Martin Winterkorn, Volkswagen’s chief executive, has been sacrificed in an act of contrition to the shareholders, regulators and lawyers circling the German car conglomerate. His departure will matter little to the long-term fortunes of VW without an overhaul of the company’s governance.

The emissions-rigging scandal, which is being talked about as a corporate failure on the scale of Enron or WorldCom, extends beyond the CEO. A company which has admitted to a flagrant violation of global rules and went to such extensive lengths to hoodwink officials has bigger questions to answer than just who takes the blame. Looking at those with whom Winterkorn shared the top table might be one place to start.

To British eyes, the way Germany companies are structured looks a bit ungainly. At the top, VW has a management board made up of executives from across the different business functions, and a separate supervisory board, which is supposed to appoint and then keep the managers in check. Half of the supervisory board are voted for by shareholders, the rest are from a wider group of stakeholders. The make-up is a mixture of shareholders, union officials and – in VW’s case – ministers from the Federal State of Lower Saxony, where the firm is headquartered.

Further entangled in the corporate web are the various companies owned by the Volkswagen Group, such as Audi, Seat, Skoda, Bentley, Porsche and so on. Some of those have their own boards, with their own chairman and annual reports. Members of one board sit on or chair others, supposedly providing scrutiny and asking the difficult questions we would expect of a normal director. Winterkorn, who previously headed up Audi before the entire VW Group, was also chairman of Audi’s supervisory board and Porsche’s management board. Heaven help anybody who has to draw the diagram.

The goal is to link disparate subsidiaries and management teams into one giant organisation. However complex, the system has been credited with encouraging family-owned firms and allowing German businesses to take a much more long-term approach than their impatient Anglo Saxon counterparts. There are countless examples where this is precisely what happen,s and many who believe that the two-board structure with a big family shareholder is a worthy model. The Schröder family, for instance, own nearly half of Schröders and two family members sit on the board. They have won plaudits for driving a long-term outlook at the company.

In the case of VW, however, it appears to have failed. Volkswagen succumbed to the temptations of patronage, privilege and favour. By many accounts Winterkorn owed his place at the top to a bitter power struggle that embroiled the Porsche family and soured boardroom relations. He has been there for eight years – a little longer than most CEOs at European companies. A strong and forceful management team requires daring, bold and fearless overseers and a governance system which encourages them to ask the difficult questions. For VW to get away with such an audacious con, proper oversight must have been lacking.

The point is that a company needs both the proper structure and the right personnel. One cannot make up for a lack of the other. Somebody at VW messed up – that is beyond question. Fitting 11 million cars with a piece of software which artificially reduces vehicle emissions during regulators’ tests is not the work of a few rogue employees. That decision was taken and put into action by people of reasonable seniority. But the reason it continued, unchecked, for so long is because the structure of the company stifled honest and transparent oversight.

If the board members knew what was happening, that is clearly severe – and possibly criminal – malpractice. If they didn’t, then that is a dangerous failure of responsibility. Either way, VW need to assess that elusive corporate characteristic – culture – and work out whether their governance rules helped create an environment in which breaking the law was an acceptable course of action in order to sell cars.

Without a robust system that holds management to account, there is a risk people will fall into the temptation to cut corners. Say, for instance, your new vehicles are not meeting tough emissions requirements. You might consider the quick fix if nobody will question what you’ve done, how it works or even notice something has changed. We demand more ethical behaviour from our senior executives, and flagrant abuses of power are rare. But having the right structure in place is fundamental.

The problems at VW extend beyond Winterkorn. His failures are both a symbol and a product of a system which has proved itself dysfunctional. Removing the top brass cannot be the end of the matter. Good corporate governance places ethical and fearless directors into roles which let them ask penetrating questions, hold managers to account, advise on strategy and guide the business through good times and bad. Times have turned bad very quickly at Europe’s largest carmaker, and the board cannot imagine that one decapitation will hold back the onrushing tide of lawsuits and fines, or repair VW’s shattered reputation. However, if the company puts as much effort into fixing corporate governance as they did into fixing emissions tests, they could yet stop it being torn apart.

• Simon Walker is director general of the Institute of Directors