What can European companies learn from Boeing?

By Wim Vandekerckhove, Professor of Business Ethics, EDHEC Business School, France.

The author dedicates this blog to the memory of John Barnett and Joshua Dean.

It is hard for anyone not to have noticed Boeing’s deteriorating reputation over the past five years. The American airplane manufacturer once heralded for its engineering professionalism started to falter with continued technical and managerial malfunctioning. Then, things got out of hand when in October 2018 a new 737-MAX-8 crashed, killing 189 people. Only five months later, in March 2019, another place of the same model crashed, leaving another 157 people dead. Authorities around the world grounded all 737-MAX-8’s, triggering huge production and delivery delays.

Commentators have argued that a sales maximization tone-at-the-top replaced professional engineering values, and that too much self-regulation has impeded the company’s safety ethos. These might be very context specific factors but what stands out for all of us to learn from is, how Boeing messed up its own speak-up culture.

Boeing was charged with fraud conspiracy but entered a Deferred Prosecution Agreement in January 2021. One of the things it had to do to avoid further prosecution was to get its internal whistleblowing into shape. In 2023 an Expert Panel was put into place to review the extent to which Boeing’s new Safety Management System (SMS) promote or foster a safety culture. The Expert Panel published its report earlier this year. Three of the most important findings the Expert Panel arrives at include: 1) that there is a disconnect between senior management and other workers on safety culture, 2) that the way the system operates still leaves room for retaliation to occur against whistleblowers, and 3) that safety related messages are not implemented across the entire company. Let’s look at these a bit more closely. What lessons can we draw?

First, the Expert Panel find that content in documents that circulated at top-level is not translated into terms and descriptions used most often at working levels of various functions. SMS manuals described roles and responsibilities, but there is a lack of effective guidance that translates the company’s SMS expectations into each worker’s role. The lessons for us here is that an effective speak-up culture is everyone’s business and we need to put effort into making everyone understand what that means in everyday practice. The EU Whistleblowing Directive (2019/1937) requires every entity of 50 workers or more to develop capacity and know-how for receiving and following-up on reports of wrongdoing. The ISO 37002 standard provides guidance on what that means and what that looks like for different organizational functions.

Second, the Expert Panel found instances where managers that have oversight of employee performance evaluations, pay decisions, and disciplinary sanctions, also had mandates to investigate safety concerns. This means it is possible that a manager investigates a report within their own reporting chain. Obviously, this makes workers hesitate to report concerns for fear of retaliation. A lesson we know all too well already, yet a hard one to learn, it seems. The ISO 37002 standard provides guidance to ensure impartiality in how reports of wrongdoing are handled. The EU Whistleblowing Directive insists on measures to ensure confidentiality for whistleblowers, including data management requirements.

Third, the Expert Panel finds there is a lack of feedback and organizational learning. Workers who report a concern through the speak-up channel are not consistently informed of the outcome of their report. Even when such reports result in corrective actions by the company, these changes are not communicated within the division or companywide. The lesson to draw here is that an effective speak-up culture cannot come about without listening and learning. The EU Whistleblowing Directive requires an initial acknowledgement to whistleblowers within seven days and feedback within three months. The ISO 37002 standard goes further and provides concrete suggestions as to how feedback can be given in a meaningful and legitimate way. It also suggests specific moments for organizational learning from reports of wrongdoing.

Do you want to know how well your company’s internal speak-up channel aligns with the ISO 37002 norm and the EU Whistleblowing Directive? The BRIGHT project is currently developing SUSA, a free online tool to self-assess your Speak-Up culture along with a guidance package. Sign up for news feeds below and we’ll let you know when it’s out for you and everyone.

This post is part of the project 101143234 — BRIGHT — CERV-2023-CHAR-LITI, founded by the European Union