Ericsson AB, a Swedish maker of 5G networks, is switching its chairman amid ongoing work to improve the company’s culture following a series of scandals.
(Bloomberg) — Ericsson AB, a Swedish maker of 5G networks, is switching its chairman amid ongoing work to improve the company’s culture following a series of scandals.
Jan Carlson is being proposed as the new chairman, taking over from Ronnie Leten, who decided not to stand for re-election at the next shareholder meeting, Ericsson said in a statement on Wednesday. Leten has led the board since 2018 and will continue to serve as chairman for the remainder of his term.
The Swedish telecom-equipment giant has been managing various investigations tied to alleged violations of the US Foreign Corrupt Practices Act and will remain under the oversight of an independent compliance monitor for another year, until June 2024, following an agreement with the US Department of Justice and the Securities and Exchange Commission.
Ericsson’s also being probed over payments in Iraq that may have ultimately gone to the ISIS terror organization. That scandal, which erupted in February 2022, prompted a management shake-up at the Swedish company and in March shareholders voted against shielding Chief Executive Officer Borje Ekholm from liability. The DOJ then said that Ericsson had failed to make adequate disclosures about its operations in Iraq before entering a deferred prosecution agreement in 2019.
“We believe that Ericsson has a strong board of directors to continue to drive the strategic agenda and further strengthen the culture of the company,” said Johan Forssell, who heads the nomination committee.
Carlson, who was born in 1960, has served on Ericsson’s board since 2017. He was the chairman and chief executive officer of airbag maker Autoliv Inc. in 2018, when the company spun off its autonomous driving unit under the name Veoneer Inc. Carlson then joined Veoneer, leading it through a buyout completed last year.
Ericsson must also double down on integrating cloud-based communications provider Vonage Holdings Corp., acquired in a $6.2 billion deal — its biggest ever — and which was completed last year. The company is also accelerating a plan to cut costs, seeking to eliminate 9 billion kronor ($860 million) by the end of 2023, after projecting that demand for its main telecommunications product market will remain flat.
–With assistance from Veronica Ek and Thomas Hall.
(Updates with quote, background from fourth paragraph)
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