A unique combination of wrong turns—a culture of fear, integrity deficit, unrealistic goals, and even a bit of national pride—set Volkswagen down the bumpy road that dead-ended in the biggest scandal in automotive history. The course back to regaining trust was much more straightforward.

That journey began when VW finally admitted to installing defeat devices in more than 500,000 U.S. cars, was fined more than $4 billion, and was forced into arguably the most high-profile compliance monitorship on record. VW’s three-year monitorship, which lasted from 2017 until September 2020, is chronicled in Compliance Week’s latest in-depth case study: “Coming Clean: Volkswagen’s Dieselgate scandal and compliance monitorship.”

The story has two protagonists: Larry Thompson, the dean of compliance monitors who came out of retirement to take on one final challenge; and Hiltrud Werner, a no-nonsense, high-character executive whom VW hired to lead it through what would be the most difficult of exercises—taking a hard look in the mirror.

In the wake of the shame of Dieselgate and the stain it left on its brand, Volkswagen had no choice but to embrace the monitorship. It started by hiring Werner, putting “integrity” in her job title, and empowering her by giving her a seat on the board. The embattled company placed a cross-functional team around her to fulfill every requirement of what would be a difficult three years of reflection, transparency, and cultural transformation.

Part of VW’s new commitment to transparency was cooperating with Compliance Week on this case study. CW writer Aly McDevitt interviewed senior officials on both sides of the monitorship and reviewed hundreds of pages of court documents and internal company publications. Insights gleaned from her exploration are at the heart of our comprehensive study of this highest of high-profile compliance monitorships.

What will you, the compliance practitioner, get out of it? Lessons galore, relayed in a manner that will leave you with takeaways you can apply to your own programs. Among them:

  • Creating a well-intentioned, bold strategy based solely on business objectives can manifest itself in unexpected ways if a strong ethical culture isn’t in place. The negative effects are multiplied if employees also fear voicing their concerns about unattainable goals.
  • Taking a cooperative, rather than confrontational, approach to a relationship with an outside party tasked with cleaning up a public mess is the way to go.
  • Communicating difficult realities to a reeling employee base is best done in a way that makes them feel safe yet also demands they embrace change.
  • The only way to build trust is by simply being honest with all stakeholders, a lesson that seems obvious but one that many companies, Volkswagen included, learn the hard way.
  • A code of conduct can be much more than a tick-the-box exercise if it is created with intention and prioritized by senior leadership.
  • Public failure and scandal can be incredibly effective teaching tools rather than embarrassments to be swept under the rug.
  • Measuring the effectiveness of training is just as important as the training itself. Volkswagen found some innovative ways to demonstrate its messages were getting through to employees.
  • Silos are incredibly harmful to both culture and motivation. VW discovered creative and effective ways to break down silos and eliminate “chimney careers.”

We’ll leave you with just these high-level points for now, but the complete case study spares no detail in chronicling the world’s largest automaker’s comeback from its biggest mistake.

Read on—Chapter 1: Dieselgate exposed; enter Larry Thompson

CW presents: ‘Coming Clean: Volkswagen’s Dieselgate scandal and compliance monitorship’