FRANKFURT -- Volkswagen AG has chosen labor law specialist Frank Fabian to head a newly created governance risk and compliance department.
The position will create an independent management role that will strengthen compliance with the company's code of conduct, the automaker said in a written statement.
“Volkswagen's good name is our most valuable asset. There can be no compromises as far as complying with our code of conduct is concerned. Volkswagen is adopting an innovative approach by bringing together governance, risk and compliance in a single department,” said Volkswagen CEO Martin Winterkorn, commenting on Fabian's appointment.
Fabian,44, will report directly to Winterkorn. He joined the Volkswagen Group in 2001 as head of the labor law department. He was closely involved in developing company policy on compliance with corporate governance and helped set up the compliance department. Prior to joining VW, he worked in private law practice.
Fabian will take charge of policing the company's code of conduct just a few years after the automaker was shaken by accusations of bribery and sex parties involving executives.
In 2009, Klaus Volkert, the powerful former head of VW's works council and a member of the supervisory board, was jailed for 33 months for breach of trust, as well as breaches of German labor law. His trial heard accusations of bribe taking and sex parties with prostitutes.
In 2007, former VW chief personnel officer Peter Hartz received a suspended two-year sentence and a 576,000-euro fine for his involvement in nearly 2 million euros paid to Volkert between 1995 and 2004 in an attempt to win union support for company decisions.