By Adam Turteltaub
adam.turteltaub@corporatecompliance.org
Last week saw the revelation that Volkswagen gamed emissions control testing. Multiple news stories have since reported, and VW did not deny, that the emissions control system in its diesel cars could sense when a test of pollutants was being conducted. The emissions controls switched on during the test and then switched off once the test was completed. As a result, the cars easily passed the test but in day-to-day use exceeded EPA limits.
The theoretical fine for this violation could be as much as $18 billion, and that’s just a part of the problem for VW. There may well be shareholder derivative lawsuits and class actions brought by VW owners.
Business people watching this can, obviously, sit and shake their heads and watch the show as the saga unfolds. Speculation has already begun that the Volkswagen CEO will soon be fired or resigned.
Better than simply watching is engaging in a little paranoia. Ask yourself: do I have similar risks? Is any of the software in our products designed to meet legal and regulatory requirements? How do I know that someone at my organization hasn’t done something similar? Do we even know all the places where we have built software into our products?
Now may be the time to walk down the hall and spend some time with the people who develop the software. They are certain to be talking about this issue. Let them know that, in addition to being improper, such activity would violate your organization’s code of conduct. Also, let them know that if anyone pressures them to do something wrong, they should call the company helpline, or contact the compliance department directly.
It’s better than simply watching this scandal unfold, and much, much better than waiting to find out what gremlins may be hiding under your products’ hood.
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This will be an interesting issue to watch unfold as the root cause is revealed. Was the control an innocent part of the test phase that got wrongly extended? Was it a nefarious effort to purposefully elude regulations? How does an institutional process with many individuals only watching their own part of the larger whole lead to these problems? I’m sure there’s shock that in this day and age with so much focus on controls that this could happen. But controls are only as good as the humans that create and maintain them.
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