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As Boeing takes steps to get its embattled 737 MAX aircraft up and flying again, investigations and lawsuits continue to pile up in the aftermath of October’s Lion Air Flight 610 crash and March’s Ethiopian Airlines Flight 302 accident, taking a total of 346 lives. The crisis has caused frustrated stakeholders and corporate governance experts to question both the makeup of the board, and how they’re responding— placing a collection of people who are used to operating in inner sanctums under intense scrutiny and pressure.

The main question: Is the board at least partially to blame?

“By virtue of the fact that this company has ended up where it is, there is something wrong with the board, says corporate governance expert Nell Minow, Vice Chair of ValueEdge Advisors. “At the end of the day, the buck literally stops with them.”

A board of directors exists to make sure a corporation is being managed properly. Before the Enron meltdown era and the financial crisis of 2008, corporate boards were known to be cushy, self-perpetuating bodies that functioned like a club rather than an overseer. Much has changed since then as shareholder rights advances have brought more independence, fewer perks, and more oversight.

Boeing’s board is hardly a paragon of corporate governance. According to performance analytics research firm MSCI, which ranks the quality of governance, Boeing scored 5.4 on a scale of 1-10. Based on that assessment, Boeing’s board falls in the bottom third of S&P 500 companies. Yet Boeing board members get plum pay. An Equilar study conducted last month on the Fortune 100, found median pay for Boeing directors was $346,000, which ranked as the 23^rd highest. Median for all directors in the Fortune 100 was $318,675. (Boeing did not respond to a request for comment.)

“We’re looking at an average governance structure, says Ric Marshall, executive director at MSCI. “Even with the best companies, performing really well with great profit margins and great growth, a weak board is going to struggle when that company runs into a crisis situation. And that’s what we’re looking at here.”

Boeing’s Board currently stands at 13 directors—on the larger side of S&P 500 companies, according to MSCI. The average is 10.75 directors, but approximately 80 companies in the S&P 500 have 13 or more. The larger the board, so the thinking goes, decision-making becomes more difficult and less nimble.

A more detailed look reveals some concerning details around Boeing’s board composition. “This looks like a board that is right out of 1999 instead of 2019,” says Minow, who owns shares of Boeing stock. “It’s as though the reforms and the additional scrutiny and the best practices of the last 20 years kind of passed them by.”

Board Interconnections

Three Boeing directors sit on the board of Caterpillar: Boeing’s lead director, David Calhoun, who is also the lead director of Caterpillar, Boeing’s CEO and Chairman Dennis Muilenburg, and Susan Schwab, a professor at the University of Maryland School of Public Policy and former U.S. Trade Representative in the second Bush Administration. Two of Boeing’s directors sit on the board of Marriott International: Lawrence Kellner, former CEO and Chairman of Continental Airlines and Susan Schwab (who, by the way, also serves on the FedEx board).

Why does this matter? These overlaps are what corporate governance experts consider “soft” objectivity issues. “Any cross relationship is a problem because it interferes with objectivity,” says Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.

Boeing states in its proxy that 12 of 13 directors are independent, in line with New York Stock Exchange independence criteria along with other supplemental standards. Only Muilenburg, Boeing’s CEO and Chairman, is deemed an insider. And technically, they’re correct, says Elson. But there’s a difference between a technical definition and an objective assessment. “Coziness and objectivity are related. The closer you are, the harder it is to step back and make the hard decisions because of those relationships.”

Strong Ties to Washington

Four of the 13 Boeing directorships are currently occupied by former government officials:

Edmund Giambastiani Jr., former Vice Chairman of the Joint Chiefs of Staff, the second highest ranking officer in the military before he retired in 2007 joined Boeing’s board in 2009.
Susan Schwab, who joined the board in 2010, was George W. Bush’s main trade adviser and negotiator from 2006 to 2009.
Caroline Kennedy, a director since 2017, was the former ambassador to Japan during the Obama Administration.
And Boeing’s newest director elected last month is Nikki Haley, former governor of South Carolina and President Trump’s ambassador to the United Nations until she abruptly resigned last year. While governor, she provided incentives in 2013 for Boeing to expand its factory and opposed union organization. (Kenneth Duberstein, a former Chief of Staff in the Reagan White House, retired at the annual meeting this year.)

“Nikki Haley strikes me as an odd choice to add to the Boeing board at this point of time., says MSCI’s Marshall. “You have to imagine that they are very concerned about their ability to trade globally.”

Another warning sign for Elson is that Kennedy, scion of a famous political family, and Haley are political celebrities. Hiring board members with strong name recognition is viewed with suspicion by corporate governance experts. Notably, both of these directors were referred to the Governance, Organization and Nominating Committee by other independent directors, rather than by a third-party search firm, which is considered a better practice for achieving board objectivity than a good word from another director.

Says Elson: “The board is there to monitor management, pure and simple. You need skill sets to do so. In an aerospace company, do either [Kennedy or Haley] have those necessary skills?” What about the diplomatic and government experience they bring to the company? “Hire them as a consultant,” he says. “They’re there to make sure management does the right thing. They’re not there to provide services.”

The Right Expertise

Companies that operate in an industry where safety is a major issue—mining, chemicals, autos—benefit from having board members with a background in safety says MCSI’s Marshall.

Determining who on Boeing’s board has those skills isn’t spelled out. Despite the company’s references in public to safety being a priority, the only reference to “safety” in the company’s most recent proxy are the admission policies for shareholders of record to attend the annual meeting.

Best guess for the slate of directors who might have relevant safety expertise? Robert Bradway is the Chairman and CEO of drugmaker Amgen. Art Collins was the former Chairman and CEO of medical device maker Medtronic. David Calhoun used to be the chief executive of GE Aircraft Engines (as a side note, former Boeing Chairman and CEO Jim McNerney who was in charge when the 737 MAX was conceived also used to be the boss at GE Aircraft Engines).

Current Boeing Chairman and CEO Dennis Muilenburg came up through the ranks of Boeing as an engineer. And Lawrence Kellner is the former Chairman and CEO of Continental Airlines. As head of the audit committee, Kellner was technically responsible for the safety risks. In fact, shareholder advisory firm Glass Lewis recommended voting against Kellner in the most recent ballot, citing that “the audit committee should have taken a more proactive role in identifying the risks associated with the 737 Max 8 aircraft.” ISS’s proxy analysis recommended voting for all audit committee members including Kellner, but “with caution.” Kellner was re-elected.

“When you engage in a project like that, you would expect a lot of tough questions from the board,” says Elson. “There are a lot of engineering questions, and that’s why you would want people on the board who have some specialized knowledge to monitor it.”

Boeing Chairman and CEO Muilenburg recently gave some indication of who on the board has safety expertise when he asked the board last month to form a committee to “confirm the effectiveness of our policies and processes for assuring the highest level of safety on the 737-MAX program.” The committee is comprised of former Allstate chief exec Edward Liddy, former Joint Chiefs of Staff vice chairman Giambastiani, Amgen’s Bradway, and Duke Energy Chairman and CEO Lynn Good.

They were looking after the company when it fell into crisis. It remains to be seen if they’re the people who can pull Boeing out of this mess.