With the Board of Management position for Integrity and Legal Affairs, the Group has put in place the organizational prerequisites for centralized integrity management. This Group function is responsible for planning, preparing and implementing programs and projects aimed at raising awareness, providing information and reinforcing a shared awareness of integrity.
Integrity at Volkswagen is defined as acting out of conviction, with responsibility and steadfastness. Integrity is an inner disposition that acts as an internal moral compass for doing the right thing in gray areas, in the absence of explicit rules or in the event of conflicting objectives. This means complying with our Group principles and the ethical principles established therein and behaving correctly in accordance with the rules. It also includes the steadfastness needed to adhere to these principles – regardless of economic and social pressure.
A comprehensive integrity program has been in place since 2016 with information campaigns, opportunities for dialog and initiatives aimed at all employees. This encompasses measures such as international get-togethers for managers and so-called integrity workshops for team spokespeople in production. In addition, we have launched an ambassador program that helps multipliers to make integrity a visible and practical part of everyday working life. The reporting year also saw us launch the integrity index as a pilot project in the Volkswagen Passenger Cars and Audi brands’ German locations. The index was developed in collaboration with the Technical University of Munich and is designed to give a comprehensive picture of an organization’s integrity. In future, we will use it as a performance indicator to measure our progress toward our strategic goal of being a role model for integrity. With the integrity index, we are setting a benchmark for measuring integrity at an international level. The index can be used across industries and is geared toward global use. It has strong scientific validity and incorporates established frameworks such as the Ethics & Compliance Initiative (ECI) and Global Reporting Initiative (GRI). Its intention is to reveal possible weaknesses in integrity and compliance matters and make visible the changing mindset and behavior of managers and employees.
Together4Integrity: Establishing processes and engaging with people
As a central part of achieving the goal of becoming a role model for integrity and compliance, Volkswagen has launched Together4Integrity (T4I) – one of the largest strategic programs of transformation in the Group’s history.
We firmly believe that only with lasting and dependable integrity will our Company be able to gain and boost the trust of its customers, staff, shareholders, business partners and the general public. With T4I, integrity and compliance are given the same priority as other parameters such as economic targets, sales figures and product quality. T4I strengthens corporate governance in a lasting way. As a Group-wide program, it has been bringing together all integrity- and compliance-related initiatives from 15 different departments under a common umbrella since 2018. The departments involved include Research and Development, Compliance, HR and Integrity.
T4I is based on the five principles of the internationally recognized ECI, which relate to strategy, risk management, a culture of integrity, a speak-up environment and resolute accountability. They are codified as the Group’s aspiration level and are implemented through T4I. The Board of Management positions for Integrity & Legal Affairs and for Human Resources are responsible for the program. The other Board of Management positions act as sponsors, thus ensuring that T4I is successfully implemented in their area of responsibility.
The program serves to implement processes and structures that create a regulatory framework for acting with integrity and in accordance with the law. Furthermore, T4I aims to engage with people, creating a corporate culture that enables them to work together as equals, opens up space for creativity, allows diversity to flourish and encourages people to act in line with their values.
The program will be rolled out to all Group companies by 2025. Since launching in 2018, it has been introduced to over 200 companies (as of year-end 2019) that were prioritized based on the level of risk. In total, these employ approximately 430,000 people or around two-thirds of the Group’s total workforce. From 2020, the program will be introduced to more and more of the smaller companies in the Group.
There are over 100 packages of measures that make up the core content of T4I, and each Group company is responsible for implementing these itself. Every functional area must put comprehensive and robust systems and processes into effect to mitigate compliance and integrity risks, thereby eliminating the factors that have contributed to serious wrongdoing in the past. The packages of measures have been grouped together into eleven key initiatives; for example, product compliance, HR compliance and HR processes, the whistleblower system, and business partner due diligence. Both compliance and integrity are embedded in the processes for every key initiative.
Employees and managers are engaged in T4I through the use of emotive and interactive formats, making them players in the process of change. They become aware of the fact that successful change relies first and foremost on their hard work and that Volkswagen values their efforts. Events such as the T4I kick-off and T4I perception workshops bring together employees and managers regardless of the different hierarchies. They convey a sense of community and strengthen awareness of the role of each individual. They also provide an opportunity to openly ask critical questions and address problems. Both events take place at every Group company in which T4I is rolled out.
T4I not only has an internal impact; it is also felt outside the Group. New processes, for example, such as the implementation of the Business Partner Code of Conduct, ensure that our suppliers and sales partners are committed to the principles of integrity and compliance and are trained accordingly. In addition, our increasing focus on integrity and compliance shapes the manner in which employees interact with customers, representatives from civil society, governments and other stakeholders, particularly as a result of the requirements and examples set out in the Code of Conduct. In this way, we also convey our understanding of integrity and compliance and the subsequent necessary changes beyond the company.
Through T4I, corporate governance will be geared towards comprehensive and sustainable integrity and compliance across the entire Volkswagen Group. This will provide a stable framework within which the whole workforce can act responsibly and with purpose and entrepreneurial spirit, and will help to establish Volkswagen as a reputable company that embodies integrity.