VW Culture Change Agent Resigns

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VW C HAbout a year after she was hired, the Volkswagen head of compliance has left "by mutual agreement." A New York Times article reports that Christine Hohmann-Dennhardt, previously at Daimler, joined the board in January 2016 and "was responsible for integrity and legal affairs." The article further reports on the significance of her hire and departure:

Volkswagen presented Ms. Hohmann-Dennhardt's departure as one that was mutually agreed on. But the loss of a rare outsider in the top ranks underscores the insular nature of the company.

Its stock is held by a small number of shareholders: Two families, a German state and the government of Qatar jointly hold about 90 percent of Volkswagen shares. That leaves outside investors with little voice and results in a management board typically made up of insiders with a long track record at the carmaker.

Ms. Hohmann-Dennhardt had been an exception.

"No matter what spin they put on" her departure, said Jeff Thinnes, a former Daimler executive who advises European companies on compliance and ethics issues, "the optics couldn't be worse."

A statement on VW's website compliments Hohmann-Dennhardt's contributions: "The Supervisory Board thanks Dr. Hohmann-Dennhardt for contributing her outstanding expertise and experience to achieving important milestones, and for supporting the Group in revising its internal guidelines and procedures." The company also promises ongoing changes:

Volkswagen will continue to press forward with changes to its way of thinking and working. The Group has substantially elevated its commitment to working ethically and with integrity and is decentralizing its organization. Brands and regions already have much more autonomy with regard to their operating business. These and other initiatives are part of a broader transformation of Volkswagen's corporate culture to create a more entrepreneurial and international organization.

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Discussion:

  • Some hires just don't work out. What do you think happened here?
  • How well did VW handle the messaging? Read the full statement.
  • To what extent do you agree with the Times' assessment? Did the article overstate the damage of Hohmann-Dennhardt's termination?