On August 8, Kelly Ortberg took over as Boeing’s CEO, tasked with restoring the reputation of a firm once revered for its engineering prowess.  After two preventable crashes and another incident – all involving Boeing 737 MAX aircraft – passengers now say, “if it’s Boeing, I ain’t going.”  What’s more, Boeing has entered into a criminal plea agreement under which the company admits it lied to federal regulators about the system involved in both crashes and then failed to implement promised changes to its quality, safety, and compliance practices. The challenge facing Mr. Ortberg flows from two fundamental strategic communications failures.  First, Boeing was not truthful about the 737 MAX mishaps.  Then, even after Boeing admitted fault in connection with the mishaps, it failed to demonstrate and act on a stated commitment to reform its safety culture.  Regulators and the market punished Boeing severely for these failures. Credibility is everything. Credibility is essential to navigating any enforcement action, and Boeing’s plea agreement with the government can be traced directly to its failure to maintain credibility.  The plea agreement is based on a 2021 deferred prosecution agreement in which Boeing admitted making false statements to the government about the 737 MAX (Boeing made the statements in 2017, before the mishaps).  In exchange for Boeing’s admission, substantial payments, and other undertakings related to the 737 MAX crashes – including a commitment to improve Boeing’s compliance culture – the government agreed not to prosecute Boeing for its false statements.  Unfortunately for Boeing, the third 737 MAX mishap took place earlier this year and subjected the company to further scrutiny, revealing that “Boeing [had] breached its obligations under the Deferred Prosecution Agreement . . . by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations.”  Thus, while Boeing’s false statements got the company in trouble, it was Boeing’s failure to live up to its promises after admitting those false statements that got the company prosecuted, further damaging the company’s already tarnished reputation and costing the company, as well as its customers and investors, billions. Deeds, not words. Even after Boeing publicly accepted that its culture was broken – former CEO Dave Calhoun admitted as much to Congress – the company seemed adrift.  Perhaps it was because the company was waiting to find a long-term CEO capable of managing the necessary changes that Boeing did not communicate specifically what it would do to fix its culture and restore its reputation.  This led The Economist to write in July: “What to do about all this?  For a start, get cracking.” Those two sentences contain a key lesson for restoring a reputation damaged by government inquiry or any other crisis: it’s important to acknowledge a failure (which Boeing eventually did), but it’s what you do in response that matters most.  Boeing’s failure to act in response to the deferred prosecution agreement destroyed its credibility and led to its criminal plea.  Now, Boeing must pledge specific action to restore its reputation and it must do what it says under the eyes of a skeptical government, as well as nervous passengers, employees, customers, and investors, all of whom have lost trust in the company. Looking ahead. Mr. Ortberg’s initial message to Boeing addressed this point directly in a note to employees on his first day as CEO: Restoring trust starts with meeting our commitments — whether that’s building high quality, safe commercial aircraft, delivering on defense and space products that allow our customers to meet their mission, or servicing our products to keep our customers running 24/7. It also means meeting our commitments to each other and working collaboratively across Boeing to meet our goals. People’s lives depend on what we do every day, and we must keep that top of mind with every decision we make.  (Emphasis added). This was the right note to hit, but the world will be watching to see whether Boeing makes good on its promises this time around. 

Nobody wants to deal with a government enforcement action – they are disruptive, expensive, and often highly complex.  Throw into the mix the government’s growing emphasis on self-reporting – a theoretical carrot – and you have a tough decision to make on top of a challenging situation: “Do I call the government before they call me?” In either situation, the key questions are the same: “When to speak; what to say; and how to say it?”  The best responses to these questions are informed not only by legal and business strategy, but also by communications strategy.  And we believe that well-executed company responses to government enforcement actions can protect and enhance corporate reputation and are a critical complement to the overall legal strategy.  Following are some considerations that will help you navigate government enforcement actions and come out better on the other side. “Take your time in a hurry.” Some attribute the phrase, “Take your time in a hurry,” to marshal Wyatt Earp.  Regardless of whether Earp said this, it is good advice for communicating about enforcement actions that involve stakes as high as an Old West gunfight.  Thus, as soon as you hear about a potential enforcement action, you should try to learn as much as possible as quickly as possible about the action itself and the underlying facts.  As with any type of crisis, knowing as many facts as you can is critical, as the facts dictate strategy.  With this information, you can assess the legal, reputational, and other risks that the enforcement action poses and plan your next steps. This initial deep dive won’t yield all the information, and your assessment of the enforcement action may change as the matter evolves. However, a quick but informed assessment is an essential building block of a communications plan that can guide you through all the stages of the enforcement process. When to speak: timing isn’t everything (but it’s important). One of the challenges of communicating about government enforcement actions is that they can become public just about any time before the action is filed. Legal requirements – and other legal considerations, like the possible benefits from self-disclosure – often define the options for when to speak, but reputational considerations should inform your choice.  For example, early disclosure may enhance your reputation for transparency, but, if you speak too soon or with too few facts and other information, you risk causing a panic and unnecessarily harming your reputation. Experienced strategic communications firms help you assess your choices, including the reputational risks and benefits of different approaches and the timing of communications.  These firms draw upon their experience with similar matters and help you optimize your message for the moment you choose to use it, or when that moment is chosen for you. What to say: the truth shall set you free. It is impossible to overstate the importance of truth in all communications, and stating the truth implies recognizing both what you know and what you don’t know.  Thus, what you say should stick to the known facts and not venture into speculation, regardless of how reasonable that speculation may seem at the time.  Getting ahead of the facts (or not knowing all the facts) is one of the most common mistakes we see in communicating through all types of crisis situations – including government investigations – and it risks destroying your credibility to the government and to the public.   How to say it: walk in someone else’s shoes. Because your words – and even your tone – have legal and reputational significance, the law sets boundaries for how to convey your message, and strategic communications advisors use their experience to help you frame a message to your best advantage within those boundaries.  In enforcement actions, some concepts around which to frame your message are: