Ericsson shareholders refuse to let board off the hook

Ericsson shareholders refuse to let board off the hook

For the second year running, Ericsson’s shareholders have voted against exonerating CEO Borje Ekholm – along with most of its board – from liability over their management of a corruption investigation relating to the vendor’s activities in Iraq.

This means that legal action can still be taken against Ekholm and nine members of the 11-strong board, with only Carolina Dybeck Happe – appointed in 2022 – and employee representative Annika Salomonsson absolved of responsibility. The vote was taken at Ericsson’s AGM by investors representing over 10% of the vendor’s equity.

The corruption probe covers Ericsson’s activities across 17 years and five markets, and the vendor’s shareholders argue that the board’s handling of the issue resulted in Ericsson having to pay a US$1.1 billion settlement to the US Securities and Exchange Commission in 2019.

Earlier this month, US authorities issued a US$207 million fine to Ericsson for failing to reveal information relevant to the investigation back in 2019. In addition, Reuters reported Swedish Shareholders Association representative Sverre Linton as saying that Ericsson’s board had not yet supplied information promised to stakeholders last year.

Given this situation, it is perhaps unsurprising that Ericsson’s shareholders have opted not to let the company’s CEO and board off the hook just yet.

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