Office affair leads to ouster of Boeing's CEO

Aziz, Munich/Germany

Harry Stonecipher had barely started to enjoy his retirement when he was called by Boeing shareholders in 2002 to come back to the company and take the reins again. The previous chief executive officer (CEO), Philip Condit, was forced to resign following a scandal that put Mike Sears, former finance director, in jail.

A veteran with many years of experience in the aerospace industry, Stonecipher rebuilt the Boeing reputation based on a stricter code of conduct. And nothing mirrors his achievement better than the fact that the company's shares have risen more than 50 percent during his 15-month tenure.

But those good days are over; not for Boeing, but for Stonecipher himself. The news recently broke that the Board of Directors ousted him for "having an affair with a female executive". His ouster was the outcome of an investigation started two weeks ago after an anonymous letter was received and acted upon.

After an investigative meeting lasting more than two hours, Stonecipher admitted that he had "violated his own standard", hence earning him a headline in The Financial Times describing him as a "victim to own code of conduct." But there is one more interesting aspect behind this story.

Come to think of it, it is astonishing what an anonymous letter can do in America. Boeing is a US$52.5 billion company (40 percent from commercial and 60 percent from military contracts), an annual turnover approximately the size of Indonesia's annual state budget. Given the company's magnitude, imagine how busy the executives are running the operation on a daily basis. Consider a quote from the Boeing website: "In the next 24 hours, fifteen thousand supplier in 81 countries will provide parts and services for Boeing products and the infrastructure that designs, builds, sells, and supports them."

There must be enormous amount of reports, memoranda, presentations, meetings, mail going back and forth between directors' offices (Boeing claims five million e-mail messages exchanged every day). Every piece of data and information all the way up through the corporate ladder is sorted, reviewed and refined so that the top executives only receive summarized and meaningful reports for decision-making. And yet, this anonymous letter could swim through the tide and land on the top executive desk and, more amazingly, warrant a response.

All a bit ironic as the word "cipher" means, among other things, a secret message. Stonecipher was brought down by a cipher: an anonymous, secret letter).

Was it a game of ultra-high office politics? Hard to say but it would seem to be naive to believe that it wasn't. No explanations were offered as to corporate policy in responding to the anonymous letter and how it got through to the highest level of the company. The Financial Times reported that a whistleblower had obtained a correspondence between Stonecipher and his lover and sent a package of this to the company.

Now, having an affair itself, by definition, does not violate corporate ethics. But the affair Stonecipher engaged in "showed poor judgment that impaired his ability to lead Boeing going forward". And that was the punch line that forced him to resign. So there was a mix of liberalism (having an affair is not really a problem) and puritanism (a CEO must set standards of personal behavior).

A big question still hangs in the air though: is personal integrity a matter for a leader then? And to what extent? We may remember that another affair, involving much more than merely "love correspondence" and no less than a U.S. president, did not lead to a resignation. Does this mean, contrary to popular belief, that corporate or private ethics are stronger than government ethics?

How about Indonesian leaders? How do they reflect their personal integrity in their leadership?

Had it happened in Indonesia, it is unlikely that this case would have led to a resignation. Here is the way of thinking: Alright, so Stonecipher has done something slightly unethical, but he successfully led the company to a much better condition. And he has played a major role in trying to stop Europe from allegedly subsidizing Airbus, Boeing's biggest rival (the WTO has stepped in to try to resolve the issue.

Why not order the CEO to break off the relationship, make him promise to not do it again, and move on? After all, nobody else outside the company knows about it, right? These are tough questions, and tougher still because Boeing just went through such a shocking period with scandal after scandal. But Boeing takes what it takes: under no circumstances can a CEO afford to have poor judgment, albeit in his personal life.

A lack of competent leader can make such a high level of personal integrity seem superfluous, and Indonesia has suffered from such a lack for a long, long time. Many people are embarrassed that Indonesia is always named as one of the most corrupt countries in Asia and the world, but everybody will think that it's somebody else doing it, so why bother. The only difference between those who rally against corruption and the corruptor is that the protesters have not had their chance yet. Given half a chance, everybody will do the same. Of course, there are still many honest and good people out there. Alas, are these honest and good people our leaders?

But the anonymous letter would be the weakest point here in Indonesia. We have seen how many witnesses have reported cases of bribery and corruption, regardless of the motive, and almost nothing came out it. If such open actions cannot make a difference, how could an anonymous letter?

The lesson to be learned from Mr. Stonecipher is for Indonesian leaders and society to set higher standards for professional and personal integrity and to stick with these at all costs. Even if it takes an anonymous letter.

The writer is a post-graduate student in sustainable resource management at Munich Technical University. He can be reached at aziz9672@yahoo.com.