Corporate cynicism – 01/14/2024 – Marcos de Vasconcellos

Images of a plane losing its door flap mid-flight went viral on social media and made headlines around the world. The scenes are reminiscent of action films, but they become terrifying because they took place in real life, in the United States, on the 5th, on a Boeing aircraft operated by Alaska Airlines.

Searches for the term “Boeing” on Google exploded and reached their third peak in history. Bigger than the current buzz, only when, in March 2019, another company plane crashed, in Ethiopia, and killed 157 occupants. Or in October 2018, when an accident killed 188 people in Indonesia. In all three events, the model was a Boeing 737 Max. In Africa and Southeast Asia, a Max 8. In the USA, a Max 9.

Contrary to the volume of searches on Google, the company’s shares plummeted. There was a drop of more than 12% on the New York Stock Exchange (NYSE) since the 5th. In the case of 2019, the fall in shares in the days following the accident was similar. In 2018, a little lower, around 8%.

Without that “coach” style nonsense of wanting to learn good lessons from tragedies, what has drawn positive attention in the most recent case is the company’s reaction. While in previous cases Boeing was in a game of push and shove in relation to those responsible, this time it made a point of quickly and publicly assuming the blame.

The company’s current CEO, David Calhoun, said on Tuesday (9) that the company recognizes its error and that the investigation into aircraft failures will be carried out “with complete transparency at each stage of the process.”

This is a significant change in transparency and addressing responsibility. Calhoun was not in office when the fatal accidents occurred in Africa and Asia. In 2020, however, after taking office, he told The New York Times that the pilots in Ethiopia and Indonesia were not “as experienced” as those in the USA, implying that they were also to blame for the deaths. Time and public pressure did his stance good.

Acknowledging the error “is the bare minimum,” you might think. But we are so used to corporate cynicism that this crumb becomes a good example.

We have just completed one year of publicizing the billion-dollar fraud in Americanas. Blame is thrown from one lap to another, but no one holds the rocket of responsibility. Even a Parliamentary Commission of Inquiry was organized to investigate the case. It ended without naming anyone responsible for the network of lies that caused harm to thousands of people.

Braskem, in turn, made agreements and has paid compensation to people affected by the subsidence of the ground in Maceió, resulting from its mining activity there. However, its official communications on the subject rely on euphemisms to say that people were affected by “subsidence” or “seismic shock”, as if it were nature’s fault for not supporting mineral extraction on the ground.

In Rio de Janeiro, Light, an energy concessionaire, distributes defaults and uncertainties to those who invested in its debentures, claiming that it needs to restructure its finances, as it had lost a lot of money due to the theft of electricity — the popular cat. Overnight, he noticed a lack of R$11 billion to cover his debts. As if, when the debentures were issued, less than two years earlier, it was not possible to see the problems.

Unfortunately, these are just a few examples of “no-culprit failures” we see around here. If they have the chance, they shift the responsibility to the “invisible hand of the market”.

It is worth remembering that, in addition to common sense, demanding transparency for those who want to attract investors, public company administrators are required by law to disclose any material fact that occurred in their business that could affect the share price.

Seeing a company the size of Boeing take the blame and take the reins for a serious problem is a good sign for those looking for a more solid and serious market, with the best accountability practices gaining prominence.

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