Boeing has split its CEO and chairman roles, demoting Dennis Muilenburg on the board of directors, and giving the chair seat to the company’s leading independent director, David Calhoun, in the wake of the 737 MAX fiasco.

The move by Boeing’s board of directors was announced Friday evening, Oct. 11, after stock markets closed regular trading.

“The board said splitting the chairman and CEO roles will enable Muilenburg to focus full-time on running the company as it works to return the 737 MAX safely to service, ensure full support to Boeing's customers around the world, and implement changes to sharpen Boeing's focus on product and services safety,” according to a Boeing statement. The company said the decision is the latest of “several” actions to strengthen the company's governance and safety management processes.

Along with staying CEO and president, Muilenburg will remain a director on the board. It is unclear how long Calhoun would serve as chairman of the board, and whether the decoupling sets up further changes, such as a search for a new chair.

“The board has full confidence in Dennis as CEO and believes this division of labor will enable maximum focus on running the business with the board playing an active oversight role,” Calhoun said. “The board also plans in the near term to name a new director with deep safety experience and expertise to serve on the board and its newly established Aerospace Safety Committee.”

Muilenburg in the statement concurred with the move. “I am fully supportive of the board’s action,” he said. “Our entire team is laser-focused on returning the 737 MAX safely to service and delivering on the full breadth of our company’s commitments.”

The decoupling of chairman and CEO office-holding is relatively rare in public corporations, where there is a predilection toward empowering a strong individual to lead both daily management and long-term strategy. Indeed, Muilenburg in April survived a shareholder challenge to his then-combined roles.

“I’m very focused on safety going forward,” the 34-year Boeing employee said at the time. “I’m strongly vested in that, and my clear intent is to continue to lead on the front of safety, and quality, and integrity.”

But industry insiders tell ATW that talk had increased lately about the need to make a change at Boeing. Expectations were for a transition next year—as the MAX issue stemmed from a strategic failure by the company to execute on a key revenue-generating program. Boeing is plagued with other challenges, too, including in its defense and space programs, although none rose to the level of subduing shareholder returns as the MAX has this year.

Boeing will report third-quarter results Oct. 23 and could announce further charges as major airline customers recently pushed out their own return-to-service expectations for the MAX to January. The Chicago company already has unveiled billions of dollars of charges to its earnings because of the troubled narrowbody.

Several analysts recently lowered their price targets on Boeing stock. Besides the MAX, Boeing faces challenges on the US Air Force KC-46A aerial refueling tanker and NASA’s Orion program, and fears are growing over challenges in the widebody markets, especially with ultra-important customer China.

“We also note reports around quality shortfalls on non-MAX Boeing Commercial Aircraft programs,” Credit Suisse analysts said Oct. 10. “Combined with the execution/quality issues at Boeing Defense and Space, we do wonder if Boeing has been too aggressive with cost-cutting in its margin drive.”

Bank of America Merrill Lynch analyst Ron Epstein made his own critical comments Oct. 3. “It feels a bit like the movie ‘Groundhog Day,’ where the protagonist wakes up to relive the same day over and over again,” he said.

Michael Bruno/Aviation Week michael.bruno@aviationweek.com