Daimler's First Female Board Member 'Don't Get Mad, Retaliate'

In a SPIEGEL interview, top manager Christine Hohmann-Dennhardt discusses her role as the first woman on Daimler's management board, the limitations of quotas for women and her fight against corporate corruption.

In February, German car manufacturing giant Daimler appointed Christine Hohmann-Dennhardt as the first-ever female member of its management board during a period of considerable debate about the dearth of women at the helm  of the country's blue-chip corporations. Before assuming her new duties at the Stuttgart-based company, the 61-year-old, born in the eastern city of Leipzig, served as a social welfare judge, justice minister in the western state of Hesse with the center-left Social Democratic Party (SPD) and for 12 years as a justice at Germany's highest court, the Federal Constitutional Court in Karlsruhe.

In her new role, the married mother of two is working to clean up corruption at Daimler, which faces billions in fines in the United States if it is unable to more effectively combat the problem. She spoke with SPIEGEL about being a powerful woman and whether quotas can help more women achieve similar success.

SPIEGEL: Ms. Hohmann-Dennhardt, you have often been described as a left-leaning Social Democrat and drove a BMW 850 CSi until just recently. Above all there is one thing you are not -- a man.

Hohmann-Dennhardt: So far you're right on all counts.

SPIEGEL: Not too long ago, a woman like you was unlikely to become a board member at Daimler. Was there resistance, or is Daimler more progressive than we thought?

Hohmann-Dennhardt: The company is more progressive than many believe. And there are some bets you just happen to lose.

SPIEGEL: Daimler is viewed as a macho company. A former Mercedes-Benz CEO once said to a female journalist who had criticized the rear-end of an S Class model: 'Girl, your rear could also use some improvement.' Have you heard things like that  yet, or do all Daimler managers use more civilized language nowadays?

Hohmann-Dennhardt: No one has said anything like that to me, at any rate. People are very friendly. But I have been confronted with similar language in my life. My approach has always been: 'Don't get mad. Retaliate.'

SPIEGEL: There are about 180 board members in the 30 companies listed on the DAX stock index, but only five are female. Do you believe that a quota for women  is needed to change this ratio?

Hohmann-Dennhardt: There are two things that should be kept separate. First, when management boards are assembled, qualified individuals from outside the company are sought, and not the most capable employees inside a group. In this sense, a quota is conceivable. Second, attempts must be made within a company to make it easier for women to attain additional qualifications and move up the corporate ladder. Mentoring programs, part-time work and childcare are helpful in this regard. But there should at least be clear targets as to how high the percentage of women in management positions ought to be.

SPIEGEL: Should these targets be prescribed by law?

Hohmann-Dennhardt: Free will is always better than compulsion. In the past, companies pledged to put more women in senior positions, but only recently have efforts in this direction become more visible. I'm in favor of a quota, but that's my personal view and not me speaking on behalf of the company.

SPIEGEL: Daimler CEO Dieter Zetsche is against quotas. How do you deal with this?

Hohmann-Dennhardt: I don't have a problem with it. Mr. Zetsche points out, and rightfully so, that Daimler has already set its own clear goals. The share of women in top positions is supposed to be increased to 20 percent by 2020. That's a very ambitious goal in a company that encompasses many technical professions in which the share of men is already disproportionately high. Besides, the future evaluation of senior executives and their bonuses depend on the attainment of this goal. That's certainly an incentive.

SPIEGEL: You are seen as leftist and critical of business. How is that position received on the Daimler board?

Hohmann-Dennhardt: Where you stand in a party doesn't just depend on your own point of view, but also on how others develop. Sometimes I've been seen as leaning to the right and sometimes to the left. This is probably more indicative of a certain stability of my character in a changing environment. Besides, I am not critical of business, but take a social view of things. Of course profit is the central motive in doing business. That's the engine of development. But one shouldn't forget that employees make success possible in the first place and, for that reason, should also benefit from the profits.

SPIEGEL: You have also criticized companies for 'craving ever higher returns on equity and celebrating their success by eliminating even more jobs.' Was this criticism aimed at Daimler, whose former CEO Jürgen Schrempp's motto was: 'profit, profit, profit?'

Hohmann-Dennhardt: No. That statement applied to companies in general. Of course businesses are under pressure to maximize profits. But in recent years there was a certain one-eyed way of looking at the question of what our goals should be. Fortunately that view has been put into better perspective. Since the financial crisis, many feel that it's self-evident that companies must take their social responsibility into account.

