Vanguard is the largest mutual fund company in America. It has $5.6 trillion under management. It also happens to be the largest shareholder of Boeing Co. (NYSE: BA), which is under siege because of flaws in its 737 commercial aircraft that likely caused two fatal accidents. Recently, Vanguard sent a letter to Ralph Nader saying it was “very concerned” about reports of oversight failure at the company, according to the Financial Times.

Vanguard owns about 7% of Boeing’s shares. Institutional investors hold many of Boeing’s shares. After Vanguard’s ownership, T. Rowe Price owns 5.9% of Boeing shares, as does Newport Trust. BlackRock owns 5.8% of the shares. As a group, this makes them exceedingly powerful, giving them leverage with Boeing’s board and with its top management.

Boeing is one of the largest companies in America. It is also among the largest employers in every state, with over 69,000 workers in Washington alone.

In specific, the Financial Times adds, the letter from W. Robert Main III, head of portfolio company engagement, analysis and voting, said, “In our role as shareholders, we expect companies to effectively oversee the material risks of their business. In Boeing’s case, our expectation is that Boeing leadership, including its board of directors, are closely monitoring and maintaining the safety of its aircraft.”

Boeing has been accused of not detected flaws in an automated system aimed at making the 737 Max, the latest version of a plane first in service in 1967, safer for pilots to fly. Failure of the system is suspected to have caused the crash of a Lion Air jet that killed 189 people and an Ethiopian Airlines flight that killed 157. Airlines around the world have pulled the planes out of service, and they may not return to service before the end of the summer.

The disaster has triggered scrutiny, in particular, attacks on Boeing’s CEO Dennis Muilenburg, and raised the issue of whether he can run the company in the future. The board has been accused of a lack of oversight and paying too little attention to the safety of the company’s planes.

It is not unusual for outside investors to put pressure on boards. Activist investors and corporate raiders do it regularly to push for changes in company structure, asset sales or changes in management. However, large institutions typically are not vocal investors, despite their size and potential influence. Vanguard has broken from its position as a passive investor and started to bear down on the actions of Boeing’s board, which may end up overseeing it becoming among the American companies with the worst reputations.

Corrected to show letter to Ralph Nader

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