In 2004 Boeing’s CFO, Mike Sears, offered a government official, Darleen Druyun, a lucrative job at Boeing while Druyun was still involved in evaluating whether Boeing should be awarded a $17 billion contract to build tankers for the Air Force. Boeing won the contract against strong competition from Airbus, and Druyun was subsequently hired by Boeing. Do you think the job offer may have had an impact on the Air Force decision? If you were a member of Boeing’s board, would you approve of Sears’s action? If you disapproved, what action would you take?
The Correct Answer and Explanation is:
Yes, the job offer very likely had an impact on the Air Force decision, and if I were a member of Boeing’s board, I would strongly disapprove of Mike Sears’s actions. His conduct was unethical, undermined the integrity of the procurement process, and exposed the company to legal and reputational risks. As a board member, I would call for an internal investigation, support his dismissal, and implement stronger ethics policies and oversight mechanisms to prevent future misconduct.
Explanation
Mike Sears’s job offer to Darleen Druyun while she was still in a position to influence the outcome of a $17 billion Air Force contract represents a clear conflict of interest and a breach of ethical and legal standards. Public officials are expected to remain impartial and make decisions in the best interest of the public, not in pursuit of personal gain. By engaging in employment discussions with Druyun during the contracting process, Sears compromised the fairness of the competition between Boeing and Airbus and potentially influenced the award decision through undue influence.
Such conduct not only damages public trust in the integrity of government procurement but also harms Boeing’s reputation and could lead to significant legal consequences. In fact, both Sears and Druyun were later convicted and sentenced to prison, and Boeing was forced to pay a substantial fine, further affirming the severity of the misconduct.
If I were on Boeing’s board, I would not approve of Sears’s actions. I would advocate for his immediate removal, and support legal cooperation with investigators. Furthermore, I would push for corporate governance reforms, such as stricter conflict of interest policies, enhanced ethics training, and more robust oversight of executive conduct. These steps are essential not only for restoring stakeholder trust but also for fostering a culture of integrity and accountability within the company.
In summary, Sears’s actions were clearly unethical and harmful. Allowing such behavior to go unaddressed would set a dangerous precedent and undermine both legal standards and Boeing’s long-term credibility.
