VW ‘an accident waiting to happen’

By Laurie Bennett

September 26, 2015 at 7:53am

Experts on corporate governance tell the New York Times they’re not surprised by the troubles at Volkswagen.

Company CEO Martin Winterkorn resigned this week after revelations that more than 11 million cars had been equipped with software designed to falsify emissions tests.

Oversight of the German company has been split between family stockholders, government and labor interests. As the interactive Muckety map above shows, stakeholders include Qatar and Lower Saxony, a German state.

Until earlier this year, Ferdinand Piech, grandson of Porsche founder Ferdinand Porsche, was chairman. He stepped down after a failed attempt to unseat Winterkorn. His wife and former nanny, Ursula Piech, left the board at the same time.

The Guardian notes that VW has a long history of boardroom battles.

The company got its start when Adolf Hitler directed Ferdinand Porsche to build a “people’s car.”

Today, its supervisory board has 20 members, including two representatives from Qatari, two from Lower Saxony, five members of the Porsche and Piëch families, and 10 union officials.

“The governance of Volkswagen was a breeding ground for scandal,” Charles M. Elson, professor of finance and director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, told the Times. “It was an accident waiting to happen.”

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