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There are several lessons from the Volkswagen scandal. The car maker has admitted to cheating on emissions data for some of its diesel models
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There are several lessons from the Volkswagen emissions scandal. The German car maker has admitted to cheating on emissions data for some of its diesel models.
It is hard to see anything good in the scandal. Yet, two striking facts are worth noting. First, chief executive officer Martin Winterkorn has quit after taking responsibility for the damage done to the firm’s reputation. Second, the supervisory board has got into the act to do its main fiduciary duty of protecting shareholders’ interests.
Passing the buck is a more common response to a crisis in India. CEOs usually claim to have been in the dark. Boards that meet all the fashionable norms of good corporate governance prefer to be silent spectators. Think of several controversies in recent years—of corporate action that benefits promoters or parent multinationals, of managements that have destroyed firms by taking on too much debt or of downright corruption.
Indian boards have usually been silent. It’s a pity.
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