According to critics, the planned change in management and the reorganization of the group structure at Volkswagen violate the rules of good corporate governance. But the Porsche and Piëch families implemented it despite conflicts of interest and thus cemented their power in the group.
The replacement of CEO Herbert Diess is changing the balance of power at Volkswagen: the Porsche and Piëch families, who call the shots at Europe’s largest car manufacturer via Porsche Automobil Holding SE, want to be more involved in decisions than before, as well as from the environment of the Supervisory Board can be heard. "They want to have a closer look at the implementation of the strategic guidelines," a person with knowledge of the events told Reuters. The future CEO Oliver Blume - the preferred candidate of the Porsche Piëch clan - should pay more attention to the operative business than his predecessor.
Blume will lead the Wolfsburg multi-brand group from September 1st in addition to his duties as CEO of Porsche. Investor criticism of the dual role rolls off the major shareholders. They also do not see the success of the planned IPO of Porsche AG in jeopardy. Rather, Blume should ensure that the move onto the trading floor is implemented despite the concerns. Because this is an important project for the Porsche/Piëch clan. "The structure of the IPO fulfills the interest of the families in further cementing their control over Porsche. They will not be dissuaded from this plan." says Hendrik Schmidt, an expert in corporate management at the fund company DWS, which has investments in both Volkswagen and Porsche Holding.
It is planned that the families will receive a blocking minority in the sports car manufacturer that Ferdinand Porsche founded in 1931. "The families are actively involved - something that was denied to them for a long time," states another person from the corporate environment. This became clear when the top management was replaced, and the families exerted their influence here. They finally realized that Diess had been allowed to do so for too long. The impulsive, often unpredictable Volkswagen boss had faced dismissal several times in the past two years because he was at odds with the works council and did not involve management in decisions.
The state of Lower Saxony, which is involved in Volkswagen, had also moved away from Diess. For a long time, the 63-year-old was only able to hold on because the families held their hands protectively over him. According to insiders, however, doubts have increased as to whether he is still the right person to implement the numerous changes he has initiated. The board of directors then lowered the thumb.
Blume should now lead the change initiated by Diess into a leading mobility service provider in calmer waters, so the families wish. "There are companies where the transformation is going more smoothly," says one of the insiders. At Volkswagen with its conflicting interest groups, conflicts under Diess were publicly held. That, too, is set to change with Blume. However, investors and industry experts object to the fact that the Porsche boss should wear two hats in the future. There are also internal doubts in the company, which is closely linked to its main owner: "Is one boss enough for two listed companies?" asks a manager.
Some of the experts on corporate governance formulate clear criticism: The rules of good corporate governance have been ignored at the family-dominated Volkswagen Group for decades, says Manuel Theisen, emeritus professor of business administration at the University of Munich, who specializes in such issues. "The appointment of Blume is a declaration of bankruptcy of the personnel policy of the supervisory board. There is no vote. It is simply the next student of the Porsche and Piëch families who is planted in an impossible situation." Running a global car company like a part-time job and preparing for an IPO at the same time is hardly possible.
Porsche SE considers allegations of a lack of transparency to be unfounded. Both Volkswagen and the listed holding company, through which the families hold 53.3 percent of the votes in the group, introduced rules years ago to avoid possible conflicts of interest, says a spokesman. Dozens of lawyers are involved in important decisions, who ensure that managers with dual functions affected leave the room at meetings. It is known that Volkswagen's chairman of the supervisory board, Hans Dieter Pötsch, who also heads the executive board of Porsche SE, leaves the room during votes where he could be biased.
But that has not silenced the criticism. "We have the largest European car company and a number of major shareholders who are not fulfilling their responsibilities," summarizes Theisen. The families subordinated everything else to the Porsche IPO. They don't care whether the company is worth 60 or 80 billion euros. "The central motive is power."
