With the way litigation works, corporations will never admit blame for anything, since it greatly increases their legal risk. It's unfortunate, but their responsibilities lie with their shareholders, not the people who lost their lives on their planes.
> their responsibilities lie with their shareholders
This is the "shareholder value" theory, modern economists successfully brainwashed the population with. It became popular during the 1980s, "greed is good" times. It's just an ideology disguised as a science. The purpose and structure of modern corporation hasn't changed in the last hundred years or so. In 1950s and 1960s the public good, among others, role of corporations was wildly accepted. What changed is the ideologues who became more vicious and took complete control of the narrative.
Matt Levine's excellent Bloomberg newsletter "Money Stuff" frequently comments on this - search for the phrase "Everything is securities fraud": many reprehensible things a company does are possibly not technically illegal per se (or it's hard to prove that they are), but they do constitute securities fraud, and that's easier to prove and prosecute.
They avoid making actionable statements. In this case, the CEO did not explicitly assign blame, so it would be difficult to call them a liar. Omitting is different from lying. Using vague terminology isn't lying. So you get stuck with all this corporate talk, where they act as if they're apologizing, but won't even really say what they are specifically apologizing for.
If the CEO of a public company owns 10% of that company's shares and 90% of their new worth comes from the value of that stock, I can imagine them caring a great deal about increasing the value of the stock.
This is what people are referring to when they say "shareholder value" -- diving up the value of the stock.
I was thinking similar things. I'm plenty sure they don't have any legal responsibility to mislead and confuse people which is essentially what they are doing. They might have a legal responsibility to say we are at fault if their internal investigation is still ongoing. But almost certainly knowing they are fault and trying to placate people and distribute blame is all about greed, lack of moral and setting up a false narrative of 'duty to shareholder'.
Sure, however BA is part of the S&P500. I would wager almost every American who has retirement savings owns a chunk of BA. As well as most people in the Western world.
As much as we would love to having Boeing stock plummet, it will impact most people even if they're not aware that they own it.
Does not the majority have index fonds, which mean that a drop for BA is rather minor overall and stock money released from people selling BA stocks will then be invested in other companies on the market?
You are correct they have index funds, and the people selling off BA stock _may_ be investing in one of the other 499 S&P listed companies, or they may not be.
I know it's about litigation and looking out for themselves, but Boeing had to have been apprised of the reports and findings from multiple agencies about the circumstances of the crash prior to this announcement. Surely, some granule of awareness had to sink in for Boeing and the CEO to realize "Damn, we fucked up." One way or another, the public is going to realize Boeing seriously fucked up, whether they will admit it or not. The total dollar amount of the damage is still going to be settled in court, but there's no escaping the fact that Boeing's actions had an impact in this catastrophe. Boeing would have to be incredibly oblivious to hold a position that they had nothing to do with this.
But that's not how this whole show goes. CEOs are like robots that only act happy or serious. Go into a press conference and act all remorseful for the public, but don't ever offer a genuine apology or own up to the company's actions. Then when all the legal dust clears, the CEO can give a later update about how he is "shocked and appalled" that a verdict could possibly blame Boeing. What a joke.
People may get angry about this fact, but it really is the simple reality of an executive's fiduciary obligations. Ideally you run the enterprise in a manner that keeps the discharge of fiduciary duties within your personal moral constraints, but if you're not careful enough, you end up in this guy's shoes. And that's why they pay him the big bucks, because of such risks.
That said, it's also true that Boeing is in a boatload of trouble. This is gonna get ugly. Likely not for the CEO. I'm pretty sure his signature is not on any of the relevant paperwork. But now that this report has been released, it might be prudent for people who do have their signatures on the relevant paperwork just to consult with some legal counsel. I suspect Boeing, as a company, wouldn't hesitate to throw them under the bus.
> People may get angry about this fact, but it really is the simple reality of an executive's fiduciary obligations.
Sorry, but that's bull. Owning the mistake - and yes, that includes paying the families of the victims - and offering a serious apology combined with "that's what we will do to make sure it never happens again" would have been the best way to guarantee that Boeing as the current company will continue to exist. Right now they risk the 737 MAX being scrapped and governments around the work taking actions against the obvious regulatory shortcomings - the corruption that obviously happened, to have a plane being able to run itself into the ground based on one sensor system without any redundancies or other securities.
Now they need the US to protect them with further illegal subventions and government influence because they are too important for that country to fail. That's in no way the ideal way to follow "fiduciary obligations".
>People may get angry about this fact, but it really is the simple reality of an executive's fiduciary obligations.
With all due respect, that's Bullshit, and anyone who cares to look into the provenance of the modern concept of a corporation can see that.
A corporation is a mechanism by which people pool resources and distribute risk such that endeavors unachievable by any individual of that collective group. This privileged collective vehicle, however, was based on the principle that the existence of the corporation was providing a service or good to the benefit of the society enabling the incorporation.
As a sibling poster mentioned, the Reagan/Thatcher years ushered in "the death of Society" and the birth of the "shareholder value" meme.
A corporation does not exist without the societal framework in which it is implemented. If corporations don't take this into account moving forward, the system that put them in a position to do what they are doing may find itself under attack from without by legislators, and within by an increasingly marginalized millennial demographic.
Point being, you can't sit here and say that the only obligation executives have is to their shareholders when the entire arrangement that makes that possible is dependent on the goodwill of everyone else who isn't a shareholder.
I acknowledge my arguments may not convince a hard core "shareholder value" believer, but I'm willing to put my money in the long run on the state of corporatism in America sidling up to a line after which there isn't going to be much they have to lean on once people start realizing that shareholder/not shareholder is becoming the new social division point. Either we're all countrymen, or we're not. If corporate America pounds the "not" drum hard enough, I have no delusions enough people won't get together to bring the entire house of cards to the ground.
Your point is well received, and one would expect society to function that way, but it does not. People won't knock any house of cards to the ground unless they are starving. It's impossible to achieve anything of significance as individuals. And no organization fighting against the status quo could acquire enough resources to make a dent.
Corporations and government have hands in each others' pockets. They are protected by court systems designed in their favor, weapons which could wipe out populations in an instant, and complete control of the technology we all use to communicate.
I’m appalled by this point of view. Perhaps this is a weakness of capitalism.. primary responsibility should be to those who perished, not the shareholders.
From Boeing's standpoint, it's actually even worse than this. The families of the people who perished pose a risk to their business. The company doesn't want these people drawing attention to the incident, and they want to minimize any legal recourse. It's about finding a balance, pay them a reasonably small amount to get them to shut up and go away.
I know what you are saying and fully agree but would like to put a finer point on it: the problem is with unfettered capitalism, especially after 100 years or more of the lawyers writing the laws for the wealthy, who own the vast majority of the corps.
What we need is a balance between the entrepreneurial spirit of capitalism and governments that enforce corporate responsibility to its human workers and our communal environment. The corps have very effectively massaged the legal systems of the world into removing almost all notions of corporate responsibility. And here we are.
Corporations can't win big if they aren't exploiting some workforce somewhere. Whether it's keeping their skilled employees quiet on the shady business and anti-consumer practices through the veiled threat of job stability and thus their lifestyle, or the ones on the other side of the globe slaving away constantly to meet demands of their products or raw materials at the prices they dictate and not by the labour put into making the product.
A Japanese executive would accept responsibility honestly and commit seppuku.
I don't expect him to kill himself, but honesty seems the least we should expect in its place. Dishonesty is what caused it, and dishonesty continues dragging it out.
He should be pelted with rotten fruit whenever he show his face in public until he comes clean.
