Hans Hirt, Director at Hermes EOS, which engages company boards on behalf of institutional investors like pension funds and insurers, said his firm had deep concerns about the United States Environmental Protection Agency findings which suggested the automaker "systematically cheated" emissions tests of some 500,000 vehicles with diesel engines.

"The fact that Volkswagen has now conceded that there may be some 11 million cars worldwide fitted with so-called 'defeat device' software ... suggests that something has gone terribly wrong at the company," Hirt said, adding that he had stepped up engagement with Volkswagen and other unnamed carmakers since news of the scandal broke.

"We welcome the resignation of Volkswagen's CEO, Martin Winterkorn, as a first step. The new CEO should create a culture at Volkswagen which ensures that the trust of customers and society will never again be jeopardized in the way it has in the past," he added.

Sources familiar with the plans told Reuters that Volkswagen would identify and fire executives responsible for rigging U.S. emissions tests on Friday, as it grapples with the biggest scandal in its 78-year history.

The supervisory board of Europe's biggest automaker is meeting on Friday to decide a successor to chief executive Martin Winterkorn, who resigned on Wednesday.

(Reporting By Sinead Cruise, editing by Matt Scuffham)