Board of Management

The Volkswagen AG Board of Management has sole responsibility for managing the Company in the Company’s best interests, in accordance with the Articles of Association and the rules of procedure for the Board of Management issued by the Supervisory Board.

Accordingly, responsibilities were divided among ten board-level management functions until December 31, 2021. In addition to the Chair of the Board of Management, a function which also includes the Volume brand group, the other Board functions are Purchasing, Technology, Finance, Human Resources and Truck & Bus, Integrity and Legal Affairs, Premium, Sport & Luxury, IT and China. As of December 31, 2021, the Chair of the Board of Management has also been responsible for China and the board member for Finance has also been responsible for IT. With effect from February 1, 2022, a board member is responsible for IT alone and the board-level function for China has once again been assigned to a specific member of the Board of Management as of August 1, 2022.

In December 2021, the Supervisory Board decided to increase the number of members of the Board of Management and reorganize its structure and functions in the process. A new board-level management function for Volkswagen Passenger Cars was created effective January 1, 2022. A new board-level management function was also created for Group Sales effective February 1, 2022.

Information on the composition of the Board of Management can be found in the “Members of the Board of Management” section.

Working procedures of the Board of Management

In accordance with Article 6 of the Articles of Association, Volkswagen AG’s Board of Management consists of at least three people, with the precise number determined by the Supervisory Board. As of December 31, 2021, there were eight members of the Board of Management.

The Board of Management generally meets weekly. Its rules of procedure require it to meet at least twice a month. Meetings of the Board of Management are convened by the Chair of the Board of Management. The Chair is required to convene a meeting if requested by any member of the Board of Management. The Chair of the Board of Management chairs the Board of Management meetings. In matters of general or fundamental importance, the decisions are taken by the entire Board of Management. The Board of Management takes decisions only after prior debate and/or using the written circulation procedure. Resolutions of the Board of Management are adopted by a majority vote. In the event of a tie, the Chair of the Board of Management casts the deciding vote.

Each Board of Management member manages their area of responsibility independently, without prejudice to the collective responsibility of the Board of Management. All Board of Management members must inform each other of events within their remit.

The Volkswagen Group companies are managed solely by their respective managements. The management of each individual company takes into account not only the interest of its own company but also the interests of the Group, the relevant brand group and the individual brands in accordance with the framework laid down by law.

Board of Management committees

Board of Management committees exist at Group level on the following areas: products, technologies, investments, digital transformation, integrity and compliance, risk management, human resources and management issues. Alongside the responsible members of the Board of Management, the relevant central departments and the relevant functions of the divisions are represented on the committees.

Cooperation with the Supervisory Board

The Supervisory Board advises and monitors the Board of Management with regard to the management of the Company. Through the requirement for the Supervisory Board to provide consent, it is directly involved in decisions of fundamental importance to the Company. In addition, the Supervisory Board of Volkswagen AG and the Board of Management regularly discuss factors affecting the strategic orientation of the Volkswagen Group. The two bodies jointly assess, at regular intervals, the progress made in implementing the corporate strategy. The Board of Management reports to the Supervisory Board regularly, promptly and comprehensively in both written and oral form on all issues of relevance for the Company particularly with regard to strategy, planning, the development of the business, the risk situation, risk management and compliance.

The Chair of the Board of Management is responsible for dealings with the Supervisory Board. The Chair is in regular contact with the Chair of the Supervisory Board and reports to him on all matters of particular significance without delay.

The Supervisory Board has set out the Board of Management’s obligations to provide information and reports in an information policy. The Board of Management must report conscientiously and faithfully to the Supervisory Board or its committees. With the exception of the immediate reports from the Chair of the Board of Management to the Chair of the Supervisory Board on matters of particular importance, the Board of Management is required to report to the Supervisory Board in writing as a rule.

For transactions of fundamental importance, the Supervisory Board must provide its consent. The documents required for decision-making purposes must be provided to the Supervisory Board members in good time in advance of the meeting.

Diversity concept and succession planning for the Board of Management

The Supervisory Board has laid down the following diversity concept for the composition of the Board of Management (section 289f(2) no. 6 HGB):

The Supervisory Board must also take diversity into account when considering who would be the best persons to appoint to the Board of Management as a body. The Supervisory Board understands diversity, as an assessment criterion, to mean in particular different yet complementary specialist profiles and professional and general experience, also in the international domain, with both genders being appropriately represented. The Supervisory Board will also take the following aspects into account in this regard, in particular:

• Members of the Board of Management should have many years of management experience.
• Members of the Board of Management should, if possible, have experience based on different training and professional backgrounds.
• The Board of Management as a whole should have technical expertise, especially knowledge of and experience in the manufacture and sale of vehicles and engines of any kind as well as other technical products, and experience in the international domain.
• The Board of Management as a whole should have many years of experience in research and development, production, sales, finance and human resources management, as well as law and compliance.
• Efforts are made to achieve a higher proportion of women than the statutory minimum.
• The Board of Management should also have a sufficient mix of ages.

The aim of the diversity concept is for the Board of Management members to embody a range of expertise and perspectives. This diversity promotes a good understanding of Volkswagen AG’s organizational and business affairs. Particularly, it enables the members of the Board of Management to be open to new ideas by avoiding groupthink. In this way, it contributes to the successful management of the Company. The diversity concept no longer contains any requirements for the Supervisory Board regarding a specific proportion of women on the Board of Management, as the Gesetz zur Ergänzung und Änderung der Regelungen für die gleichberechtigte Teilhabe von Frauen an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst (Führungspositionen-Gesetz II, FüPoG II – the Second Act on Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector) has eliminated the requirement to set a target for the proportion of women on the Board of Management. Volkswagen AG will instead be subject to a mandatory participation requirement in the future.

In deciding who should be appointed to a specific Board of Management position, the Supervisory Board takes into account the interests of the Company and all the circumstances of the specific case. In taking this decision and in long-term succession planning, the Supervisory Board orients itself on the diversity concept. The Supervisory Board is of the view that the diversity concept is reflected by the current composition of the Board of Management. The members of the Board of Management have many years of professional experience, particularly in an international context, and cover a broad spectrum of educational and professional backgrounds. The Board of Management collectively has excellent technical expertise and many years of collective experience in research and development, production, sales, finance and human resources management, as well as law and compliance. In addition, the Board of Management has a sufficient mix of ages that corresponds to the requirements set by the Supervisory Board; the gender balance also meets the requirements set by the Supervisory Board up to now and the future legal requirements (see “Disclosures required by the Führungspositionen-Gesetz”).

Long-term succession planning within the meaning of Recommendation B.2 of the Code is achieved through regular discussions between the Chair of the Board of Management and the Chair of the Supervisory Board as well as regular discussions in the Executive Committee. The contract terms for existing Board of Management members are discussed, along with potential extensions and potential successors. In particular, the discussions look at what knowledge, experience and professional and personal competencies should be represented on the Board of Management with regard to the corporate strategy and current challenges, and to what extent the current composition of the Board of Management already reflects this. Long-term succession planning is based on the corporate strategy and corporate culture and takes into account the diversity concept determined by the Supervisory Board.

As a rule, members of the Board of Management should be appointed for a term of office ending no later than their 65^th birthday. Board of Management members may be appointed to serve beyond their 65^th birthday until no later than their 68^th birthday, provided this is agreed by a two-thirds majority of the Supervisory Board.