Recent news about the Volkswagen emissions scandal has left industry watchers and consumers with more questions than answers. The company actually installed a “defeat device” to manipulate vehicle emission tests? Whose idea was this? How long did executives think they could get away with cheating on emissions standards? What are the financial and reputational consequences of this scandal on the company – in the short and long term?
All of those issues are important, yet my first question about the VW mess was this: Where has the CFO been?
CFO responsibility no longer ends with financial issues. Today’s CFOs must have insight into all operations and processes that impact the company’s business outcomes. They must be ready to take on a more strategic role. In fact, a growing number of CFOs find themselves supporting innovation and transformational change in the business.
That’s why this scandal is so puzzling. Did the CFO not realize what was happening? Could he have put a stop to this misguided, potentially criminal plan from the beginning? Should there have been better internal controls to reveal that 11 million cars were sold with software that disguised the true emissions results? Perhaps Volkswagen needed to have better governance and compliance standards. What role does risk management play in the operations and manufacturing divisions of VW?
As more information becomes public, perhaps the truth will become clearer. But what’s happening at Volkswagen should be a warning for all CFOs. You can’t afford to have blind spots in any part of your operations. And looking the other way is not an option.
Get closer to the business and make sure you understand what is happening and why in all aspects of the organization. The future of your company – and your career – may depend on it.
For more on the expanding role of the CFO in today’s enterprise, see CFOs: It’s Time To Step Up Your Game.