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What role does Southwest Airlines’ board play in fixing the holiday meltdown?

The board has 13 members, including its current CEO, former CEO Gary Kelly and three other North Texas executives.

Southwest Airlines’ 13-member board of directors will play a key role in determining how the Dallas-based airline rebounds from a holiday meltdown that canceled thousands of flights and stranded passengers at airports around the country.

But so far, they’re not talking.

The Dallas Morning News called or emailed the board members to ask how they’re responding to what’s shaping up to be one of the costliest errors in the company’s history. Early estimates from industry analysts put the price tag in the $500 million to $700 million range.

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Only board member David Hess, former CEO of Pittsburgh-based Arconic Corp., answered the phone but referred The News to the company’s media relations team. Southwest’s corporate governance guidelines prohibit board members from disclosing “any material non-public information concerning the company.”

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The board, which holds at least four annual meetings a year, includes a number of North Texans:

  • Former Southwest CEO Gary Kelly, who retired in early 2022 after nearly two decades at the helm.
  • Douglas Brooks, former president and CEO of Brinker International Inc.
  • David Biegler, an energy veteran in Texas who served as president, chairman and CEO of Southcross Energy and a retired vice chairman of Irving-based electricity retailer TXU Energy.
  • Toyota Motor North America chief administrative officer Chris Reynolds.
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Southwest CEO Bob Jordan is also on the board, along with retired employee and longtime Herb Kelleher confidant Ron Ricks, who is the vice chairman. The board’s lead independent director is William H. Cunningham, who’s also a corporate governance professor at the University of Texas.

The 11 nonemployee board members were paid an average of $257,559 in 2021, according to a filing with the U.S. Securities and Exchange Commission. The board held seven meetings in 2021, with each member attending at least 75% of board and applicable committee meetings. Board members and their spouses also received free travel on Southwest flights in 2021. After 10 years, they’re eligible for lifetime free travel.

In a prerecorded video message released Thursday evening, Jordan said he’s been speaking with the board but didn’t provide additional details. Last week, he said the board would exercise its oversight responsibilities “as they see fit.”

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“I don’t want to speak for our board. But like any board, they’ll have things that they’ll think about, and it’s too early to share that,” he said in a Dec. 29 media call.

A board’s job in a time of crisis is to ask the right questions, said Gregg Ballew, executive director of the Institute for Excellence in Corporate Governance at the University of Texas at Dallas.

“Boards have a reputation for being better at dealing with crises than avoiding them,” he said.

Company leaders have blamed the chaos on outdated technology in its crew scheduling systems, saying the software was overwhelmed by the need to delay and cancel hundreds of flights when cold weather and winds hit key Southwest airport hub in Chicago and Denver on Dec. 22. Jordan said in Thursday’s video that the company spends $1 billion a year on technology.

Ballew said board members should be asking how the crisis unfolded and what the plan is to address the outdated scheduling system. Once a plan is presented, he said, the board’s job is to evaluate it.

“The board’s most powerful tool is the big Q,” he said. “It’s going to take a major commitment from Southwest to avoid this problem repeating.”

The board likely knew there were some technology issues at Southwest. The Transport Workers Union that represents Southwest flight attendants says it’s been warning the company about its outdated technological systems for years. Ballew said the board likely didn’t think a disruption at this level was a possibility.

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“Who’s to say the board didn’t ask the right questions about it, and it just didn’t reach priority level,” he said. “I won’t throw a lot of rocks at the board right now. If, in a year, a similar shutdown happens, then I might be questioning more.”

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