Christine Hohmann-Dennhardt came to Volkswagen Group highly praised and equipped with excellent credentials when she was appointed the automaker's head of integrity and legal affairs in September 2016. She leaves at the end of this month following a failed power struggle.
Hohmann-Dennhardt, a former constitutional court judge, was supposed to grant legitimacy to VW's efforts to reform its corporate governance and a culture prone to cover-ups. Chairman Hans Dieter Poetsch had personally worked out the deal with his counterpart on the supervisory board of her then-employer Daimler AG.
At the time Poetsch said he was "delighted" that she had agreed to come to Wolfsburg "and that we can build on her outstanding competence and experience."
Under Hohmann-Dennhardt, integrity and law would be a function anchored at the highest level of the group represented by a seat on the management board for the first time – "a clear indication that these issues are extremely important to Volkswagen," as VW Group CEO Matthias Mueller described it to shareholders.
Apart from some non-descript improvements in the area of compliance (for which Volkswagen was already awarded full marks by a benchmark index provider right up until the scandal), however, her sole legacy, according to VW was a campaign to raise awareness for integrity launched under her leadership.
Various German media reports blame her poor English, leaving key negotiations for other managers to handle, while others allege VW's powerful trade unions for throwing obstacles in her path. Some aspects no doubt have truth to them, but it sounds more like excuses lamely put forward in an attempt to spin the development in the company's favor.
Departing under a cloud like this is an admission of defeat, certainly, but at least she can say she left on a principled stand. Ultimately the more spectacular failure came from the group’s supervisory board -- who hired her at great expense no doubt -- and its chairman Poetsch in particular.
Power conflicts were automatic given the nature of her appointment. The whole reason was to bring someone whose moral integrity was above reproach to clean up a company that systematically concealed its fraudulent emissions for years.
As the highest body for oversight, VW's 20 non-executive directors are tasked with controlling senior management and it was their responsibility to have provided Hohmann-Dennhardt with the necessary confidence, support and confidence she needed to execute her plans.
It's impossible to imagine she could have done greater harm than good if she had been allowed to follow through. VW was more in need of her than she was of them.
"Behaving with integrity is an important pillar of the new Group strategy," she said in September. "Particularly in light of the painful experiences of the last twelve months it is important for us to reinforce and expand integrity management."
Her sudden departure also raises further doubts as to whether Poetsch has been badly miscast. He was installed into office at the behest of the Porsche and Piech families, which are VW's largest shareholders, over the initial objections of the second-largest shareholder, the German state of Lower Saxony.
Poetsch's fingerprints in particular were all over Hohmann-Dennhardt's appointment, and by releasing her from her contract with Daimler he vouched for her attributes with his own credibility as chairman. Just as he had earned praise with her appointment, her defeat therefore must be his to share as well.
Poetsch may have been a brilliant finance chief who helped to build VW Group into the financial machine it is today, but so far conflicts of interest have made him an ineffectual chairman -- unable to even coax his former executive colleagues into giving up on their bonuses last year despite a record loss in 2015. Four and a half hours into his first annual meeting as head of the supervisory board in June, he was still fighting off motions to remove him as head of the assembly.
The Austrian belonged to the management board stretching back to the time when the U.S. "clean diesel" strategy was approved. How credible can he be when he paints himself as a "chief investigator," promising to take actions against anyone at the company who knew of the emissions rigging regardless of rank? Matters were made worse when he himself became the target of a criminal investigation by German authorities in November for suspected market manipulation.
As if to emphasize the problems further, those same prosecutors in Wolfsburg’s judicial district of Brunswick extended their investigation into the diesel scandal to include 37 suspects from a previous 21, now including former CEO Martin Winterkorn for potentially committing fraud.
At best casting Hohmann-Dennhardt aside so quickly suggests her appointment was a cynical publicity stunt to profit from her "brand" as a former career judge who helped Daimler clean up a corruption scandal in the U.S. At worst it only serves as further ammunition to critics who believe Wolfsburg's insular culture can never be reformed from within.
One thing at least hasn't changed at least, and for that investors and stakeholders alike should be thankful. As part of its criminal settlement with the U.S. government, Volkswagen will still have to cooperate with an independent monitor for three years.
Let's hope whoever that is has far more success than Hohmann-Dennhardt.