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Emissions and admissions – VW forced to come clean

Emissions and admissions – VW forced to come clean

Michael Horn, US Chief Executive of Volkswagen, made a public apology last night following claims that Volkswagen used a defeat device to falsify car emissions data. Shares in Volkswagen have fallen another five percent today after losing almost a fifth of their value on Monday. 

In the wake of a scandal, CEOs should think twice before putting on a brave face. New research finds that showing sadness in your facial expression during an apology could save your organisation from poor financial performance persisting for up to three months. The study, ‘Saving face? When emotion displays during public apologies mitigate damage to organisational performance’, was conducted by Gabrielle Adams, Assistant Professor of Organisational Behaviour, London Business School and Dr Leanne ten Brinke, UC Berkeley Haas School of Business.

Gabrielle Adams, Assistant Professor of Organisational Behaviour, London Business School, says: “Apologising well matters. And if you’re the CEO, it is critical. In the wake of a scandal we often expect a public apology. But not all apologies successfully repair public confidence or, crucially, investor confidence.

“Our research finds that CEOs who demonstrate sadness in their facial expressions when apologising are largely able to restore confidence and keep their companies on an even financial trajectory. On the other hand, CEOs who say they are sorry but fail to show sadness in their faces find their financial bottom line adversely affected for as long as three months after the apology. Financial backers are less willing to support them and shareholders start selling off shares.”

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