One thing is true about the ubiquitous phrase tone at the top; if you want to effect cultural change, it must start with top management. If there is no will to actually make a difference it does not matter how experienced any compliance professional might be; no will at the top and there will be no change throughout an organization. We may be observing this play out at Volkswagen. One might think having just concluded the largest fine ever for fraudulent emissions testing software, VW might have a bit more sensitivity to this fact.
Unfortunately apparently not as reports note that barely one year after she took the position of head of compliance at Volkswagen, Christine Hohmann-Dennhardt is leaving the company. A VW Press Release said she was leaving “due to differences in their basic understanding of responsibilities and future operating structures with the function she leads.” While the statement alone is worth of one of Lucy Kellaway’s annual awards for corporate-doublespeak, if it is unpacked through that filter, The Man From FCPA can see some troubling corporate directions.
The first is the “understanding of responsibilities”. This clearly intones that the company has little interest in real compliance or even a culture of compliance. It certainly speaks to the insular nature of the company ownership with two families, a German state and the government of Qatar holding approximately 90 percent of voting shares.
The second phrase “future operating structures with the function” apparently two additional areas of dispute. The first is the responsibility of the CCO role. Clearly the Board did not want Hohmann-Dennhardt to have direct oversight over a large swatch of company operations. Equally disconcerting the import there would not be sufficient resources to actually do compliance.
It will be interesting to see what the response of the U.S. Environmental Protection Agency and Justice Department might be with the news of Hohmann-Dennhardt’s departure. It certainly leaves outside parties with little to no voice in a company led by a small coterie of insiders. Jeff Thinnes, a former Daimler executive noted the obvious when he said, “No matter what spin they put on, the optics couldn’t be worse.”