To: SPEEA Council Members
From: SPEEA Legislative and Public Affairs Committee
Boeing’s annual shareholders’ meeting takes place in April or May each year. Typically, one item of business is voting on proposals from shareholders. In the past, individuals and organizations have submitted proposals about Boeing’s pensions, executive compensation, corporate governance, human rights in China and other issues.
This year, AFL-CIO unions will be submitting one proposal to Boeing asking for an independent Chair on the Board of Directors, and another about political contributions.
One timely subject would be a proposal to replace Boeing’s auditor. Auditors make sure the company follows generally accepted accounting practices, which are the rules and principles used by shareholders and analysts to interpret the financial statements. Shareholders rely on auditors’ reports to understand and trust financial statements about the health of a company and to evaluate the soundness of the company’s business plan. Boeing, like all other companies, expects its auditor to be independent, and professional.
Corporate governance consultants recommend changing auditors every 5 or 10 years, to refresh the independence and perspective of the auditing function. Deloitte and Touche has been Boeing’s auditor since 1932.
Deloitte was the auditor in 1997 when Boeing shocked the financial community by closing the 737 and 747 factories for 3 months, only days after assuring investors that both programs were doing well. Deloitte was recently sued for $7 billion under claims that they had failed to detect fraud. As the 787 program scales up to full production rate, attention is turning to questions of cost and profitability.
SPEEA members operate on facts and data. We know that long-term success comes from full consideration of all available information. In business, the auditor plays a key role in assuring that shareholders have meaningful, accurate and actionable data.
It is moved that: The SPEEA Council authorizes SPEEA to prepare a shareholder resolution for the Boeing annual meeting calling for replacement of its auditor on a rotating basis, as a matter of good corporate governance.
Many SPEEA members are shareholders and a proposal from SPEEA would say that we are committed to long-term commitment to honor facts and data when making important decisions.
A new auditor may find
significant problems, which could hurt the reputation of the company.