Volkswagen faces paying out billions of dollars in fines and compensation after it admitted rigging tests on some of its diesel cars to make them appear cleaner.
Shareholder advisory firm Hermes EOS said on Monday it has "real doubts" about whether Volkswagen's main stakeholders recognise the need for fundamental reform at the company, as the carmaker deals with an emissions-cheating scandal.
Volkswagen faces paying out billions of dollars in fines and compensation after it admitted rigging tests on some of its diesel cars to make them appear cleaner, prompting Chief Executive Martin Winterkorn to resign.
In his place, the German company appointed the head of its Porsche unit, Matthias Mueller, as CEO - a decision some investors felt had been taken too quickly - and nominated current Chief Financial Officer Hans-Dieter Pötsch as chair-elect.
Hermes EOS, which engages with companies on a range of corporate governance issues on behalf of asset owners such as pension funds, said that while it was happy to see Winterkorn leave, it was concerned that top executives had been replaced by "corporate insiders".
"The supervisory board's choice... raises some real doubts whether the key shareholders have recognised the need for fundamental reform and a real new beginning," Hans-Christoph Hirt, director at Hermes EOS, said in a statement.
That concern was underpinned by the fact that both Mueller and Potsch were members of the company's management board and so thus already jointly responsible for Volkswagen's management.
"The new CEO and the incoming chair should overhaul Volkswagen's corporate governance, including the composition and effectiveness of its supervisory board, and create a corporate culture which ensures that the trust of customers and society will never again be jeopardised," Hirt said.
As a result, Hermes EOS would attend an extraordinary general meeting of VW shareholders on Nov. 9 to explain its concerns about the firm's corporate governance and suggest changes to both management and company culture, he said.
In addition, Hermes EOS - which acts on behalf of more than 40 clients and advises on $116 billion of assets - said it was in contact with VW and other carmakers and was "intensifying" its engagements in light of the scandal, he added.
