Boeing said that its management was unaware of the issue until the Lion Air crash in Indonesia previous year, which killed 189 people, and the planes were not grounded until after another of the type operated by Ethiopian Airlines went down several months later, leaving a further 157 people dead.
Boeing also said there is an "AOA disagree alert" that would work only when aircraft have been procured with additional cost paying the optional feature.
"Accordingly", continued Boeing, "the software activated the AOA Disagree alert only if an airline opted for the AOA indicator".
But within months of the plane's debut in 2017, Boeing said, its engineers realized that the sensor warning light only worked when airlines also bought a separate, optional feature.
The planemaker said it had meant to provide the feature as standard, but did not realise until deliveries had begun that it was only available if airlines purchased an optional indicator.
However, MacMillan said board members he interviewed admitted they did not even know about the software system until after the first crash, which he said looks worse for CEO Dennis Muilenburg and company management than it does for the board.
A review into the pilot warning system glitch had concluded that "existing functionality was acceptable" until a planned software update.
The 737 Max was grounded worldwide over safety concerns following the Ethiopian crash in March, killing 157 people.
A number of grounded Southwest Airlines Boeing 737 MAX 8 aircraft are shown parked at Victorville Airport in Victorville, Calif., on March 26, 2019.
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The software delivered to Boeing linked the signal with a second cockpit gauge - available for a fee - that displayed the readings from the two vanes.
In a statement issued over the weekend, the American airliner manufacturer admitted that its software was not properly displaying fleet-standard warning captions to pilots.
Immediately following the company's reiteration that it did not merit action in 2017, Boeing confirmed that it was brought up again in 2018 and a Safety Review Board (SRB) was convened to "consider again whether the absence of the [safety] alert from certain 737 Max flight displays presented a safety issue".
Erroneous data from a sensor responsible for measuring the AOA or the angle at which the wing slices through the air is suspected of triggering a flawed piece of software that pushed the plane downward in two recent crashes.
"However, Boeing's timely or earlier communication with the operators would have helped to reduce or eliminate possible confusion", he added.
Neither the Lion Air aircraft nor the Ethiopian Airlines jet had the feature.
Boeing did not tell airlines or the FAA about this decision.
"So you have to kind of wonder are these people really there and are they sitting around the table helping Boeing oversee its strategy?" That allowed the airline to activate the sensor-disagree warning lights on its 34 Max jets earlier this year, she said.
The panel determined the issue to be "low risk", and said Boeing would have to fix it as part of an overall package of enhancements to the Max in response to the Lion Air accident.