Acting with integrity and in compliance with the rules are of key importance for the success and resilience of our Group. This is why we have made integrity a key element of our NEW AUTO Group strategy. Thus, integrity is on par with the quality of our products, our financial KPIs and the satisfaction of our customers. By implementing our ambitious integrity program and the Group Essentials which provide orientation for the daily value-oriented actions of all employees, we have set the course for the future. Our objective is to act as a role model in this area and thus deepen the trust of existing and future employees, customers, shareholders and partners. Integrity and compliance should form the core of our business activities, including in our transformation from a vehicle manufacturer to a provider of sustainable mobility. We set binding standards for this in all areas.
The key initiative “integrity program” is part of the Together4Integrity Program. It has the goal of increasing the understanding of integrity and its importance as a basis of doing business among all the Volkswagen Group’s employees and managers and of creating a culture in which acting with integrity is not only consistently possible, but also seen as a matter of course. It is associated with encouraging the constructive handling of mistakes, increasing the transparency of reasons for decisions and strengthening willingness to also address aberrations and risks with managers. Integrity is a core element of professional conduct for us and this is the only thing we aim for: to do the right thing in a given situation.
As the basis for running our business, integrity must impact all levels. This means integrity is an obligatory criterion for all the Board of Management’s decisions: every submission to the Board of Management must include an opinion by the responsible department on the way in which the intended decision and its consequences are in line with the Group’s integrity and compliance or whether/ what integrity or compliance risks are associated with it and how they can be lessened. In the same way, integrity is also laid down as a criterion for decisions by the Boards of Management of the individual Group brands and companies.
Furthermore, the integrity program aims to anchor integrity as a strategic lever and a control variable for decision-making processes in all the brands and companies and contribute to strengthening the culture of integrity. The most important instruments in this program include dialog-oriented communication measures and event formats.
An additional initiative in 2021 aimed to further empower employees and managers to demonstrate integrity by exercising their decision-making leeway, thinking entrepreneurially, and acting in a solution-oriented manner and thereby advance the transformation of the Group from a cultural perspective as well.
THE FOUNDATION OF OUR ACTIONS
Integrity is the maxim for our actions and complements compliance, with which we ensure that all processes and decisions within our Group comply with the relevant rules. Together, they shape our corporate culture, which unites the unspoken and spoken rules and values relating to our daily cooperation. For us, integrity means doing the right thing in a professional context – on the basis of our own convictions. This includes steadfastness in adhering to these principles – regardless of economic or social pressures. Integrity is an attitude. It provides an inner compass for correct action. This becomes crucial in gray areas where there are no explicit rules or conflicting goals exist.
In addition to personal integrity, organizational integrity matters to us too. It is based on anchoring integrity in the Group’s processes and decisions and offers people a fixed framework for interaction. In a third dimension, we understand integrity as an intangible corporate asset: it strengthens our stakeholders’ trust and makes us more attractive for investors, customers and employees.
INTEGRITY IN THE OPINION SURVEY
Whether it is possible for each individual to act with integrity is an explicit question in the Opinion Survey, the annual survey of all the Group’s employees. The question is: “In our organizational unit, is it possible for everyone to act with integrity”. If employees think this possibility is in doubt in a particular organizational unit, the relevant manager must identify and clear the possible obstacles together with the team. The question was asked in the Opinion Survey for the first time in 2017 and since then, has been one of the three questions with the highest level of agreement – while the level of agreement has been improving. The conduct anchors were developed in order to breathe life into the concept of integrity and make clear to employees what acting with integrity in their day-to-day work means. They serve as practical guidelines for action and at the same time set a normative expectation regarding what is considered “correct conduct” in the Volkswagen Group.
INTEGRITY AS A MANAGEMENT TASK
As role models, managers are among the greatest factors influencing employee conduct. In order to further strengthen this function as a role model and further develop their skills, the Role Model Program 2.0 was introduced in 2019 to encourage dialog-oriented and distance-reducing collaboration. The managers are to be equipped to ensure a culture of open discussion in their own team, where risks or conflicting objectives can be discussed without fear of sanctions and employees are encouraged to contribute their questions and ideas. Beyond their own conduct, however, managers also have the task of purposefully encouraging and demanding the right conduct among their employees. One of the ways in which support is given to them is through formats that are provided via the Opinion Survey method toolbox.
One focus of the program is also training for the ability to make decisions with integrity. Specific training modules for all levels of management have been developed for this. Since the end of 2021, these have been integrated into all Volkswagen AG’s obligatory management training programs.
EMPLOYEES’ ACTIVE ROLE
Motivating our employees and spurring them to action is also critically important. The integrity program therefore ensures permanent visibility of the topic through continuous communication both in employee media and in personal discussions. For example, information about the integrity program is regularly provided at works meetings, in individual departments, in the integrity workshops or vocational trainees. The T4I perception workshops are also used as platforms for discussing integrity and compliance. The aim is to communicate the key importance of integrity to employees, to make integrity visible and tangible in day-to-day work and to support employees in acting with integrity. However, the people who promote the topic of integrity of their own accord, who embed it within the structures of the Group and keep the topic alive – the integrity ambassadors – are also of key importance.
In selected departments, the integrity program also creates centers of excellence, which are used for in-depth, department-specific analysis of the topic of integrity. The change measures developed by employees are later reviewed to see if they can be transferred to other departments and, if suitable, are recommended Group-wide as best practices.
ANCHORING INTEGRITY IN PERSONNEL MANAGEMENT
Another focus of activities is the integration of integrity in as many HR processes as possible. For example, integrity has been a criterion in the recruitment process and in staff development of managers since 2019. Integrity was also taken into account as a required component of performance-related remuneration from the Board of Management to management level. Training and presentation documents aimed at specific target groups are used to provide information for new and existing employees and ensure that they have the competence they need. Since 2020 integrity became a compulsory topic in employee appraisals, for which the defined “behavioral anchors” form the frame of reference.
MEASURING PROGRESS WITH THE INTEGRITY INDEX
In addition to the Opinion Survey, we also use the integrity index in order to measure our progress in integrity and compliance. The index was developed in cooperation with the holder of the Peter Löscher Chair of Business Ethics at the Technical University of Munich (TUM) and comprehensively represents the integrity of an organization. The index is cross-sectoral and global and of high scientific validity. It includes established frameworks such as the ECI and the Global Reporting Initiative (GRI). The index covers weaknesses in integrity and compliance matters and makes changes in the thinking and conduct of managers and employees visible.
We started the integrity index in 2019 as a pilot project for Volkswagen Passenger Cars Germany and AUDI AG (German sites). More than 100 measuring points in the compliance/infrastructure, working atmosphere/integrity culture, product/customers, society and partner/markets categories were collected and evaluated by Business Ethics experts. The analysis is based both on internal sources, such as employee surveys, guidelines and management interviews, and on external data, such as international databases and interviews with experts. Both the companies examined – Volkswagen Passenger Cars and AUDI AG – exhibited a good integrity level overall. However, the detailed results showed a need for action in various places. Following a decision by the Board of Management, the findings were used in a structured follow-up process in order to derive and implement improvement measures together with the departments. The assessments conducted 2021 show an index improvement both at Volkswagen Passenger Cars Germany and at Audi Germany. Gains at both brands in the categories of compliance/infrastructure, working atmosphere/integrity culture, products/customers and society contributed to this.