Volkswagen board comes under fire from shareholder group

A leading shareholder group attacked scandal-ridden Volkswagen today as the German cars giant faced down criticisms over corporate governance at its annual meeting in Hanover.

Hermes Equity Ownership Services, representing around 20 pension fund investors, is calling for a “radical” overhaul of the group, which recently set aside €16.2 billion (£12.5 billion) to pay for the debacle over fixing emissions tests and pushed it to its first loss for more than 20 years.

The adviser wants reform of the supervisory board, which is supposed to monitor the main management board. But Hermes’ Hans-Christoph Hirt said the board was responsible for a “culture in which the emissions scandal was able to unfold and remain undetected for many years”.

He claimed the board also lacked independence from major shareholders including the Porsche family, which endorsed the previous management today.

Prosecutors are investigating former chief executive Martin Winterkorn and brand chief Herbert Diess over whether they effectively manipulated markets by delaying the release of information about the firm’s emissions test cheating.