Of course senior executives do know!
The Economist 5 March, VW former boss had been handed a memo informing about “inconsistencies in emissions from its diesel cars.” “..it is not known whether he read it as it was included in a batch of extensive weekend mail”
Does anybody know how many people were involved in writing that memo? Does anybody know how many phone calls and meetings there were where the memo was discussed?
Are we unable to call a spade a spade?
It seems to me that since the beginning of the crisis, there has been continuous efforts to excuse senior executives from any wrongdoing by showing them as ignorant of what was going on. They did not know. These excuses, however, have made them appear as stupid, as Steve Eisman, from FrontPoint Partners said (http://www.businessspectator.com.au/article/2016/3/25/markets/how-executive-ignorance-brought-global-financial-system-its-knees?utm_source=exact&utm_medium=email&utm_content=1910855&utm_campaign=kgb&modapt=). Yet, this stupidity has not caused them overall to lose their well and highly paid jobs (some of them earn millions!). VW former boss had the courage and the integrity to resign immediately.
And nobody has raised a comment about all this. It seems normal that a highly paid executive, that has been offered a “position of administrative or managerial responsibility in an organisation” is unable to perform in that position by not being responsible of the activities going on under his/her position.
To me, this seems the highest underperformance ever. Nevertheless, these executives were still paid their high salaries and bonuses,…because they did not know!
They did not know that they had mandated to stop some controls that could have spotted the issue. They did not know that they hold that position to ensure people produce what they have to produce. By not knowing, therefore, these executives are clearly showing that they were not doing their job. They went on with their positions and bonuses as if they had been doing their job though,…unless they were really doing their job, and this job consisted of ensuring people were producing smoke to disguise wrongdoings, that people were bypassing the legislation to get easy but wobbly revenues…..was this the real story? It would make more sense to me than the one we have been told, where executives were ignorant or stupid and did not perform in their highly paid jobs but continued to hold them.
Nothing has changed since the crisis. Companies still behave in the same way. I am a firm believer that until the root cause of a problem is addressed, the problem will still be there. Based on this, we still are in crisis and it is not going to get resolved any time soon unless we start tackling the corporate world and their ignorance or stupidity….if this is really the root cause of the problem.
In the meantime I am going to tell my boss that I did not know about the problem…and see if I can get away with it and with my bonus!