VW settles for 'old boy' Mueller to steer company out of trouble

Matthias Mueller, new CEO of Volkswagen. [Photo/China Daily]

The resumes of Matthias Mueller, 62, Volkswagen AG's new chief executive officer, and Martin Winterkorn, his predecessor, look remarkably similar. After early positions at Audi, they spent the next 20 years hopping between development roles in the carmaker's 600,000-employee empire.

Winterkorn became Audi chief before graduating to head the whole group, while Mueller made his penultimate stop at the Porsche unit.

The troubled parent company's 20-member supervisory board, 17 of whom are German or Austrian, on Friday named Mueller to replace Winterkorn, who stepped down last week over rigging emission-test results in the United States.

Mueller's appointment shows the insularity and clannishness of Germany's corporate governance structure, said Charles Elson, director of the University of Delaware's Weinberg Center for Corporate Governance.

"I'm not surprised they went with an insider. The company may say 'Who else can take charge?' and that's a fair point. But given what's happened at VW and the breadth of it they would be wiser to make a real break" and go outside for a leader.

Of the nine members of VW's all-male management board, all but one are German or Austrian.

Lack of a broad international mix on that board, especially an executive with US experience, may have compounded Volkswagen's problems in North America, according to Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany.

"They never really had anyone on the board in Germany who had any sort of clout when it came to the US."

Boards at most big German companies are predominantly male. Just 6 percent of management-board positions and 22 percent of supervisory-board seats are held by women at companies in the benchmark DAX Index. In addition to its lack of gender diversity, Germany's corporate-governance system is held back by its cliqueishness, said Henrike von Platen, president of the Business and Professional Women advocacy group in Berlin.

"If you meet someone on the board at one company, you happily take them with you to another one," von Platen said. "Trying to break into that and improve diversity is tough."