The “Resignation” of Boeing CEO David Calhoun

By Allowing Calhoun to “Step Down,” Boeing Missed a Critical Opportunity to Signal the Company is Serious About Making Changes

By Nate Johnson

Managing Director

By Nate Johnson, Managing Director

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:

• The release’s headline read: “Boeing Board Announces Dismissal of David Calhoun; Company Introduces Robust Safety and Operations Protocols.”

• In the body of the release, the company framed Calhoun’s removal as an element of its strategic plan to take significant action to curb the company’s recent issues, with a few more concrete next steps peppered in – perhaps committing to bolstering its safety team and overhauling its inspection and quality control protocols.

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.