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LONDON (Reuters) - The investment arm of British insurer Standard life (SL.L) said on Wednesday it would step up its engagement with management at Volkswagen VOWG_P.DE and Royal Dutch Shell RDSA.L over certain concerns it has regarding corporate governance.
In its annual governance and stewardship report, Standard Life Investments said it was worried about a lack of independence on Volkswagen's supervisory board and board committees following the appointment of former chief financial officer Hans Dieter Poetsch as chairman of the supervisory board, in the wake of the carmaker's emissions scandal.
The fund manager also said it had concerns at Shell about the auditing of its accounts following the appointment of EY, which also served as auditor of BG, the company taken over by Shell last month.
Standard Life Investments flagged the two companies as candidates for "escalation", indicating the firm would press the companies on their concerns.
Standard Life has a 1.4 percent stake in Shell. It said it no longer owns shares in Volkswagen but holds Volkswagen debt.
A spokesman for Volkswagen referred to the company's corporate governance report, which said transparent and responsible corporate governance was the "highest priority" for the firm and one of the key conditions for strengthening trust of customers and investors and increasing the company’s value.
Shell declined to comment.
In its report Standard Life Investments also said it had been influential in achieving governance changes at petroleum firm SOCO International (SIA.L), property manager Grainger (GRI.L) and oil producer EOG Resources (EOG.N).
It said budget airline Ryanair (RYA.L), advertising company WPP (WPP.L), oilfield services company Petrofac (PFC.L), utility services retailer Telecom Plus (TEP.L), miner Anglo American (AAL.L), tourism group Thomas Cook (TCG.L), heart device maker Boston Scientific (BSX.N) and advertising agency Dentsu (4324.T) were all on track to meet objectives concerning governance issues.
Reporting by Carolyn Cohn; Editing by Sinead Cruise and Susan Thomas