Any shareholders hoping Volkswagen would cut to the chase and talk about corporate governance reform at today’s annual meeting have been quickly disappointed.
But getting to the point may, in fact, work to some minority shareholders’ advantage – if today’s meeting runs on past midnight it will automatically void anything that is agreed today.
Volkswagen chief executive Matthias Müller (pictured) offered a robust defence of his company in an opening speech, but he failed to address many of the key issues about which investors have long complained – including management pay, a lack of independence on the company’s supervisory board, and a voting structure that entrenches power in the hands of the Porsche and Piech families, Lower Saxony and Qatar, writes Patrick McGee in Hanover.
Mr Müller offered a summary of his “Strategy 2025” plan unveiled last week, in which VW will push to become a leader in electric cars. He also apologised for the diesel emissions scandal and spoke of regaining customer trust. “
“What is done cannot be undone,” he said, later adding: “A shock like the diesel issue can also have a salutary effect.”
But his examples of reform to date were either symbolic — scrapping the company’s boardmember-only elevators at its offices and selling some Airbus planes – or vague, such as guaranteeing product compliance.
Investors have not begun speaking yet, but pre-written remarks suggest complaints about VW’s governance structure will be central.
Dr Hans-Christoph Hirt, Co-Head of Hermes EOS, said in prepared remarks:
Volkswagen needs an overhaul of its corporate governance, including the composition and effectiveness of its supervisory board. As a first step, we urge the company to undertake an externally-facilitated supervisory board evaluation as soon as possible after the AGM.
Christian Strenger, a German corporate governance expert, said:
The board was — and is — solely and wholly responsible for the disaster!
Several shareholder advisory groups have already recommended investors vote against the board. They have also asked for a special audit of the supervisory and management boards to determine whether they were implicated in the emissions scandal.
But minority shareholders have very little power, owning just a little more than 10 per cent of the company. What they could do is drag the meeting on past midnight – thus, as per German law, voiding anything that is agreed today. That would trigger a new AGM, likely to be held in August, but it’s unclear what that would achieve.