VW has paid a deservedly high price for its emission scandal, with more than $20 billion in total fines, having suffered severe damage to its reputation, and with some of its senior management in the process of being prosecuted. Today many consumers around the world want nothing to do with VW, wondering if its brand can be trusted. However, surprisingly, that did not prevent VW from knocking Toyota from the top sales spot for cars globally in 2016. The reason is China, where comparatively few of VW’s diesel cars are sold, and the appeal of foreign brands continues to grow.
This raises the question — even though not all global consumers appear to care about corporate values and perceived trustworthiness (in the case of China, being more concerned about being perceived to be wealthy enough to own a foreign brand than the future state of the environment), why should companies still be incentivized to have a corporate conscience, take a public stance on supporting strong corporate governance, and do the right thing? There are a plethora of reasons, of course, among them being within the bounds of the law, being seen as operating in a manner consistent with internally accepted norms, and being competitive with other companies doing the same thing.
Moreover, in the face of risks that are reshaping the world’s definition of normality, steadfast adherence to value systems may be the only certain thing we can hang on to in the midst of so much uncertainty. Values may be the only space in our world where absolutes are permissible. If a firm stands for safe food products, it should be a singular focus to provide safe food all the time, to all consumers in all markets. Recent polling shows that — apart from markets with unusual purchasing characteristics such as China — in the long run, and in the majority of cases, companies are rewarded for doing so.
