Boeing is (since 1934) incorporated in the State of Delaware.
This opinion was based on a precedent in Delaware law: In re Caremark International Inc. Derivative Litigation. The key point of which is that a Board's failure to effectively monitor Management with regard to product safety is prima facie evidence of bad faith. In other words, Boards can commit sins of omission as well as commission - and if those omissions lead to a specific loss (including shareholder value), the Board can be held responsible.
It is difficult to prove an omission, but in this era of email-trails, not as hard as it once was. The Board overall's lack of interest in safety vis-à-vis sales and production and stock value and "face" - at least until after the Ethiopian crash - is pretty well documented.
Caremark is a food service company. That case found the following deficiencies in how the Caremark Board operated. Substitute "aircaft" for "food," or "aircraft safety" for "food safety," and see where Boeing's Board comes out.
• no board committee that addressed food safety existed;
• no regular process or protocols that required management to keep the board apprised of food safety compliance practices, risks, or reports existed;
• no schedule for the board to consider on a regular basis, such as quarterly or biannually, [whether] any key food safety risks existed;
• during a key period leading up to the deaths of three customers, management received reports that contained what could be considered red, or at least yellow, flags, and the board minutes of the relevant period revealed no evidence that these were disclosed to the board;
• the board was given certain favorable information about food safety by management, but was not given important reports that presented a much different picture; and
• the board meetings are devoid of any suggestion that there was any regular discussion of food safety issues.
Boeing's Board had an Audit Committee that was supposed to evaluate and inform itself - and the rest of the Board - as to any and all risks to the company's well-being. That committee failed to supervise risks to the company's well-being due to faults in aircraft (product) safety.
Some of Boeing's Directors made documented false statements to the press and others as to what role the Board played in supervising product safety. Which may not be illegal, but can definitely be considered evidence of bad faith.
Board members have responsibilities, including: Fiduciary Duty of Care (as a representative of the shareholders, you have to pay attention and be vigilant, as well as honest) and Fiduciary Duty of Loyalty (as a representative of the shareholders, the company's value as an institution comes ahead of all other factors, including short-term finances).
I'm on a Board myself (non-profit organization) - and just last spring we had to dismiss the Board Chair/COO for failure to responsibly execute those duties of care and loyalty (engaging in personal bias). And I spent the next 2 months - improving - the organization's By-Laws to prevent a recurrence.
I read the In re Boeing opinion and checked myself against it - "yep, took care of that," "yep, took care of that," etc.