LRN Perspectives

Rebuilding Trust: Stephanie Davis Brings Ethics and Compliance to Volkswagen After Emissions Crisis

October 1, 2019 LRN Corporation
 

“No matter what is going on in a business, you always need to be working to build the trust of your customers.”

 – Stephanie Davis

On this episode of the Principled podcast, Ben DiPietro, Editor of LRN’s ENC Pulse Newsletter, interviews Stephanie Davis, Chief Ethics and Compliance Officer for Volkswagen Group of America. Stephanie joined Volkswagen right after the diesel crisis and is building the Ethics and Compliance program for the largest automaker in the world. In a company that did not have a Compliance program prior to her role, Stephanie made an effort to get to know all business unit leaders and to work with their KPIs, business goals and individualized risks. Volkswagen is rebuilding trust with its customers through a commitment to improving emissions and going carbon neutral. Stephanie also explains how the company is driving diversity and inclusion and how ethics is directing decisions around the use of AI and machine learning. 

WHAT YOU'LL LEARN THIS EPISODE...

  • [0:53] Tell us about your journey to becoming the Chief Ethics and Compliance Officer for Volkswagen.
  • [1:05] Stephanie started at Volkswagen in May of 2017, which was right when the monitorships started after the diesel crisis. Prior to her work at Volkswagen, Stephanie was the Director of the forensic investigation department at KPMG, which was working on uncovering fraud within the buy-back program that was a part of the Volkswagen diesel settlement. She met many Volkswagen employees and mentioned off-hand that if they needed an Ethics and Compliance Officer to give her a call. Just a few weeks later, they did.
  • [3:30] Part of your role is to build an Ethics and Compliance program for Volkswagen. Where are you on that journey, what changes have you implemented, and what’s next on your to-do list?
  • [3:45] Any Ethics and Compliance program needs to constantly evolve, and for Volkswagen, as they invest more in electrification, issues will move away from emissions and toward, for example, the ethical sourcing of cobalt. Stephanie started as the Chief Compliance Officer, but quickly realized that her title needed to change to include ethics, which is an integral part of building trust in the company and training employees to behave ethically.
  • [5:30] How has your relationship with other business units changed since you can aboard as the Chief Ethics and Compliance Officer?
  • [5:45] Ethics and Compliance are everyone’s responsibility, and so Stephanie sat down and spoke with every business unit leader in her first 90 days to get to know each of them as a person and to understand their specific risks and KPIs, so she could tailor her advice and counsel. Stephanie has also strived to make Ethics and Compliance personnel a regular part of other business units’ meetings to normalize their presence.
  • [7:20] How has Ethics and Compliance developed a relationship with the board and the executive team?
  • [7:27] Stephanie has been asked to meet with the board every time they have held a meeting, so she’s been able to maintain a constant touchpoint with board members. She provides advice and guidance on strategy and new projects within the parameters of the monitorship, as well as ensuring ethics, compliance and risk management.
  • [8:16] What have you done to repair and rebuild trust after the diesel crisis, and how far along would you say you are on that journey?
  • [8:30] Trust is essential, no matter what is happening within the business. Volkswagen just announced the new Drive Bigger campaign, which is a pledge to be carbon neutral as a company by 2050. The company has also signed up for the Paris Carbon Accords and the California Air Resources Board numbers, with a commitment to improving emissions going forward.
  • [9:26] You started your career in an academic role. What aspects of that have helped you in your role as Chief Ethics and Compliance Officer?
  • [9:37] The biggest aspect is questioning, in terms of asking why we are doing something a certain way. Stephanie’s background outside the automotive industry has also brought a fresh perspective to break through the trope of “it’s always been done that way.”
  • [11:12] How does Volkswagen define diversity and inclusion? What is the company doing in that area, how are you measuring progress, and who are you sharing that information with?
  • [11:26] Some of the Volkswagen Group’s five new group essentials are caring for the environment, we not me, and we live diversity. Every business unit had to have a conversation with their teams about what diversity meant to them and how they could improve it moving forward. Stephanie consciously built her Ethics and Compliance team to be diverse, which enables more points of view, new ideas, and better business strategies.
  • [12:53] What type of guidelines are in place for the ethical use of artificial intelligence (AI) and machine learning? How big of a risk area are these and how much do you expect them to grow in the future?
  • [13:09] In terms of AI, the automotive industry is a little ahead of the legal rules and regulations. Volkswagen is working with a coalition of carmakers to determine ethical guidelines for autonomous vehicles. The entire automotive industry is changing on every single platform right now, in terms of electrification, ride sharing, and how people choose to own cars, so Volkswagen strives to make ethical decisions in all these areas.
  • [14:34] There will likely be an increased level of importance on these decisions for you after coming off the emissions settlement, correct?
  • [14:39] There will remain scrutiny over Volkswagen that other car companies may not have, but Stephanie is grateful for that, because it resulted in the company investing in electrification and getting on the right path for the future.

    Don’t miss our next episode! Be sure to subscribe to Principled on Spotify, Apple Podcasts, Google Play or wherever you listen to podcasts.
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