SPIEGEL: You are now the Daimler board member responsible for 'integrity and legal affairs.' What exactly does that mean?

Hohmann-Dennhardt: In the United States, this falls under the concept of 'compliance.' My job is to ensure that laws and internal rules are complied with, and not because we are compelled to do so, but out of conviction.

SPIEGEL: The establishment of your position on the board can be attributed to pressure from the US Securities and Exchange Commission. Daimler has already paid $185 million (€132 million) in fines because of a corruption scandal. But the US authorities can reopen the case at any time if the company does not take consistent steps to fight corruption. How do you intend to achieve this?

Hohmann-Dennhardt: We have to make it clear to all employees that the consequences will be very serious for the company if they don't play by the rules. And we also have to make sure that the rules are accepted. There are countries in which corruption is widespread. There we have to provide employees with the support they need to abide by the rules. They have to know that we support them wholeheartedly, even if it means that they sometimes don't secure contracts as a result.

SPIEGEL: Daimler truck managers say that in certain African, Asian and South American countries it's impossible to sell vehicles without paying bribes. What do you tell them?

Hohmann-Dennhardt: I'm familiar with this argument, but I can't accept it. Daimler is a global corporation with outstanding products that are in demand everywhere. Daimler can set standards. If the market leader doesn't take advantage of its position, nothing will ever change in these countries.

SPIEGEL: Have you already stopped doing business with some countries?

Hohmann-Dennhardt: Yes. In addition to Myanmar and North Korea, we are no longer active in Iran. There are also high-risk countries that have to be considered very carefully. First we determine the conditions under which we do business there. As a result, in certain high-risk countries we only sign contracts directly with government offices and no longer accept middlemen. This reduces the risk of corrupt payments.

SPIEGEL: Then Daimler will have to bow out of many markets where nothing works without middlemen.

Hohmann-Dennhardt: We won't be bowing out of markets. We aren't as pessimistic as you are. It is possible to conduct clean business.

SPIEGEL: You also use controversial methods when you are pursuing the suspicion of corrupt practices. For example, employees can act as whistleblowers and anonymously report their suspicions. Isn't this an invitation to denounce unpopular coworkers?

Hohmann-Dennhardt: The company has to know where things are going wrong. Employees who report possible infractions must be protected. They are not denigrating the company. But you're right, the possibility of filing anonymous reports also carries the risk of someone reporting something merely to harm a coworker. That's why this kind of system has to be handled with great caution.

SPIEGEL: How do you intend to prevent abuse?

Hohmann-Dennhardt: By protecting the rights of the accused. After all, they are merely being accused of something initially. They haven't been convicted of an offence yet. That's why we have to ask ourselves: Can the accused only comment at the end of the investigation, or can they explain their side of the story before then? How does one conduct the investigation, and to what extent is it expanded? How does one proceed when someone has reported a suspicion but no facts? We have to handle these cases with sensitivity. Otherwise, employees would feel watched and unfairly treated, and the entire process would be discredited, even if it's justified.

SPIEGEL: Former FBI Director Louis Freeh is monitoring Daimler on behalf of the SEC to ensure that it consistently takes action against corruption. Many Daimler managers are complaining about his ruthless approach. Can you stop the former FBI director if he goes too far?

Hohmann-Dennhardt: I'm not a counterbalance to Mr. Freeh. I also don't have the impression that he intends to see the smallest offences severely punished. He has his job and I have mine. He looks for deficits, while I try to establish a sustainable compliance system. Of course there are occasionally differences, over how far an investigation can go, for example. American law is not as strict as German law when it comes to data protection. I have made it clear that for us at Daimler, compliance also means that we comply with German laws, which include data protection.

SPIEGEL: Can you examine the emails and telephone lists of Daimler employees when a suspicion has been reported? Where are the boundaries?

Hohmann-Dennhardt: Initially, the boundaries mean that there has to be concrete suspicion before such data can be used. And then we adhere strictly to the requirements of the law.

SPIEGEL: Corruption cases were covered up for years. Now companies are being accused of the opposite problem, namely of recklessly firing employees so they can present themselves as corruption-free companies. Labor courts have concluded that some Daimler managers were fired for no valid reason.

Hohmann-Dennhardt: There are cases in which dismissal is the only option. But I consider it my job to ensure that proportionality is preserved even when sanctions are imposed.

Translated from the German by Christopher Sultan
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