Corporate Governance & Ethics

Running Head: CORPORATE GOVERNANCE & ETHICS
Corporate Governance & Ethics
Student’s Name
University Name
Author’s Note

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CORPORATE GOVERNANCE & ETHICS
Table of Contents
Introduction......................................................................................................................................3
Background of the situation facing Volkswagen.............................................................................3
Definition of corporate governance.................................................................................................4
What went wrong?...........................................................................................................................4
Public interest..................................................................................................................................7
Financial impacts and lessons learned.............................................................................................9
Aftermath.......................................................................................................................................10
Conclusions and recommendations...............................................................................................11
Reference List................................................................................................................................13

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CORPORATE GOVERNANCE & ETHICS
Introduction
The scandal of Volkswagen is a significant example of how the corporate houses shape ethical as
well as political issues of environment. Volkswagen is headquartered in Wolfberg, Germany and
owns the brands like Lamborghini, Skoda, SEAT, Bugatti, Audi, and Bentley and so on. The
presence of Volkswagen all over the world made the scandal a significant event not because of
the legal and financial repercussions that happened in various countries, but because of the
significant and sustainable damage that was done to the society as well as environment.
Volkswagen was given by the goal of becoming the largest automaker in the world win in 2018,
however after to scandal the company was compelled to surrender one third of the market capital
of the organisation. In order to compensate for the violation of emission levels, the company
ordered a voluntary recall, issued public apologies followed by the resignation of the CEO and
the other directors of the organisation. There are several lawsuits as well as criminal charges
against Volkswagen and the future business scope of the organisation seems grim (Siano et al.
2017).
Background of the situation facing Volkswagen
In order to analyse how a global company like Volkswagen food engage in the act of crime for
such a long time period, it would be beneficial to perceive is case as an issue of regulatory
capture incorporating information asymmetry, private governance as well as issues with
oversight. This analysis will attempt to analyse the issues regarding social concerns that came up
because of the behaviour of Volkswagen in the domain of international economic and this report
also provide recommendations in the end for increasing the system of accountability within the
Global automobile industry.

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CORPORATE GOVERNANCE & ETHICS
Definition of corporate governance
Corporate governance can be mostly perceived as the structure as well as relationship that helps
in giving direction to the corporate performance. The board of directors are Central to corporate
governance. The relationship of corporate governance to other primary participants, management
and the typical shareholders is very crucial. Additional candidates involved with corporate
governance are the employees, suppliers, creditors as well as customers. Most importantly,
Blackwelder et al. (2016) states that the framework of corporate governance is highly dependent
on the institution in, ethical, legal as well as regulatory environment of the community. In this
regard, it should be specified that in the context of this case study the concerned company,
Volkswagen has reached the engineering and environmental standard of the community because
of which they have been scandalised.
What went wrong?
International Council for Clean transportation which is the non profit organisation had invited
the expert group of scientists at Virginia University to perform standard tests on admission from
diesel cars. Meanwhile, Volkswagen has been advocating there diesel curse as one of the most
eco-friendly card models along with being fuel efficiency also. This is strong publicity helped
the customers to perceive that Volkswagen have been developed in product that generated value
towards the society and does search visit promotional activities accounted for highest sales of the
specific car models. The assistant research professor, in the course of emission testing,
dramatically identified various results which went against the low emission claims of
Volkswagen (Li et al. 2018). Since Volkswagen has been a significant market player who has
Global Business Standard, the team of professors had to conduct get tests again and again in
order to confirm their findings.