Ericsson shareholders have for the second year in a row voted against a proposal that would have cleared board members of liability for alleged corruption charges. This means that investors can potentially sue board members. Shareholders who own at least one-tenth of all shares in the company voted against discharge from liability for most of the board and the president for the financial year 2022, with only board members Carolina Dybeck Happe and Annika Salomonsson being discharged from liability. This vote took place at Ericsson’s Annual General Meeting (AGM) on Wednesday and was similar to last year’s vote.
Ericsson’s shareholders are concerned about the company’s perceived mishandling of alleged corruption charges. Earlier this month, the U.S. Department of Justice (DoJ) announced that Ericsson had agreed to pay a $206 million penalty related to a long-running bribery scandal. The shareholders are concerned that the board has not been transparent enough about the situation and have been waiting for more information to be provided.
“Almost exactly a year ago, we were promised more information. Since then we have been waiting, but the questions are still unanswered,” Sverre Linton of the Swedish Shareholder’s Association said at the AGM, according to Reuters.
Despite the negative vote, CEO Börje Ekholm and others were re-elected as board members, and Jan Carlson was elected as the new chair of the board. Carlson expressed his commitment to overseeing the execution of Ericsson’s business strategy and culture transformation. He also acknowledged the concerns of the minority shareholders and promised that the board would take extensive action to enhance governance and compliance at Ericsson. Carlson also stated that the board would continue its close and ongoing dialogue with shareholders to build a stronger Ericsson.
In conclusion, the vote at the AGM demonstrates that Ericsson shareholders are not satisfied with the way the board has handled the alleged corruption charges, and they want greater transparency from the company. While the negative vote does not necessarily lead to legal action, it signals that shareholders are willing to hold board members accountable for their actions. Ericsson’s board has pledged to take extensive action to enhance governance and compliance and to continue its dialogue with shareholders to build a stronger company.
“Ericsson’s Board of Directors remains fully committed to actively overseeing the execution of the company’s business strategy and culture transformation. In addition, Börje Ekholm and his leadership team have our full support,” Carlson said in a statement after the general meeting.
“We fully acknowledge the concern of the minority, and while the vote does not necessarily predicate or lead to legal action, we take this concern extremely seriously. It is for this reason that the board has, and continues to take, extensive action to enhance governance and compliance at Ericsson. We will also continue our close and ongoing dialogue with our owners as we continue to build a stronger Ericsson,” Carlson added.