Corporate Governance Issues at Volkswagen: A Case Study

IBU5GW Corporate Governance

Table Of Contents
Introduction 3
The Supervisory Board is ultimately accountable for the strategy and activities of the
company, hence they are ultimately responsible for the scandal. The CEO has resigned but
it should have been the Supervisory Board members 3
Investors and activist groups are increasingly exerting pressure on companies in regard to
their activities especially in managing their environmental risks. What could these
investors have done to help resolve the crisis 4
The Case 13 document refers to corporate governance issues at VW. Outline what you
think they are and how should have they been resolved 5
Conclusion 6
Reference List 7

Introduction
The structure of relations, rules, mechanisms and processes that are the basic units of of
controlling and directing a corporation and decision of the growth strategies and policies of the
corporation is referred to as the corporate governance. But an issue of corporate governance
plays a major role for any organization as it was in the case of Volkswagen. In September 2015,
the Environmental Protection Agency of USA found that there were many VW cars that were
sold in US market with a software installed in the diesel engines that could manipulate and
improve the results of the emission data and thus the German car manufacturing giant was
alleged of cheating the emissions test in the USA.
The present article will deal with some of the major questions that have been raised upon the
occurrence of this incident.
The Supervisory Board is ultimately accountable for the strategy and activities of the
company, hence they are ultimately responsible for the scandal. The CEO has resigned but
it should have been the Supervisory Board members
Business scandals are not a new matter that comes for the discussion, and the same makes sense
for the average consumers in cases where the companies cheat, steal, or lie. In most of the cases
infringement of the corporate governance remains to be the core reason behind the scandals that
come into the view. Corporate governance is the structure that directs, manages, organizes and
supervises an organization including its internal and external mechanisms of control. In general
we can find that the board of directors for an organization guides and heads the business of that
organization (Schluep Campo and Aerni, 2016). It is the same board of director that is
accountable to the CEO for the management of the business. Again the board of directors
remains acutely responsible for the governance and management of the organization and at the
same time also monitors the performance of the senior management. In accordance to the
corporate scandal of the Volkswagen, that was mainly due to the failure of corporate governance
laws and the company was caught in cheating the air pollution test of the USA (Bottenberg, et al.
2017). Although the fact was that the CEO of the company, Martin Winterkorn resigned from his
post by taking the entire responsibility of the cheating scandal of the diesel engines of the cars. In