Return to business as usual at Volkswagen?

On Tuesday, like every year, the city of Hanover in Germany plays host to the annual general meeting (AGM) of Europe's largest carmaker. The occasion presents an opportunity for Volkswagen (VW) to put on display the latest models emanating from its 12 brands for the company's shareholders.

Special signs

This year's meeting, however, is taking place under very special circumstances. What would have seemed unthinkable just a few weeks ago suddenly became reality - Ferdinand Piëch, who had been VW's CEO between 1993 and 2002 and later chairman of the supervisory board until recently - resigned from his post on April 25 and therefore will not be present at the meeting.

As a result, Volkswagen's AGM is in an unprecedented affair chaired by trade union leader Berthold Huber, former head of the powerful IG Metall union, which represents workers' interests on the board.

Quick succession

Piëch, for his part, had a totally different picture in mind. His plan was to oust CEO Winterkorn ahead of the shareholders' meeting. The story has been repeatedly told over the past three weeks - Piëch publicly 'distances himself' from Winterkorn, underestimates the support for the CEO among the company's top leadership, and later throws in the towel.

The developments finally led him and his wife Ursula Piëch to resign from their membership in the supervisory board. The board did not wait longer to name their successors. On April 30, 57-year-old designer Louise Kiesling and Julia Kuhn-Piëch, a 34-year-old real estate saleswoman from Salzburg, were appointed to the board - both are nieces of Ferdinand Piëch.

A family business

The composition of Volkswagen's supervisory board reflects the stakes held in the company by different actors. In the case of the carmaker, two families set the tone, the clans of Porsche and Piëch. Through the holding company Porsche SE, the two families collectively own over 53 percent of the stake in the group, and are represented by five members on the supervisory board.

Volkswagen is therefore a family-owned company, albeit a gigantic one, with the group's total annual revenue amounting to about 200 billion euros - a figure that is almost equivalent to the annual economic output of a country like Finland.

The company has over 600,000 employees working in 118 manufacturing plants across the world, producing about 10 million vehicles per year. It places VW next only to Toyota in terms of vehicle sales around the world.

The VW Law

The carmaker is unique in terms of its shareholding structure. The German state of Lower Saxony holds a 20 percent stake in the company. The state also has a blocking minority - meaning Lower Saxony's prime minister and economy minister can veto decisions taken by the supervisory board. The stipulations are part of the so-called VW Law, which was introduced in 1960 as the then state-owned VW - which was founded after World War II - was privatized.

The law gives the state government special rights such as the power to block decisions, despite owning just 20 percent of the company. The European Court of Justice upheld the law in 2013.

Another major shareholder is Qatar, which owns a 17-percent stake in the company through its investment vehicle Qatar Holding. It has two seats on the board, and one of them is expected to be filled by Akbar Al Baker, head of Qatar Airways. The remaining 10 percent of the ordinary shares are free float, ie publicly traded.

Many challenges

Half of the 20 seats on the supervisory board are filled with employee representatives such as Bernd Osterloh, the powerful works council chairman. This balancing of various interests on the board is not a special feature of VW, but rather has to do with Germany's practice of "Mitbestimmung", or co-determination.

Although the power struggle at the company was resolved in Winterkorn's favor this time round, it will not stop shareholders from asking tough questions, as he has a myriad of challenges facing him and the company.

In addition to bringing clarity to issues like staffing, he also has to tackle the problem of poor earnings at the core VW brand. There is also the need to improve the company's performance in the US market, where VW lags behind its competitors.

Above all, the firm's authoritarian management style and top-down approach do not fit with the times, and many experts are calling for a generational change in management.

Despite Volkswagen facing fundamental change, the focus of Tuesday's meeting is going to be about the past. For some shareholder representatives, however, it will no doubt not be enough.