Essays on The Corporate Governance Issues at Volkswagen Case Study

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The paper "The Corporate Governance Issues at Volkswagen" is an outstanding example of a business case study.   In well-functioning corporate governance, transparency plays a major role. Through disclosure, it becomes possible for the companies to be accountable. It makes it possible to have the shareholders who are well informed. The business has a responsibility to the stakeholders, society and the environment (Thomsen & Conyon, 2012). The article of the New York Times is based on the Volkswagen (VW) scandal over diesel emissions. It is a scandal caused by the firm failed to have transparency in their disclosures on the level of emissions from their cars.

The business failed to be honest to all stakeholders during disclosure and rigged their diesel cars to cheat on the emission tests (Ewing & Boudette, 2017). This paper discusses the corporate governance issues related to fraud, deception and lack of transparency at VW. The paper will discuss the arguments made in the article and corporate governance issues arising using appropriate theory to show its importance. Lastly, an opinion will be given on the corporate governance issues raised. Outline and summary of the arguments made VW is one of the largest vehicle manufacturers based in Germany.

The company was accused of duping the stakeholders on the level of emissions from their diesel engines. The cars were sold with software which made it possible to cheat on the emissions once they were being tested in the US (Rhodes, 2016). The company success in the US had been based on their huge marketing campaign on low emissions. The marketing campaign was based on deceit and the company lied to their stakeholders including customers, society and the environmental agencies.

The engines level of emissions was up to 40 times what is allowed in the US (Ewing & Boudette, 2017). The authors argue that VW has paid heavily on their deception and lack of transparency in their disclosures. The American government has been tough on VW due to their corporate wrongdoing. This is through holding both the firm and executives accountable for duping the stakeholders through overseeing the installation of an emission cheat device. The authors point out that VW has already admitted to cheating on the level of emissions through the use of deceptive software (Ewing & Boudette, 2017). According to the authors, VW pleaded guilty for violating the clean air act and trying to obstruct justice.

In fact, it is stated that six of the executives have already been charged in the US and an engineer has already pleaded guilty for conspiracy to defraud US regulators and customers. The company exposure according to the authors’ argument is one of the largest corporate frauds in pollution and safety. The company settlements and fines according to the authors are $22 billion in the US alone (Ewing & Boudette, 2017).

Based on the authors’ argument the firm could face further lawsuits in Europe. Despite this, the authors point out that Volkswagen is trying to avoid costly lawsuits in Europe due to their fraud using poor transparency (Rhodes, 2016). This is due to less consumer-friendly laws in Europe. According to the authors, VW may try to use the EU weak consumer laws to evade compensating their clients. The authors assert that it is possible for VW to continue suffering in future due to their deceptive practices which are against (CSR Ewing & Boudette, 2017).

References

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Ewing, J., & Boudette, N. 2017, As VW Pleads Guilty in U.S. Over Diesel Scandal, Trouble Looms in Europe, The New York Times. Retrieved from https://www.nytimes.com/2017/03/10/business/volkswagen-europe-diesel-car- owners.html

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Appendix

Ewing, J., & Boudette, N. 2017, As VW Pleads Guilty in U.S. Over Diesel Scandal, Trouble Looms in Europe, The New York Times. Retrieved from https://www.nytimes.com/2017/03/10/business/volkswagen-europe-diesel-car- owners.html

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