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Shareholders demand changes at Volkswagen top board

Volkswagen shareholders have once again criticized the company's corporate governance, demanding greater independence for the board and expressing growing concern about the dominance of two families in management.

At a virtual annual general meeting, several major investors criticized the fact that Volkswagen CEO Oliver Blume is performing a double duty as head of Volkswagen and Porsche AG.

"Mr. Blume, we call on you once again: give up one of your board seats," said Ingo Speich of Deka Investment, saying the conflict of interest in the carmaker's management structure was "extremely problematic" and causing "serious reputational damage and enormous financial losses."

Volkswagen's share price has fallen by almost 25 percent in the past year, from 140.4 to 105.6 euros, underperforming the European auto index and Germany's DAX, LSEG data showed.

According to Reuters, the Porsche and Piech families effectively control Volkswagen through the holding company Porsche SE, which has a majority of voting rights in the company.

Power, not the market...Wolfgang Porsche, head of the supervisory board of the holding company Porsche SE and sports car manufacturer Porsche AG, has previously dismissed allegations that poor management was to blame for the share price decline, blaming poor performance and high costs.

However, four investors say that the board's lack of expertise in key competencies such as electrification and digitalization is one of the reasons why VW cannot move forward.

"It increasingly seems that power, not the market, dominates Volkswagen," said Hendrik Schmidt of asset management company DWS.

Blume and VW supervisory board chairman Hans Dieter Poetsch on Friday defended the dual role of CEO, arguing that it benefits cost-cutting efforts at both companies.

Janne Werning of Union Investment called on Blume to stop ignoring investor criticism and to finally address "the obvious management flaws before VW sinks even deeper into crisis."

Autonews