Comment regarding article about breaches of Ericsson’s Code of Business Ethics
September 12, 2017
On September 12, Svenska Dagbladet published an article stating that some 80 employees left Ericsson in 2016, following breaches of the company’s Code of Business Ethics. Below are the questions received from Svenska Dagbladet, and the answers Ericsson provided:
Ericsson has been working with business ethics and compliance for a long period of time. In 2011, Ericsson formalized its compliance program, under the management of a Chief Compliance Officer, who reports to the Chief Legal Officer, and has since then strengthened the program incrementally. This applies to both the structure and the execution of the program, as well as follow-up and how it is implemented in the organization.
Do you have any new comments about the ongoing investigation conducted by the SEC and the DOJ?
Ericsson has since 2013 voluntarily cooperated with inquiries from the United States Securities and Exchange Commission and the United States Department of Justice regarding its compliance with the U.S. Foreign Corrupt Practices Act. The investigation is ongoing and we have nothing new to add.
How many employees had to leave Ericsson last year because they did not follow the code of conduct?
Ericsson has a Code of Business Ethics which all employees are required to follow. When we discover violations of the Code, we take action. This could be, for instance, warnings, loss of pay, or termination of contract. In connection to the Annual General Meeting in March 2017, Ericsson communicated that 86 employees had left the company in 2016 due to violations of the Code of Business Ethics.
How many left in 2014 and 2015 because they did not follow the code of conduct?
2016 was the first year in which we gathered consolidated information regarding compliance with the Code of Business Ethics.
How many have been forced to leave because of the above reasons so far this year, what kind of positions have they had and does it differ from previous years?
We compile this kind of statistics on a yearly basis and therefore still have no figures for 2017. We intend to compile it at the end of the year and publish this in the Sustainability & Corporate Responsibility report.
Can you be fired if you have violated the code of conduct earlier, but the violation is discovered several years later?
What violations of the code of conduct have been the most common in 2016 and so far this year?
In an appendix (GRI report) to our Sustainability & Corporate Responsibility report we disclose statistics about violations reported through our whistle blower program (Ericsson Compliance Line) and other channels. We also disclose the categories of the reported violations. In 2016, 145 violations were reported, distributed as follows:
• 29% related to fraud, corruption & regulatory breach
• 1% related to security issues
• 11% related to operations issues
• 49% related to human resources issues
• 10% related to conflicts of interest
Does Ericsson notify the police if an employee commits a suspected breach of local law? Breach of Swedish law, eg child pornography?
We assess the specific case at hand and Ericsson has filed police reports, and will file police reports, against employees who have violated laws in the countries they work. But we underline that it is an assessment of each individual case.
Violation of law is a broad term (from speeding to serious violent crimes) and we assess how serious the violation is and our obligations under law and the possibility to prosecute in the country in question.