How Materiality Impacts Reputation
Corporate scandals: how Boeing, Volkswagen and Nissan could have seen it coming
Several global companies have been shocked by scandals and crises in recent years.
Two Boeing 737 MAX 8s crashed in less than five months, killing 346 people. Volkswagen was found to have been cheating emissions testing over a period of years. Former Nissan Motor Co chairman Carlos Ghosn and former representative director Greg Kelly were arrested for allegedly declaring only half of the ¥10 billion of compensation Ghosn received from 2010 to 2015.
These crises raise questions about why various governance, environmental and safety risks hadn’t been foreseen.
Our analysis shows that all three companies had failed to report material information in the years leading up to the scandals – Boeing on product and service safety, Nissan on governance and Volkswagen on emissions.
To read the full "How materiality impacts reputation" report, please fill in the form on the right.
Two Boeing 737 MAX 8s crashed in less than five months, killing 346 people. Volkswagen was found to have been cheating emissions testing over a period of years. Former Nissan Motor Co chairman Carlos Ghosn and former representative director Greg Kelly were arrested for allegedly declaring only half of the ¥10 billion of compensation Ghosn received from 2010 to 2015.
These crises raise questions about why various governance, environmental and safety risks hadn’t been foreseen.
Our analysis shows that all three companies had failed to report material information in the years leading up to the scandals – Boeing on product and service safety, Nissan on governance and Volkswagen on emissions.
To read the full "How materiality impacts reputation" report, please fill in the form on the right.
“Our study has revealed that when it comes to materiality analysis, no news is definitely not good news.”
Donato Calace, Director of Accounts and Innovation, Datamaran
Materiality analysis can prevent crises that ruin reputations and slash stock prices
The report examines each company’s reporting to assess whether they disclose sufficient information on their governance and practices on the issues related to these crises. It explains how a lack of transparency is an indicator of a potential forthcoming scandal. As a result, greater disclosure on a company’s governance and practices on material issues can help to avoid these crises.
A robust, data-driven, timely and regular materiality process can highlight all relevant material topics and reveal red flags before a scandal happens.
