Corporate Governance in a Globalizing World: Case Study 13

Governance in a
Globalizing World

Corporate Governance 1
Governance in a Globalising World- Case Study 13
The aim of the paper is to talk about the corporate governance that is required to be followed by
all the companies in the current environment. The corporate governance is to facilitate effective,
entrepreneurial and prudent management that can lead to the long-term success of the company.
This is the system through which the companies are directed and controlled. The paper is based
on the case study provided that is based on the dieselgate scandal of the Volkswagen Company.
The scandal was the failure of the corporate governance by the country. The paper includes the
theory and the corporate guidelines to support the evaluation of the case study. It includes the
ways through which the investors can resolve their crisis. In addition, it includes the corporate
governance issues at Volkswagen.
Volkswagen Company was listed as the industry group leader for the automobiles and other
components related to the Automobiles. Along with this, the company was in DJSI score in the
year 2015 that is included for the top marks for a code of conduct and compliances with the anti-
corruption and the environment reporting. On 29th September 2015, the S&P Dow Jones Indices
broadcasted that the enterprise was to be disinterested from the Dow Jones Sustainability Indices
as a result of revelations that it has influenced emission exams to hide the level of toxic
pollutants that rise form the diesel engines in the US (Rauwald, 2018).
The supervisory board is ultimately accountable for the strategy and the further activities of the
company. This also includes the activities that took place at the time of the Scandal. This is the
act that they are ultimately responsible for the scandal. The company didn't follow the corporate
governance which was proved by the guidelines related to the California Air Resources Board
(CARB) accepts the indications for the loopholes from the learning that has been issued by the

Corporate Governance 2
International Council On Clean Transportation (ICCT) which reflects that nitrogen oxide values
for the 2 Volkswagen diesel vehicles deviated in importance between the bench testing and the
road operation. A memo for the ICCT report has been arranged for the Martin Winterkorn
include the defects in the present products which might cost approx. Euro 20 million ($22
million) for the issues related to the diesel in the North America (Hotten, 2015). The committee
of the Volkswagen related to the product safety (APS) formed a diesel task force after advance
tests that are approved out by the CARB reflects that the work that has been done to bring the
improvement in the affected engines was not sufficient enough to reduce the nitrogen oxide
emissions to an acceptable level. The company announced that there were issues related to the
CARB and the environmental protection agency (EPA) at the time of meeting as this is included
in the corporate governance that is required to be followed by the company (McGee, 2017).
The managers of the company were unable to act in the form of the shareholder's interest. They
contributed to bring the improvement in the personal wealth. The aim due to which the company
was willing to bring the improvement was to enhance the sales and profitability of the company.
The supervisory board of the company was not able to exercise the control on the operations of
the company. This board of the company makes the decisions collectively after conducting the
voting for the company. The decision that took place at the time of scandal includes the major
role of the managers. The major damage that is done by the company is the damage to the
reputation of the company. This reflects the violation of the Stakeholder Theories of the
corporate governance which is based on the assumptions that the board of directors of the
company has a stake in the corporation (Adams, Hermalin, and Weisbach, 2010). This means
that whatever activities are taking place in VW in that the stakeholders are also responsible.