What Volkswagen Must Do To Restore Its Reputation

The scandal involving VW and its unfortunate decision to equip its U.S. diesel vehicles with devices that reduce emissions during testing has rocked the storied automaker to its core.

While the brand has done several things right (move quickly to take responsibility for the acts, announce an external investigation, remove the CEO), given the vast scope of the problem, there is clearly more they can and should be doing now.

For one, instead of just announcing a generic external investigation, they should quickly name at least its chair -- ideally, someone with unimpeachable integrity and a global reputation for ethics.  They should also move quickly to fill the investigative team with a group of people with impeccable credentials. 

Given that the scandal involves emissions compliance and its effect on the environment, at least one member of the external investigative team should be someone from a reputable global, environmental advocacy group, such as the Sierra Club.

With regard to the investigation findings, even though the CEO has "stepped aside," for credibility purposes, they should only be shared with the Board of Directors (not the acting/interim CEO).  In addition, though it may give rise to some additional litigation risk, the findings should also be shared with the U.S.  Department of Justice in an effort to demonstrate cooperation and transparency. 

Beyond the CEO's departure, an obvious question remains -- why is the company's head of engineering still on the job?  In such a reportedly top-down culture, it strains credulity to suggest that this person was completely unaware of this software installation.  In order to keep his/her cooperation in the investigation, they should not fire him/her.  But, why he/she hasn't already been placed on paid administrative leave is astonishing.

Lastly, moving forward, for at least a period of time, the company should strongly consider having outside experts review and "certify" any/all regulatory submissions the company plans to submit before they do.  Anything less than that would cause the regulatory bodies to gravely doubt and perhaps automatically reject (or endlessly delay) the submissions.

There is no question this scandal is very bad news for VW but by taking steps such as those outlined above, they have a good chance of eventually restoring their reputations and preserving their business.