Investment adviser Hermes EOS has recommended clients vote against the candidates proposed for election to the VW supervisory board on Thursday (3 May) and called for an "external supervisory board and corporate culture review".
"Volkswagen has nominated Marianne Heiss and Wolfgang Porsche for election to its supervisory board. We recommend our clients vote against both of these nominations. The election of the candidates will result in a board with almost zero independent representation, which clearly goes against good corporate governance practice," Hermes said in a statement.
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"The company's choice of the two candidates is disappointing. The supervisory board has yet again missed another chance to enhance its independence and fill the – in our view – obvious experience and skills gaps. For us, as shareholder representatives, this casts doubt on whether the supervisory board has really understood that a governance overhaul remains paramount in the light of the emissions scandal.
"It has been nearly three years since the emissions scandal broke and we urgently need to see tangible and credible evidence of improving governance. We urge the company to conduct and report on an externally-facilitated supervisory board evaluation to identify experience and skills gaps and confirm the need for more independent expertise.
"We recognise that Volkswagen is working towards improving its culture, integrity and compliance systems. However, we believe that the efforts to date lack an analytical basis, are insufficiently focused on a broad definition of corporate culture and remain vague on key performance indicators. We urge the company to undertake a systematic, independent review and analysis of the role corporate culture played in the emissions scandal.
"We believe that a demonstrably changed corporate culture and appropriate transparency around the issues are key prerequisites for Volkswagen's successful transition towards becoming a leading provider of sustainable mobility."
A Reuters report noted Heiss had been nominated by VW to replace Annika Falkengren, a Swedish banker who has switched jobs while Porsche, chairman of VW's majority stakeholder Porsche SE, was seeking a new term on the board.
