Hermes tells VW shareholders to oppose election of new board members
Shareholder advisory firm Hermes EOS, part of Hermes Investment Management, is set to put the cat amongst the pigeons at Volkswagen's annual general meeting tomorrow.
Hermes has recommended that shareholders vote against the appointment of two new supervisory board candidates, raising concerns that the company is limiting independence, and is pushing for a "review of corporate culture".
Marianne Heiss, an author focused on corporate diversity, and Wolfgang Porsche, a member of the Porsche family dynasty famous for its cars, had been nominated to join the supervisory board.
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“The companys choice of the two candidates is disappointing," said Michael Viehs, associate director of responsibility at Hermes EOS.
"The supervisory board has yet again missed another chance to enhance its independence and fill the – in our view – obvious experience and skills gaps."
Hermes had instead wanted Volkswagen to create an external supervisory board, in light of the emissions scandal where the car manufacturer was found to be cheating its cars' emissions tests.
Volkswagen was "working towards improving its culture, integrity and compliance systems", the advisory firm conceded, but lacked an analytical basis, was "insufficiently focused" on a broad definition of corporate culture and remained vague on what key performance indicators should be.
Hermes advocated that Volkswagen launch an independent review, similar to the Salz Review which Barclays launched after the Libor-rigging scandal.
Added to that, Hermes also urged the company to "enter into a dialogue" with investors around how it might change its business model to reduce climate change concerns.
Volkswagen was identified by the investor initiative Climate Action 100+ as one of the world's 100 biggest greenhouse gas emitters and, though Hermes said emphasis on electrified and autonomous vehicles was a positive step, it added Volkswagen "has further to go".
The next development would be to extend its climate change reporting to align with the Task Force on Climate-related Financial Disclosures, a Financial Stability Board-backed group chaired by Michael Bloomberg.
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