Ernst Lieb introducing the then-new Mercedes-Benz ML450 at the 2009 New York Auto Show.
The rules have changed and, as a result, so have some of the players, it seems – a crackdown on ethics snagging one of the big fish at Daimler AG, former Mercedes-Benz USA CEO Ernst Lieb.
Lieb was unceremoniously dismissed from his job after he was warned about financial indiscretions, including using corporate funds for to pay for household help and golf-club memberships for his wife, according to an investigation by TheDetroitBureau.com – as well as additional reports coming out of Europe.
Lieb was removed despite compiling a solid record of sales success, over the past few years, in an extremely competitive market. He apparently had received prior warnings over his lax attitude towards expense reimbursements but failed to recognize that Daimler was no longer willing to wink and nod at such violations.
The parent of Mercedes-Benz, Maybach and Smart now goes to great lengths to remain above reproach following a series of scandals that both hurt its image and cost it a significant amount of cash.
Daimler last year was fined $185 million fine for violating U.S. anti-corruption laws as the result of a global bribery scandal. It followed up by creating the new position of Chief Integrity Officer, the CIO taking a seat on the company’s board of management. Lieb may well have become the new board member’s first target.
Daimler also reformed its internal practices to encourage complaints from internal whistle blowers, employees encouraged to report what they perceive as misconduct by corporate officials.
In addition, a Compliance Consultation Desk has been established offering Daimler employees individual advice on questions related to the area of compliance at Daimler. Furthermore, a whistleblower station has been established inside Daimler to offer each employee, as well as external personnel, a way to inform the company of any compliance or non-compliance issues.
“As a matter of principal, Daimler aims to create a corporate culture that not only fulfills the requirements of applicable law, but also meets the highest ethical demands and is regarded as exemplary throughout the industry. To achieve this goal, Daimler will successively take further initiatives in addition to establishing this new Board of Management position,” the company said in a statement in September.
As part of the effort, Daimler created a global Compliance Organization, placing compliance managers in various subsidiaries and operating units around the world. It also developed an international training program to explain the regulations and procedures employees are required to follow.
Last year, the Stuttgart-based company acknowledged a series of ethical breaches occurred despite having put in place an ethical behavior policy. Violations of the poicy – including the use of bribes to secure business in 22 countries — continued through 2008, according to the U.S. government, and eventually netted the company about $90 million.
In its settlement with the U.S. Department of Justice, last spring, Daimler’s $185 million fine included a $93.6 million fine and a $91.4 million disgorgement of illegally-generated profits. (Click Here for that story.)
At the time of the DOJ settlement, CEO Dieter Zetsche said that bringing the company into compliance with ethics laws “has a high priority.”
“No business in the world is worth violating applicable laws, regulations or ethical standards,” Zetsche added.