VW appoints first woman to its board

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Doron Levin

VW gets a new board member from Daimler, who will be in charge of legal matters pertaining to diesel emissions cheating scandal.

Amid the turmoil swirling about Germany’s biggest automaker and private employer, Volkswagen AG hasappointed one of its country’s most prominent jurists to its board of supervisors, which is similar to a board of directors.

Christine Hohmann-Dennhardt, 65, a former judge who sat on Daimler AG’s board, will be the first woman to serve on VW’s board. (((US flack thinks this is so, doublechecking with German colleagues.))) Hohmann-Dennhardt will take over a newly-created post to oversee integrity and legal affairs on January 1. She also was the sole woman on Daimler AG’s board.

In what might seem an unusual gesture, Daimler released her more than a year early from her employment contract so she could go to work for the rival automaker. What’s unreported is whether the government played a part in her new role, due to VW’s importance as the nation’s top private employer.

Hohmann-Dennhardt’s appointment reflects the deep legal and economic agony that VW has created for the German nation since Sept. 18, when the U.S. Environmental Protection Agency accused the company of faking diesel emissions tests covering nearly 500,000 vehicles in the U.S. Subsequent disclosures by VW, which has confirmed the EPA’s accusations, says doctored tests affect 11 million vehicles worldwide.

In 2011, when Christine Hohmann-Dennhardt was appointed to Daimler’s board in the wake of a bribery scandal in the U.S., she told the press she personally (as opposed to her employer’s policy) was in favor of quotas in Germany to raise the number of women in management of corporations.

In recent years, so many corporations have brought in female leaders to clean up problems that researchers gave the trend a name: “the glass cliff.” It referred to the fact that these jobs often are high risk.

In 2010, Daimler paid a $185 million to the U.S. in the wake of a bribery scandal covering payoffs in foreign countries and investigated by the U.S. Securities and Exchange Commission and the Justice Department. An initial report by former FBI director Louis Freeh, who was hired to monitor Daimler, said the German automaker hadn’t made enough progress on compliance. Dieter Zetsche, Daimler CEO, a year later hired Hohmann-Dennhardt, who had just completed a term on Germany’s high court, to intensify efforts. Sheredesigned the company’s approach to compliance with anti-bribery rules and regulations, seeking to dispel an internal opinion that bribery was a “gentleman’s crime.” She held town meetings, oversaw enforcement and insisted on penalties, which included terminations and docking of pay.

WHAT WAS HER TRACK RECORD AT DAIMLER

WAS SHE SUCCESSFUL AT DAIMLER? WHAT DID SHE ACCOMPLISH OR NOT

CUT THISIn regard to paying bribes to foreign officials to get business, she told Der Spiegel: “We have to make it clear to all employees that the consequences will be very serious for the company if they don’t play by the rules. And we also have to make sure that the rules are accepted.

CUT THIS “There are countries in which corruption is widespread,” she said. “There, we have to provide employees with the support they need to abide by the rules. They have to know that we support them wholeheartedly, even if it means that they sometimes don’t secure contracts as a result.”

At VW, her role will be to do what???

Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, said Hohmann-Dennhard’s job will be to help VW and the entire German automobile industry “clean up the collateral damage from the diesel deceit.”

Michael Horn, head of VW’s U.S. operations, testified before Congress that the bogus diesel testing activities were undertaken by a “small group” of company engineers – a statement that is certain to be subject to greater investigation and scrutiny. So far, VW has set aside $7.3 billion to cover the cost of repairing cars with improper emissions controls, though financial analysts estimate the number could grow manifold, when fines, damages and lost business are taken into account.

Was the cheating the work of a relative few? Hohmann-Dennhardt, a mother of two and former justice minister for the left-center Social Democratic party before being appointed to Germany’s supreme court, appears poised to assume responsibility for VW’s investigation into the origins of emissions cheating and any potential housecleaning. As such, she may possess a license to follow the evidence wherever it takes her – perhaps to the highest levels of the company.