design. Another set of lapse was evident when the regulating authority over-trusted the company

to the extent of certifying their design without conducting thorough evaluation to ascertain the effectiveness
of the health and safety procedures of the models.
Similarly, the society expects that an organization of Boeing caliber provides all the relevant facts
that are material to their safety. Moreover, it is common knowledge that an organization puts in place
mechanisms for monitoring and evaluation by external authorities to ensure that all aspects of health and
safety guidelines are met.
c. An example of a past experience of poor corporate governance practice and ethical decision
making to build upon the contention in (1b) above:
A notable example of corporate governance failure is the international story of Siemens corruption
and unethical scandals that almost brought it to its knees in 2014. It is for these reasons that firms are
encouraged to not only adopt a robust corporate governance structure but to put in place proper
mechanisms for monitoring and evaluation to ensure compliance (NYSE 2014, May). The laws of the land
also play a critical role in organization success as far as adoption and implementation of the corporate
principles are concerned. This is further exhibited by path taken by Siemens after the scandals were
reported to the regulating authorities.

References
Siemens delisted from the NYSE in May 2014. NYSE Delisting FAQs, SIEMENS AG (May 2014),
available at: http://www.siemens.com/investor/pool/en/investor_relations/delisting_faq_en.pdf.
The Age, Sunday 8th March, 2020. Retrieved from: https://www.google.com/search?client=firefox-b-
d&q=The+Age%2C+Sunday+8th+March%2C+2020