Standard Life is worried about how Royal Dutch Shell and Volkswagen are being run, promises to escalate its engagement with management as investor bullish on Shell’s dividend outlook
Fund manager Standard Life Investments has warned Volkswagen and Royal Dutch Shell that it is planning on stepping up its engagement with management over concerns about the companies corporate governance.
Writing in its annual governance and stewardship report the investment vehicle said the VW emissions cheating scandal has caused it to be worried about a lack of independence on the German car maker's supervisory board and board committees.
The concern was sparked by the appointment of former chief financial officer Hans Dieter Poetsch as chairman of the Supervisory Board.
Standard Life's concerns about Shell are due to the auditing of its accounts after the firm acquired rival BG Group and appointed the same auditor, EY.
Other investors lack Standard Life's concerns however.
Chris White, Premier Asset Management’s head of UK equities, has said a reversal in oil sentiment could push the Shell dividend to yield the best part of 20 per cent over the next two years, citing a recovery in the oil price as set to boost the price.
"Oil price weakness could continue for another couple of months," said White. "However, it is a supply problem rather than a demand one. Saudi Arabia and the Opec nations will eventually get their act together and reduce supply, and the price will probably start to recover in the second half of this year."
Standard Life has been active in forcing governance changes at a range of other companies.
Oil firm SOCO International, property manager Grainger and oil producer EOG Resources have all made changes following lobbying from Standard Life.