Boeing’s prioritization of profits over safety led to catastrophic consequences, including two fatal 737 MAX crashes (2018 and 2019) that killed 346 people, followed by a 2024 door plug blowout. Investigations revealed systemic failures:

Key issues

1. Culture & leadership failures:
   • Executives prioritized stock buybacks ($41.5B from 2013-2018) over safety investments.
   • CEOs Dennis Muilenburg and David Calhoun downplayed risks while earning millions.
   • Board ignored safety oversight, focusing only on financial performance.
2. Production & quality control breakdowns:
   • Rushed 737 MAX production led to flawed MCAS software and missing door bolts.
   • FAA audits found Boeing failed 37% of manufacturing control tests (2024).
   • Workers reported “Tarzan effect” fixes (jumping on parts to force alignment).
3. Whistleblower retaliation:
   • 32 OSHA complaints filed since 2020.
   • John Barnett and Joshua Dean died after exposing safety issues.
   • Engineers like Sam Salehpour reported threats for raising concerns.
4. Regulatory & legal consequences:
   • DOJ: $2.5B settlement (2021), guilty plea to fraud (2024) rejected by judge.
   • SEC: $200M fine for misleading investors about MAX safety.
   • FAA mandated operational changes after finding “disconnect” between management and workers.

Lessons learned

• Corporate governance must balance profits with safety accountability.
• Strong whistleblower protections are essential for risk mitigation.
• Internal audits should complement (not replace) regulatory oversight.

Boeing’s case remains a stark warning about the consequences of ethical failures in corporate culture.

Critical reflections for CPAs: lessons from Boeing’s failures

1. Detecting warning signs:
   How can accounting professionals recognize when an organization is compromising safety and compliance for cost reductions, and what indicators should raise red flags about such dangerous trade-offs?
2. Strengthening internal controls:
   What responsibilities do CPAs have in assessing and reinforcing internal control systems – particularly whistleblower protections and risk management protocols – to prevent systemic failures?
3. Navigating ethical challenges:
   When financial professionals observe governance failures where profit motives override safety concerns, what ethical frameworks and action plans should guide their response?
4. Implementing corrective actions:
   What procedural safeguards should CPAs recommend to ensure regulatory findings are properly addressed and accountability is enforced within organizational structures?
5. Advocating for transparency:
   How can the accounting profession champion reforms that prioritize long-term organizational integrity over short-term financial gains, particularly in safety-critical industries?

These questions underscore the profession’s vital role in maintaining the balance between financial performance and operational integrity, with Boeing’s case serving as a cautionary example of the consequences when this balance fails.