By Allowing Calhoun to “Step Down,” Boeing Missed a Critical Opportunity to Signal the Company is Serious About Making Changes In a shock to no one, Boeing’s President and CEO David Calhoun announced last week that he will step down from his role at the end of 2024 – prompting reactions ranging from, “Well, obviously,” to, “It’s about time!” Boeing’s leadership change may have been inevitable, but its announcement wasn’t without its share of surprises. Chief among them was Boeing’s decision to allow Calhoun to claim his departure was voluntary and deliberate. When “Stepping Down…” Isn’t Really Stepping Down When a CEO “steps down” in the wake of a crisis, it is very rarely by choice. Leaders don’t like ceding powerful positions, nor do they want to leave in shame. If an outgoing CEO’s departure is described this way, it usually means that the Board issued an edict forcing the CEO out, but, as a courtesy, allowed the CEO to claim that they left voluntarily. Calhoun’s “decision” to step down was likely no exception, given the severity of the crises that unfolded under his watch. It’s unclear why Calhoun was extended this courtesy. Sometimes it’s offered to the departing CEO as an olive branch to discourage retaliation and ensure a smooth transition. In other cases, it is offered because the members of the board have close personal relationships with the CEO. Contractual obligations can be a factor too. But regardless of what drove the decision in this case, letting Calhoun take credit for his own exit was almost certainly the wrong business decision for Boeing. Why Companies in Crisis Shouldn’t Let Their CEOs “Step Down” Following a crisis, making changes to the executive team is among the most effective steps a company and its board can take to demonstrate its commitment to addressing the company’s issues. When a board affords its departing CEO the “dignity” of a resignation, the company loses a critical opportunity to communicate its dedication to taking meaningful action to get back on track. Most people will recognize that “stepped down” is code for “fired,” so the missed opportunity may seem overstated. But consider how the sweetheart framing of Calhoun’s departure limited Boeing’s ability to capitalize on the news and reposition itself for the future. Boeing’s Missed Communications Opportunity Calhoun’s exit was presented in Boeing’s press release in a matter-of-fact manner, with barely any acknowledgement of the company’s recent struggles. The rationale for his departure was provided almost entirely by Calhoun himself in an employee note hyperlinked in the release, although to call it a rationale would be a stretch – he offered nothing more than a classically vague “…[it’s] the right time for a CEO transition at Boeing.” Neither Calhoun nor the company accepted accountability for the recent issues in either communication. In fact, Calhoun and chairman Larry Kellner, who concurrently announced his own “resignation,” took up significant real estate in the release patting each other on the back for their “tremendous leadership.” The efficacy of having a “fall guy” decreases significantly if nobody actually takes the fall. Additionally, neither the release nor the note included tangible actions that the company is taking to right the ship. Instead, the note was filled with empty platitudes like, “We must continue to respond to this accident with humility and complete transparency,” and, “We also must inculcate a total commitment to safety and quality at every level of our company” – words that ring hollow after years of safety failures. But, imagine if: Positioning Calhoun’s removal in this manner would likely have made stakeholders much more willing to believe that the company is committed to turning over a new leaf. Instead, it feels like we’re rewatching a movie we’ve already seen. Back in 2019, Boeing announced then CEO Dennis A. Muilenburg’s “resignation” in a similarly sparse press release following two fatal 737 max crashes. The déjà vu may make rebuilding credibility and trust even more of an uphill battle. Boeing Has Clipped its Own Wings By allowing Calhoun to “step down” and stick around until the next CEO is appointed at the end of the year, Boeing has forfeited its ability to meaningfully repair its reputation for at least the next eight months. Given Calhoun’s track record, it’s unlikely we’ll see significant change in the company’s practices in that time – but even if Calhoun did announce a strategic plan to right the ship, the public may not consider it to be indicative of the company’s future direction. They know that the new CEO may come in with an entirely different vision. Until then – and as more details regarding the disfunction at Boeing under Calhoun’s leadership emerge in the coming months – you can expect the company to remain grounded.

August Senior Managing Director Cari Robinson and Managing Director Chris Patz speak with Ropes & Gray Partner Helen Gugel regarding their respective career changes from law to strategic communications. Cari, Chris and Helen discuss how they are finding the transition, the overlap between the two professions, and how Cari and Chris’ legal skills translate to August’s litigation and crisis communications practices.

In this edition of August’s ESG newsletter, we discuss (i) the increasingly important role that corporate legal teams have in shaping their companies’ sustainability agendas, (ii) BlackRock CEO Larry Fink’s recent rejection of the term “ESG,” and (iii) the International Sustainability Standards Board’s (ISSB) newly-issued standards for sustainability-related disclosures. We believe it is critical that companies’ legal and communications teams work together to develop scenario plans for tackling ESG issues that could arise from new legislation, regulation, and/or trending cultural movements. Such plans will better prepare companies to move quickly and confidently to address hot-button issues and avoid the moral waffling that has damaged the reputations of many businesses. With the approach of the 2024 election, companies could find themselves under intense scrutiny, making the need for a clear and forceful rapid response capability all the more urgent. As always, we hope you find these overviews and takeaways helpful and welcome your feedback at Inquiries@AugustCo.com. Legal Teams Navigate Rapidly Evolving ESG Environment  No More “ESG” for Fink? Global Sustainability Standards Provide Preview for Upcoming SEC Requirements .

In the latest edition of August’s ESG newsletter, we discuss shifting CEO perspectives on ESG, this proxy season’s surge in ESG-related shareholder proposals, greenwashing, and the future of environmental reporting. Broadly, we also note that with the resolution of the debt ceiling issue and the approach of 2024 election, the volume of political rhetoric around ESG issues will likely increase, necessitating an even greater need for strategic and disciplined communications. As always, we hope you find these overviews and takeaways helpful and welcome your feedback at Inquiries@AugustCo.com.  CEOs on ESG and Corporate Values Navigating Proxy Season Taking Down Greenwashing .

A closer look at the Writer’s Guild of America’s public campaign and the communications tactics underpinning its effectiveness The Writers Guild of America’s (WGA) powerful public campaign against the Alliance of Motion Picture and Television Producers shows no signs of decelerating as the Hollywood screenwriters’ strike enters its fourth week. WGA’s coordinated strategy to win over hearts and minds extends far beyond waving headline-grabbing posters along the picket line; its members have devised and deployed a compelling, multifaceted communications campaign that has driven sympathetic media coverage and garnered widespread support from the American public. Why have WGA’s communications been so compelling? First, WGA has thoughtfully developed a core narrative that i) distills complex entertainment industry jargon (e.g., residuals, writers’ room negotiations, etc.) into layman’s terms, ii) details the day-to-day impact on the livelihoods of the writers, and iii) outlines what’s needed to chart a sustainable path forward. This narrative is easy to understand, emotionally compelling, and seemingly reasonable from a business standpoint. Equipped with a powerful narrative, WGA has expertly communicated its position through media statements, blast emails, diaries by striking writers in Hollywood Reporter, podcast appearances, and even in a formal document outlining negotiation sticking points. As made evident by the heckling of Warner Bros. Discovery CEO David Zaslav during his commencement speech at Boston University this weekend, public opinion seems to rest with the writers – at least for now. Moreover, WGA’s impactful communications have appealed to the public’s grievances against corporate America. In a statement released on May 1, WGA asserted that the studios “have closed the door” on them and have “created a gig economy inside a union workforce.” And in an email to union members entitled “Our Momentum Grows,” WGA East Vice President Lisa Takeuchi Cullen explained how and why WGA’s position has resonated with the public: “Members’ individual stories of our broken system – of getting by on ten weeks of work a year, of residual checks amounting to pennies – are resonating with the public. They understand we are losing out on the middle-class American Dream. We are not the elite. We are just like them. We are them.” Meanwhile, the studios have remained relatively quiet throughout these negotiations, and the few responses they have issued come off as vague and defensive. In a statement, the Alliance vowed that its member companies “remain united in their desire to reach a deal that is mutually beneficial to writers and the health and longevity of the industry, and to avoid hardship to the thousands of employees who depend upon the industry for their livelihoods.” Given the overwhelmingly critical reaction from the public and media, it appears this overly corporate statement rang hollow as a nothing more than a platitude, and one that has been undermined by WGA’s compelling campaign. The Alliance also released its own formal document rebutting WGA’s version of events and defending its position in detail, which received relatively scant media attention. Will WGA’s communications make a difference? WGA’s success in garnering widespread sympathy among the public may translate to increased pressure on studios to cut a deal that addresses the screenwriters’ concerns. But the true test will be whether the public can be galvanized to take meaningful action that forces the studios to make concessions: namely, the mass cancellation of the streaming subscriptions that sustain the studios. WGA was smart to gain the public’s support early via an effective communications campaign, but given our insatiable appetite for new content, the question is: how long will the public support of WGA last?

Anti-ESG shareholder proposals and political attacks show no signs of slowing down into mid-2023. Some companies, executives, and investors are succumbing to this pressure – attenuating their ESG messaging in fear of stakeholder backlash – while others are doubling down on affirmative ESG communications. In this ESG newsletter, we explore the following themes against this backdrop: We hope you find these short synopses and our takeaways for companies and their communications teams helpful. As always, we welcome your comments and input at Inquiries@AugustCo.com.  An End to the Movement, or Just the Acronym? How and When Should Companies Speak Out? The Materiality of “S” In ESG .