Ericsson shareholders voted against a proposal in its AGM to discharge the CEO and board from liability for activities in its last financial year, potentially leaving the way open for future legal action in the wake of an Iraq scandal.
Ahead of the event a pair of investors indicated they would vote against the motion, with shareholders representing more than 10 per cent of the company’s equity required to stop it going through. This threshold was reached at the meeting yesterday (29 March).
Under Swedish corporate law, failure to be discharged from liability does not necessarily lead to legal action, but leaves it a possibility.
Swedish TV channel STV’s coverage of the event cited fund management company Swedbank Robur, Cevian Capital, Nordea Fonder, Forsta AP-fonden and Folksam among those voting against the item during the online meeting.
Despite the disquiet of some over the handling of the crisis, CEO Borje Ekholm (pictured) and the board were re-elected to their positions.
STV noted prior to the results of the vote investors had quizzed Ekholm on the Iraq matter, which came to light earlier this year and questioned whether the decision to hold the meeting online was a way to avoid difficult questions.
The latter claim was reportedly rebuked.
In a statement following the AGM Ekholm said he understood the shareholders’ concerns regarding “important matters”.
“I want to state my commitment to continuing to lead Ericsson in the transformation of our company and its culture, executing on global 5G technology leadership, and strengthening our ethics and compliance performance to ensure lasting change.”
The company’s chair Ronnie Leten reiterated his backing for Ekholm and the rest of the board, adding the chief had “led the focus on ethics and compliance and executed the performance turnaround of Ericsson” during his stint in charge so far.