SUSTAINABLE MANAGEMENT

The Volkswagen Group has made a commitment to transparent and responsible management. The greatest challenge for putting this into practice at all levels and in all stages of the value chain is our complexity: with twelve brands and more than 570,000 employees we are one of the biggest companies in Europe. We follow the recommendations of the German Corporate Governance Code and have geared the remuneration of the Board of Management to the Company’s long-term results.

Remuneration of the Board of Management

The Group Board of Management has nine members. Every member is responsible for one or more functions, and some members also have responsibility for a region. The Group Board of Management is supported in its work by the boards and management teams of the brands and regions, and of the other Group companies and affiliated companies. The remuneration of the Group Board of Management consists of a fixed and a variable component. The variable component is made up of a bonus based on the performance of the business in the preceding two years, and (since 2010) a long-term incentive (LTI) which is based – subject to an introductory phase – on a consideration of the preceding four financial years. Thus both elements of the variable component are based on multi-year assessment criteria and take account of both favorable and unfavorable developments.

On the Supervisory Board of the Volkswagen Group there are three women, two of them on the shareholder side.

Composition of the Supervisory Board

In accordance with the German Co-determination Act the Supervisory Board, which appoints, oversees and advises the Board of Management, is made up of equal numbers of representatives of the shareholders and representatives of the employees. The Supervisory Board of the Volkswagen Board has a total of 20 members, three of whom are women. Clear ideas have been formulated about the ideal composition of the Supervisory Board:

  • At least three seats should be held by individuals of a particularly international character.
  • On the shareholder side, at least four members of the Supervisory Board should be individuals free from potential conflicts of interests, especially conflicts which might arise from an advisory or official function in regard to customers, suppliers, lenders, or other third parties.
  • Furthermore, at least four seats on the shareholder side should be occupied by individuals who are independent within the meaning of No. 5.4.2 of the German Corporate Governance Code.
  • At least three members of the Supervisory Board should be women, and at least two of these seats should be held by shareholders.
  • As a rule, no person aged 75 or over at the time of the election should be nominated for elections.

Coordination of Sustainability

To coordinate sustainability and corporate responsibility, Volkswagen has put in place a clear structure. The Group Board of Management (Sustainability Board) is also the highest-ranking sustainability body in the company. It is informed about corporate responsibility and sustainability issues by the Group CSR & Sustainability Steering Group at least twice a year and takes central decisions. The Group CSR & Sustainability Steering Group includes top managers from central Group business areas, the Group Works Council and representatives of the brands and regions. It meets four times a year, decides on the strategic sustainability goals and signs off the Sustainability Report.
The Group CSR & Sustainability Steering Group is in turn supported by the CSR Office, which since 2006 has been coordinating all sustainability-related activities within the Group and the brands. Its remit also covers the stakeholder dialogue conducted at Group level including relations with sustainability-oriented analysts and investors. There are also several dedicated project teams, each working at crossfunctional level on tasks such as sustainability reporting or sustainability in supplier relations. These coordination and working structures have, with a few exceptions, also been established at the various brands and are being continuously strengthened.

Global CSR Meeting

To promote dialogue across the Group, set up uniform structures and learn from one another, the CSR and sustainability coordinators of all brands and regions have been meeting annually in Wolfsburg since 2009. The Global CSR Meeting has thus become an important element in the Group-wide coordination structure. In 2013 the following topics were on the agenda of the two-day meeting: Sustainability Reporting, Information Management, Stakeholder Management and Corporate Citizenship. All four topics were discussed in moderated working groups. The meeting closed with the presentation of the results to the 70 participants:

  • Sustainability Reporting: This means not only the Group Sustainability Report, but also the links between the various reporting and communication formats within the Group and their joint future development. The visibility of the brands is to be improved, the preparation processes synchronized and steps taken to ensure that key stakeholders are addressed.
  • Information Management: Since all reporting is based on good data acquisition, the focus here was on designing a computerized information system. How can such a system meet the requirements of the Group and also of the brands and regions? What indicators are relevant, and at what level? What additional information of a qualitative nature is needed?
  • Stakeholder Management: Here the focus was on the question of the main stakeholders and the various levels. How can we develop and refine efficient dovetailing of stakeholder management between Group and brands and ensure that stakeholder expectations are addressed? This requires systematic identification and classification of stakeholders and a basic approach that can also be transferred to the brands and regions.
  • Corporate Citizenship: The Volkswagen Group takes this to mean voluntary initiatives and activities that create added value for communities and society. A wide variety of relevant approaches and projects, many of them arising from traditional processes, exist within the Group and its brands and regions, including as many as five corporate foundations such as the Volkswagen Community Trust set up by the Volkswagen brand in South Africa, or the Audi Stiftung für Umwelt (Environment Foundation). The aim here is to find a common systematic approach that also permits an impact assessment to be drawn up.
Adopted in 2013: the Group Environmental Strategy.

Coordination of Environmental Protection

In 2011 the Volkswagen Group appointed a Group Chief Officer for the Environment, Energy and New Business Areas, and took other important decisions for the ecological restructuring of the Group. At the end of 2013 the Group Board of Management approved the Environmental Strategy. The Group Environmental Conference, which as a rule brings the environmental officers of the brands and regions together every four years, has been held since as long ago as 1998. Through the Corporate Environment and Energy Steering Group, which also reports to the Sustainability Board, the coordination of these issues follows the structure described above for CSR & Sustainability.

The CSR & Sustainability Coordinators of the brands and regions met in Wolfsburg in June 2013.

The e-up! and the e-Golf . Delegates to the Global CSR Meeting were able to test drive two electric models.

Coordination of Employee Responsibility

The framework is defined by the Corporate Personnel Management (PM) department and implemented locally. In 2013 the PM strategy to support the Group goals for 2018 was adopted.

Coordination of Social Engagement

Social engagement falls largely within the responsibility of the brands, companies and sites. To ensure a certain standardization worldwide, the Group has defined central principles.