What exactly do we mean by integrity? Why is it a fundamental component of our TOGETHER – Strategy 2025? And in what way do credibility and transparency help us to attract the best minds of tomorrow? An essay by Hiltrud Werner, member of the Board of Management for Integrity and Legal Affairs.

Text: Hiltrud Werner | Illustrations: Mario Wagner

Never in its history has the Volkswagen Group been the focus of public criticism on the scale triggered by the diesel crisis. We are faced with two challenges simultaneously: we must permanently win back lost trust; and at the same time, we must take the radical transformation process in the Group ushered in by the TOGETHER – Strategy 2025 decisively forward. Integrity plays a key role for both challenges. But what exactly do we mean by integrity? And why exactly is it so vitally important for TOGETHER – Strategy 2025?

The answer is: because integrity is everyone’s business and affects us all. In all brands, regions, and Group divisions. At all levels in our company. For both colleagues and customers all over the world. Board decisions taken in any company can have far-reaching consequences, and in the event they prove wrong, can pose a direct threat to the company’s survival. Indirectly, though, the success and continued existence of a company also depend on whether its employees base their conduct and thus their actions on their own conviction of “right” and “wrong.” And finally, a company will only endure if its customers remain convinced that the products are morally acceptable and beneficial to the wider community. If a company and its employees merely restrict themselves to pursuing their own agenda, that eventually takes its toll on customer benefit – one might even say on customer trust.

“Integrity brings corporate values to life.”

Internal and external control or sanctioning systems, an effective compliance management system, and easily comprehensible guidelines that employees are familiar with are important. Even more important, though, is our self-perception of our day-to-day actions. Ultimately, it is employees themselves who know whether they have given their very best, or whether they have acted according to their conscience. Integrity is much more than just a word. Integrity does not depend on hierarchy levels. Integrity brings corporate values to life, it makes trustful collaboration possible, and it enables our managers at all levels to answer for their decisions with a clear conscience. Responsibility practiced at individual level becomes vibrant, long-term responsibility for the company, for colleagues, for the company’s customers, and for society.

Clearly, integrity can also make daily business more complicated, given that it could require passing up potential opportunities for income and profit that may be legal, but are no longer legitimate. The voluntary commitment given by a company to forgo certain profit opportunities for ethical reasons expresses a basic attitude. Integrity therefore demands steadfastness. But employees will only demonstrate this quality if they feel they will not suffer any disadvantage by so doing. This is why the conduct of the Board of Management is so crucial. The Board’s words – and above all, its actions – must convey that it respects, expects, and encourages integrity. Personnel selection and development must reflect this, too. Only then is there a real likelihood that decisions taken by the company’s middle and lower management will be driven by integrity.

However, even that is no guarantee. In the mid-1960s, Ernst-Wolfgang Böckenförde, the prominent philosopher of law, wrote, “The liberal secular state lives on premises that it cannot itself guarantee.” This dictum ultimately also holds true for companies, and has not lost its relevance to the present day. To use a word that has sadly gone out of fashion, companies today still depend on the quality of virtue in their employees – in the best sense of the word. And that is exactly what integrity means. Integrity imposes limits on business rationale, at least in the short and medium term. That is why our company’s executive management has underscored the central role of integrity by firmly anchoring the mission to become a role model for the environment, safety, and integrity in the Volkswagen Group’s TOGETHER – Strategy 2025.

One element of this mission is that our Group takes responsibility for the common good – in other words, that it assumes social responsibility. The crucial factor here is that this corporate social responsibility does not merely find expression in well-meaning but superficial gestures, but is practiced in harmony with our corporate strategy. Only then does CSR become credible and effective, both internally and externally. And it should be noted that engaging for the common good may indeed also have a positive economic impact. I am firmly convinced that social and economic responsibility are not incompatible if they become a natural part of corporate culture. If a company’s social engagement strengthens its reputation and makes it more attractive to customers, investors, and employees, as well as paving the way for new, forward-looking fields of business in an ecologically responsible society, then that is a welcome outcome, albeit not the sole purpose of social engagement.

“Young talents have greater freedom to base their choice of company on non-economic criteria.”

There are occasions when it is difficult to make a distinction between the commercial and social motives behind the decision for or against a particular social project. In such instances, an outsider’s perspective and advice can help. Volkswagen takes this very seriously and has already repeatedly sought advice from the highly competent international experts from politics, science, and research who make up the Sustainability Council.

An open attitude towards the opinions voiced by society, whether these are given by the Sustainability Council or the outcome of discussions with politicians and associations, can in fact encourage a company as a whole to act with integrity. A company’s efforts will become even more credible in the eyes of the public if it is able to demonstrate transparency in the application of its principles, both internally and externally, and is even prepared to go against the short-term business rationale in specific instances.

And getting it right will also help us to succeed in the increasingly competitive recruitment markets. Where their skills are in demand, young talents have greater freedom to base their choice of company on non-economic criteria. For young people with a clear value system and a sense of social responsibility – in other words, who believe they act with integrity – one criterion for their choice of employer will be whether they perceive that company as advocating integrity and whether there is a high correlation between their personal values and those of the company. Unequivocal integrity therefore helps to secure tomorrow’s manpower and business success. More generally, integrity helps a company to preserve its raison d’être, its “citizenship,” without which it could hardly exist in the long run, let alone flourish.

We believe that integrity helps to secure the future of a company. Volkswagen AG has recognized this and is acting accordingly. Compliance, culture, integrity – they form the basis for implementing our strategy and are thus the foundation of our corporate success.

Hiltrud Werner,
born in Bad Doberan, Germany, in 1966, is an economics graduate. She became Senior Vice President Corporate Audit at MAN SE in 2011, and was appointed Head of Group Auditing at Volkswagen AG in 2016. She has been member of the Board of Management for Integrity and Legal Affairs since February 1, 2017.