Ericsson board rebuked by shareholders over corruption scandal

For the second year in a row, enough Ericsson shareholders voted against a proposal that would have cleared board members of liability for actions related to alleged corruption charges, meaning investors can potentially sue them.

Shareholders representing at least one tenth of all of the shares in the company voted against discharge from liability for most of the board and the president for the financial year 2022. Only board members Carolina Dybeck Happe and Annika Salomonsson were discharged from liability.

The vote occurred at the vendor’s Annual General Meeting (AGM) on Wednesday. A similar vote occurred at last year’s meeting.

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 agreed to pay a $206 million penalty related to a long-running bribery scandal.

"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.

Still, CEO Börje Ekholm and others were re-elected as board members. As expected, Jan Carlson was elected as the new chair of the board.

“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.