The chief executive who vowed to repair the tarnished reputation of Boeing on Monday fell victim to his own scandal when he was fired for conducting an affair with one of the company’s female executives.
Harry Stonecipher (68) was tempted out of retirement 15 months ago to help steady the defence and aeroplane company after it was sent reeling by revelations of misconduct in securing Pentagon contracts.
Earlier scandals had cost the jobs of the then chief executive Phil Condit and finance chief Mike Sears.
Stonecipher’s relationship with the unnamed executive came to light about 10 days ago after company bosses received an anonymous tip-off. Stonecipher was effectively tripped up by his own push to improve ethical standards at the company by making employees sign a code of conduct.
The extramarital relationship apparently began in January. The person who brought it to the company’s attention had learned of it through correspondence between the two, the firm said.
Boeing said the woman, a longtime employee, did not report directly to Stonecipher and there was no evidence she had been given any preferential treatment. Boeing also said the affair had been consensual.
Lew Platt, the company’s non-executive chairman, said the relationship showed questionable judgment.
Stonecipher is married with two children. ”The board concluded that the facts reflected poorly on Harry’s judgement and would impair his ability to lead the company,” he said. ”The chief executive must set the standard for unimpeachable professional and personal behaviour.”
But the decision to oust Stonecipher had some in Wall Street scratching their heads. Under his leadership, the Boeing share price had increased by 52% as he rebuilt bridges in Washington and tackled the slide in commercial jet market share.
Sears, the former Boeing finance chief, was last month sentenced to four months in prison for his role in the purchasing scandal that came to light at the end of 2003.
It emerged that Sears had offered a job to a United States air force procurement executive, Darleen Druyun, while negotiating a $23-billion contract for up to 100 refuelling aircraft tankers. Druyun is serving nine months in prison.
Boeing had also been bruised by allegations that it had stolen documents from rival Lockheed Martin that helped it secure a 1998 Pentagon contract for rocket launches.
Platt said: ”It’s not the fact that [Stonecipher] was having an affair — that is not a violation of our code of conduct.”
Instead he had breached a line in the code that says employees will not engage in conduct that ”may raise questions as to the company’s honesty, impartiality, reputation or otherwise cause embarrassment”.
Platt added: ”Harry was really the staunchest supporter of the code of conduct. He drew a very bright line for all employees, let everyone know that even minor violations would not be tolerated and when one does that you have to live by that standard.”
He continued: ”In my very first conversation with him he stepped up and said … he was having a relationship. You could not have expected someone to be any more open or honest.”
The company said the woman involved was still at the company and that her career would be unaffected.
Stonecipher will receive a ”standard retirement package” with no additional pay-off. – Guardian Unlimited Â