More on Boeing and Business Ethics
The more you consider Boeing’s mishandling of its trouble with the 737 MAX jet, the more lessons ethics and compliance professionals can tease out. This weekend I spent time pondering what Boeing’s decisions about safety software for the MAX say about the company’s supposed commitment to an ethical corporate culture. That led to this small tweetstorm over the weekend. Take a look, and then I have further thoughts below.
THREAD: Some #compliance and #ethics thoughts on @Boeing and the 737 MAX scandal. Boeing really stepped in it here. (1/15) #corpgov #FCPA #audit #GRC
— Matt Kelly (@compliancememe) April 20, 2019
What sticks in my mind is this @nyt article, telling how Boeing had safety feature in its software for the MAX, allowing pilots to override faulty sensor readings at heart of Lion Air & Ethiopian Air crashes. https://t.co/O3jmcgbJ1o (2/15)
— Matt Kelly (@compliancememe) April 20, 2019
That safety feature was OPTIONAL, available at premium price. U.S. airlines purchased that option. Lion, Ethiopian did not. (3/15)
— Matt Kelly (@compliancememe) April 20, 2019
Think about what that means. Boeing had a choice with that safety override feature: it could make the feature standard-issue, or sell at a premium. It chose the latter. (4/15)
— Matt Kelly (@compliancememe) April 20, 2019
So Boeing put the profit-making objective ahead of maximum safety for the flying public. That choice says something about Boeing’s corporate values. It’s a reflection of what those values are. (5/15)
— Matt Kelly (@compliancememe) April 20, 2019
We sometimes forget, when talking about corporate strategy, that *strategy is about making choices.* You focus on some objectives at the expense of others. (6/15)
— Matt Kelly (@compliancememe) April 20, 2019
So when we talk about embedding ethics into corporate strategy, we really mean ‘where ethical concerns fall in relation to other objectives, as we choose which ones are most important.’ (7/15)
— Matt Kelly (@compliancememe) April 20, 2019
Now, did Lion and Ethiopian also make a choice, to put cost-cutting above maximum customer safety? Doesn’t that say something about their corporate values too? You bet. (8/15)
— Matt Kelly (@compliancememe) April 20, 2019
But we’re not talking about Lion and Ethiopian. Their ethics mistake doesn’t excuse what Boeing did. (9/15)
— Matt Kelly (@compliancememe) April 20, 2019
Boeing’s poor ethics decision with its safety software *created the opportunity for Lion and Ethiopian to make their own poor ethics decision* with their customers’ safety. (10/15)
— Matt Kelly (@compliancememe) April 20, 2019
Boeing should not have done that. A commitment to ethics sometimes means acting in another’s best interests, even at your own expense. (11/15)
— Matt Kelly (@compliancememe) April 20, 2019
Of course Boeing did not intend to create this terrible outcome. I know Boeing #compliance staff and have always liked them. They are competent and work hard. (12/15)
— Matt Kelly (@compliancememe) April 20, 2019
But Boeing leadership didn’t appreciate how its decisions *could create conditions* that would allow this terrible outcome to happen. (13/15)
— Matt Kelly (@compliancememe) April 20, 2019
They didn’t appreciate the nuanced ways that ethics can slip to be a lower priority, and the risk for terrible consequences increases. (14/15)
— Matt Kelly (@compliancememe) April 20, 2019
That’s the lesson I see here, anyway. Would welcome your comments. /END
— Matt Kelly (@compliancememe) April 20, 2019
Answering Questions of Ethics and Duty
I’m not quite sure how best to respond to a challenge like this. An ethics and compliance officer’s job is mostly about embedding ethical awareness into employees’ routines and behaviors — by force of rules, technology, internal controls, and disciplinary policy if necessary; but fundamentally, the job is about forcing patterns of behavior.
The conundrum exemplified by Boeing and the MAX jet is different. This is about senior executives’ commitment to ethics as they develop strategy. I don’t know the proper way for ethics and compliance officers to inculcate that commitment into the executive mind if it’s not there already.
For example, are ethics and compliance officers really going to train senior executives — people far above their pay grade — about how to make strategic decisions? That seems a bit presumptuous, especially since most senior executives and board directors will believe they know more about strategic decision-making than you. In many cases, they’ll be right.
Moreover, what are an organization’s ethical duties when making strategic decisions? At what point do we move from ethics training to a philosophy class?
I keep circling back to my 10th tweet above: that Boeing’s poor ethical decision about its override software created the opportunity for Lion Air and Ethiopian Airlines to make their own poor ethical choices about passenger safety.
Was it truly Boeing’s responsibility to prevent that? Or did Boeing satisfy its ethical obligations by laying out all possible choices, including the unsafe ones, and letting the its airline customers make the poor ethical choice? (Let’s also be clear: Ethiopian and Lion did make the poor ethical choice.)
We stray into fuzzy territory here, somewhere between a compliance training course and a John Rawls textbook or an episode of The Good Place. All of it strikes me as a difficult subject for compliance officers to raise at your quarterly meeting with the board.
Regardless, that breakdown of ethical commitment in business strategy is what happened with Boeing. The statements I made above are accurate, and fair to make. Such colossal blunders — the ones that ruin millions of dollars in business investment, or cost people’s lives, or sour corporate reputation for years to come — this is where those blunders start. With murky questions about who is responsible for how much ethical duty, and whether that duty could be passed to another party.
Where do we go from here? I don’t know. Right now we’re stuck on the ethical tarmac, and I’m not sure when we’ll start moving forward again.