Co-determination: Lessons from the VW scandal

VW-Skandal

As if the measure hadn’t been full since Dieselgate, Volkswagen had to admit the next serious mistake: The group has illegally sold thousands of pre-series vehicles. This again raises the question of why a corporate culture with such a focus on turnover and profit maximisation was able to flourish at VW of all places, where the trade unions and the state have a great deal of influence. And since we have repeatedly critically examined the role of politicians on the Supervisory Board, it is time to focus on employee representatives: Why have they prevented overambitious targets just as little as serious misdirected incentives through millions of bonuses?

Short-term thinking is unfortunately not reserved for activists

We’re afraid: Because topics such as corporate culture were foreign to them. As long as they were able to enforce good wage agreements and prevent dismissals, they supported the course of the board – just like the Prime Ministers of Lower Saxony. This shows that short-term thinking is not reserved solely for activist investors: what is the share price for some is the wage level and number of employees for others; as long as the level is right, everything else moves into the background. We therefore hope that the employee supervisory boards led by IG Metall boss Jörg Hofmann and works council member Bernd Osterloh will take the scandals as an opportunity to critically question their own role – and to examine whether they have sufficient regard for the long-term well-being of the company. This is the only way to ensure that co-determination remains an advantage even in disruptive times.