(Corrects name of VW executive in second paragraph to HansDieter Poetsche)
LONDON, March 2 (Reuters) - The investment arm of Britishinsurer Standard life said on Wednesday it would escalateits engagement with management at Volkswagen andRoyal Dutch Shell, citing governance concerns.
In its annual governance and stewardship report, StandardLife Investments said it continued to be worried about a lack ofindependence on Volkswagen's supervisory board and boardcommittees following the appointment of former Chief FinancialOfficer Hans Dieter Poetsche as chairman of the supervisoryboard, in the wake of the firm's emissions scandal.
The fund manager also said it continued to have concernsabout audit quality at Shell following the appointment of EY -which also served as auditor of BG, the company recently takenover by the oil and gas heavyweight.
Standard Life Investments flagged the two companies ascandidates for "escalation", indicating that they would increaseengagement with company management to seek reassurance on theirconcerns. (Reporting by Carolyn Cohn, editing by Sinead Cruise)
