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Boeing board loses its last Northwest tie

By Drew DeSilver
Seattle Times business reporter

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The board that has taken control of Boeing from Phil Condit has many fine qualities, observers say: diversity, independence, experience.

What it doesn't have, for the first time in the aerospace giant's 87-year history, is a Northwest connection.

Related stories · Board loses its last NW tie · Condit steered company to be No. 2 · No sizzle for Boeing's shares · 2003 wasn't a good year · New CEO backs 7E7 PROFILES: · Condit liked in community · Stonecipher to rule with 'soft touch' · New chairman a 'straight shooter' STEPHEN DUNPHY: · Stonecipher a bad choice REACTION: · Statement to employees · What people are saying

Condit, who started his career with Boeing in 1965 as an aerodynamics engineer on the Supersonic Transport team, was the last board member with Northwest ties. As recently as 1997, fully half of Boeing's directors either worked for the company or led other prominent businesses in the region.

The changes in the makeup of Boeing's board reflect the company's evolution in the past decade: from a Seattle icon firmly identified with passenger jets to a Chicago-based global player in fields from military aircraft to satellites and, until recently, commercial finance.

"Back then, you might have needed people who could decide between producing in Renton or Snohomish County, not between Japan and the United States or between the Southeast and the Northwest," said Don Rutter, senior portfolio manager with Wentworth, Hauser and Voilich in Seattle.

"You need to get leaders with an outlook and perspective that is global, whereas in previous generations you might be more provincial."

Boeing's current board Lewis Platt, chairman: former chairman and CEO, Hewlett-Packard John Biggs: former chairman and CEO, TIAA-CREF John Bryson: chairman and CEO, Edison International Kenneth Duberstein: former White House chief of staff Paul Gray: former president, Massachusetts Institute of Technology John McDonnell: former chairman, McDonnell Douglas W. James McNerney Jr.: chairman and CEO, 3M Rozanne Ridgway: former assistant secretary of state for Europe and Canada John Shalikashvili: former chairman, Joint Chiefs of Staff Harry Stonecipher: CEO of Boeing

As a Fortune 500 company and component of the Dow Jones industrial average, Boeing has long been a premier Northwest company, and its board was a magnet for executive talent from across the region.

Ten years ago, for example, the dozen board members included George Weyerhaeuser, chairman of the namesake timber company; Charles Pigott, Paccar's chairman and CEO; John Fery, chairman and CEO of Boise Cascade; and Stanley Hiller Jr., aviation pioneer and CEO of Spokane-based Key Tronic, as well as Condit and Frank Shrontz, then chairman and CEO.

But before long, the board would be reshaped by retirements, the 1997 merger with McDonnell Douglas, and, in reaction to fierce competition from Airbus, an increasing reliance on the defense business.

The McDonnell Douglas merger brought four of that company's directors onto Boeing's board, including former Chairman John McDonnell and former CEO (and now Boeing CEO) Harry Stonecipher. Shrontz and Hiller had retired; Weyerhaeuser left in 1999, after reaching the mandatory retirement age of 72. Pigott followed in 2001 and Fery the next year.

In their place came directors with ties the new Boeing found useful: John Shalikashvili, retired chairman of the Joint Chiefs of Staff; Kenneth Duberstein, White House chief of staff under President Reagan; and W. James McNerney Jr., chairman and CEO of 3M and former head of General Electric's aircraft-engines division.

On a board where long tenure had been the norm (Weyerhaeuser served 37 years, Pigott 29), six of the 10 current members have come on since the 1997 McDonnell Douglas merger. Lewis Platt, the former Hewlett-Packard CEO who is Boeing's new chairman, was elected to the board in 1999.

For most of the past three decades, the offices of board chairman and CEO have been held by the same man. With the naming of Platt as chairman and Stonecipher as CEO, those two offices have been formally separated — something corporate-governance advocates generally support.

Despite Boeing's recent troubles, the board generally gets high marks from outside observers.

"They have one of the most impressive boards that I'm aware of," said Paul Nisbet, a veteran aerospace industry analyst with JSA Research in Newport, R.I. "It's a good board, and the actions they've taken in the past couple of weeks are evidence of that."

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com

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