Activist investor Cevian Capital indicated it would vote against a key resolution related to the activities of Ericsson’s board and CEO at the vendor’s upcoming AGM, as the fallout from the handling of historical issues in Iraq continues.
In a statement issued ahead of Ericsson’s AGM tomorrow (29 March), Cevian said it planned to vote against granting a discharge of liability to the vendor’s board and CEO.
According to Swedish Corporate Governance Board guidelines the resolution means: “the company waives the right to bring an action for liability against the board members and managing director covered by the resolution for the relevant period.” The AGM vote covers Ericsson’s last financial year.
Highlighting what it deems a lack of transparency in handling the issues in Iraq, Cevian said it had “no choice but to hold the entire board accountable” as it apparently lacked the necessary information to make a sound assessment of “what went wrong, why, and who should be held accountable”.
The investor has previously called for sweeping changes to the corporate governance structure at the vendor.
Ericsson tomorrow will also vote on the re-election of the board and CEO.
Although planning to vote against the discharge resolution, Cevian noted it: “Remains convinced of the strength and potential of Ericsson and its operations. Overall, we have confidence that the Board and the CEO can realise that potential, and we will thus vote for their re-election.”
Cevian is reportedly not the only shareholder set to make a stand against the company’s handling of its current issues.
The Financial Times reported Norway’s sovereign wealth fund also plans to vote against discharging bosses from liability, while a pair of shareholder advisory companies are recommending a similar stance.Subscribe to our daily newsletter Back