But there's a lot of levels in between that are glossed over in this story. It's certainly possible, even likely, that the board did not know. It's also possible that the CEO and head of business unit did not know. But "rogue software engineers" doesn't cut it.
Suppose you've magically cracked a tough software problem that has been causing lots of hair-pulling and executive pressure. What happens next?
1. Your boss asks "how did you do it?" What's your answer? Is your boss now complicit? (Or merely suspicious?)
2. Your QA department asks how to test your fix. Their code coverage tool makes sure that the branch you put in actually gets executed. Do they ask what use case this is? You can't just check in and push to production in an embedded automotive environment.
3. Your patent lawyer stops by and asks you to file a disclosure about your invention. How do you convince the legal team to leave the flagship "clean diesel" technology a secret?
4. A new hire in the group is excited about how you guys have done great things for the planet. (Maybe he or she has been watching to many GE advertisements.) Your coworkers want to understand and maybe improve on your design. What's your answer when they ask for a description of how the magic works?
It seems unlikely to me that this deception could be executed without being widely known within the team. Management may have been deliberately obtuse, I suppose, but this is not about some insider siphoning off half-pennies. It's a key feature that VW actively promoted, and it's inconceivable that nobody else asked how it was accomplished.