Boeing CFO Steps In as CEO

The company's board of directors ousted chief executive officer Harry Stonecipher after revelations about a personal relationship that ''reflected poorly on Harry's judgment.''

Boeing Co. announced early Monday morning that president and chief executive officer Harry Stonecipher resigned on Sunday. He is also leaving the board of directors.

Chief financial officer James A. Bell has been named president and CEO on an interim basis, and non-executive board chairman Lew Platt is assuming an expanded role, the company added.

Stonecipher came out of retirement after the company’s previous CEO, Phil Condit, resigned in December 2003 following the scandal that led to prison sentences for former Boeing CFO Michael Sears and former Air Force procurement official Darlene Druyun.

The aerospace giant stated the board requested Stonecipher’s resignation after an investigation into a personal relationship between Stonecipher and a female executive of the company, which was disclosed in an anonymous communication with the company 10 days ago. The investigation determined the relationship was consensual and that it influenced neither the career nor the compensation of the female.

Boeing spokesman John Dern did not identify the employee or her position, but Dern added that she did not report to Stonecipher and that she remains with the company, according to the Associated Press.

Following the investigation, the board determined that Stonecipher’s actions were inconsistent with the company’s code of conduct. “The board concluded that the facts reflected poorly on Harry’s judgment and would impair his ability to lead the company,” said Platt, in a statement. “The resignation was in no way related to the company’s operational performance or financial condition, both of which remain strong,” he stressed. “However, the CEO must set the standard for unimpeachable professional and personal behavior, and the board determined that this was the right and necessary decision under the circumstances.”

Bell, a 32-year Boeing veteran who has served as chief financial officer and as a member of the company’s executive council since 2003, will retain his CFO duties while serving as interim CEO and president. Boeing stated that Bell is not a candidate for those permanent positions.

“Boeing is in excellent shape with significant momentum due in large part to Harry’s forceful leadership,” said Bell in a statement. “We have a clear strategy that has us well positioned for future growth. Continuing his focus on execution is my top priority.”

On Friday, the Air Force lifted a 2003 ban that prohibited Boeing from bidding on new satellite-launch contracts, after the company was found possessing confidential information from rival Lockheed Martin Corp. in the late 1990s, according to The Wall Street Journal.

“We believe that Boeing has taken significant action to rectify past improprieties and to develop long-lasting integrity standards that makes them eligible to compete for government launch contracts again,” said Peter B. Teets, acting secretary of the Air Force, according to TheStreet.com.

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