Corporate Governance Report

(Part of the Management Report)
Transparent and Responsible Corporate Governance

We consider increasing our enterprise value on a sustainable basis to be our most important task. The trust of our customers and investors is crucial to achieve this. We gain this trust by managing the Company in a transparent and responsible manner. This takes the highest priority in our daily work. That’s why the Board of Management and the Supervisory Board comply with the recommendations of the current German Corporate Governance Code as issued on June 6, 2008 with only one exception.

RECOMMENDATIONS OF THE GERMAN CORPORATE GOVERNANCE CODE GUIDE OUR CORPORATE MANAGEMENT

The German Corporate Governance Code incorporates recommendations and suggestions that have been prepared, and are regularly updated, by the responsible Government Commission on the basis of significant statutory provisions as well as nationally and internationally recognized standards of corporate governance. Compliance with the recommendations and suggestions set out in the Code is designed to ensure good corporate governance and supervision. The recommendations of the German Corporate Governance Code therefore provide an important basis for the activities of the Board of Management and Supervisory Board of Volkswagen AG.

Sustainably increasing our enterprise value has the highest priority at Volkswagen. We achieve this goal by strengthening the trust of all stakeholders through our responsible and transparent corporate governance and by meeting national and international stakeholders’ steadily increasing demands for information.

COOPERATION BETWEEN THE BOARD OF MANAGEMENT AND the Supervisory Board

The Board of Management agreed the strategic orientation of the Company with the Supervisory Board and discussed progress on the implementation of the strategy with it at regular intervals. The Supervisory Board was provided by the Board of Management with regular, complete and prompt verbal and written reports on all key issues for the Volkswagen Group relating to planning, the development of business and the position of the Group, including the risk situation and risk management. In addition, the Audit Committee, as provided for under article 3.4 of the German Corporate Governance Code, dealt intensively with compliance issues.

Remuneration Report

Extensive details of the remuneration of all members of the Board of Management and the Supervisory Board may be found in the Remuneration Report.

Compliance

Article 4.1.3 of the German Corporate Governance Code defines the duties of the Board of Management in respect of compliance: the Board of Management must ensure compliance with all statutory provisions and the Company’s internal policies and ensures compliance with them by Group companies. The conformity of our actions with both legal and internal requirements and ethical principles forms an integral part of Volkswagen’s corporate culture. In order to ensure compliance with statutory requirements, the Company’s internal rules and voluntary obligations, we have appointed a Chief Compliance Officer. His task is to advise the Board of Management on all compliance issues and, additionally, to integrate appropriate preventive measures into the existing management system, and to manage and control these measures to ensure compliance. In 2008, we completed the establishment of a central Compliance Office and drew up a preventive concept for ensuring compliance within the Volkswagen Group by defining the organizational structure and workflows required. We also made further progress in implementing a Group-wide compliance organization.

RISK MANAGEMENT

We are paying closer attention to carefully managing potential risks to the Company. A systematic risk management system helps us to identify risks and optimize risk positions. The Volkswagen Group’s risk management system is continually adapted to reflect the changing environment. Extensive details of this system may be found in the Risk Report.

The Supervisory Board has established an Audit Committee, which deals in particular with accounting issues, compliance and risk management. As recommended by the German Corporate Governance Code, the Chairman of the Audit Committee, Mr. Holger P. Härter, Chief Financial Officer and Deputy President of Porsche Automobil Holding SE and of Dr. Ing. h.c. F. Porsche AG, has particular expertise and experience in applying accounting standards and internal control systems.

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