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Volkswagen scrambles to deal with emissions scandal

November 05th, 2015 - Posted by Mark Dunn in Anti-Bribery And Corruption

In a statement on Volkswagen's website issued from the company's HQ, Herbert Diess, CEO of the Volkswagen Passenger Cars brand, said: "… I assure you that Volkswagen will do everything humanly possible to win back the trust of our customers, the dealerships and the public."

They will certainly have their work cut out. In a poll taken after the scandal erupted, a YouGov BrandIndex measured Volkswagen's consumer perception with its Buzz score, which asked: "If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?"

A Buzz score can range of -100 to 100 with a zero score equaling a neutral position. For most of September, VW's Buzz score was in the 10 to 11 range. They are now at -2. VW had never gone below a zero Buzz score since at least January 1, 2009. (YouGov BrandIndex)

"Brands are all about trust and it takes years and years to develop. But in the space of 24 hours, Volkswagen has gone from one people could trust to one people don't know what to think of." said Nigel Currie, an independent UK-based sponsorship and branding consultant.

As part of the damage limitation plan, the company revealed it has appointed a top anti-corruption manager from competitor Daimler to deal with their legal affairs. Dr. Christine Hohmann-Dennhardt will move to Volkswagen in 2016 as Board Member for Integrity and Legal Affairs.

The appointment is a prudent decision from Volkswagen who will no doubt be hoping such action will reverse the adverse financial effects on all of Volkswagen's brands including Audi, SEAT and Skoda. In an online news article, the Chairman of the Supervisory Board of Volkswagen AG, Hans Dieter Pötsch, said "We are delighted that Dr. Hohmann-Dennhardt has agreed to take on this responsible task and that we can build on her outstanding competence and experience".

Appointing qualified and competent compliance leadership, with responsibility for clean business practices has been a step taken by other brands following compliance breaches. Daimlet AG and German industrial equipment maker Siemens both named compliance executive appointments after bribery scandals.

Due diligence and compliance the key to future rehabilitation
The road back to probity and public trust promises to be a long and arduous one. The allegations facing VW suggest they have suffered catastrophic due diligence failures and this is where their path to rehabilitation will have to start.

No matter the size of an organisation, a strong compliance programme starts at the top and should be properly communicated through every layer or management and staff. For complete transparency, it should include ensuring compliance officers have the authority to enforce a reporting process.

Proactive and thorough compliance
VW cannot afford a further scandal and needs to be seen to be whiter than white. The organisation will be under the microscope for years to come. It remains to be seen whether they will survive this compliance disaster but, if there is to be redemption, it must come from strict compliance regimes that are understood and followed at every level and every location.

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