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Conducting business responsibly is a cornerstone of our company strategy and corporate culture. We are committed to winning business on merit, ability and fairness, following a clear code of business ethics, and acting vigorously to correct any irregularities we encounter. Our commitment goes beyond laws and regulations – we strive to be a responsible and relevant driver of positive change within the communities, organizations and societies we work.  As a part of this commitment, fighting and preventing corruption is one of our highest priorities.

Corruption is harmful for many reasons.  Primarily, it is a considerable obstacle to economic and social development around the world. It holds back sustainable development and often affects poorer communities the most. From a business perspective, corruption undermines fair competition, impedes innovation, raises costs and poses serious legal and reputational risks.

Fighting and preventing corruption is the right thing to do and requires discipline, persistence and clear strategies. Ericsson’s approach includes the following:

We work hard to build a global company culture that is deeply committed to ethics and compliance, with zero tolerance for bribery and corruption.

There is no place at Ericsson for anyone who does not act with professional and personal integrity in pursuit of our strategic objectives. We take disciplinary measures against employees – regardless of seniority – who do not live up to Ericsson’s Code of Business Ethics or our values.

To ensure that we employ leaders that share our values, Ericsson has introduced an ethics and compliance-focused leadership vetting process for all current and future Executive Team members and employees in exposed positions such as sourcing, financing and customer-facing roles.

Ericsson provides mandatory online compliance training for all employees, specialized face-to-face training for key personnel, and continuously communicates the importance of business ethics and compliance.

Examples of recent improvements:

2017: Ethics & Compliance vetting process for all senior leaders introduced

2017-2018: Enhanced face-to-face training of employees in exposed positions

We anticipate and understand where corruption risks may arise and take measures to address them, even if it means forsaking business opportunities.

We continuously assess and monitor the risks we are exposed to and adapt our measures accordingly. For example, Ericsson’s Corporate Audit unit is responsible for undertaking a Group Risk Assessment that regularly and systematically evaluates all parts of the organization to ensure alignment with our strategy and targets, including compliance.  The Compliance Office also performs corruption risk assessments of our global operations. Another example is our third-party management in which we continuously assess, monitor and address risks associated with our business partners.

Examples of recent improvements:

2017: Business Partner Review Boards established in all Market Areas to strengthen control of third parties

2018: Enhanced Corruption risk assessment conducted to better understand the threat corruption poses to our business around the globe 

We set high standards and implement processes and controls to proactively manage bribery and corruption risks.

All employees are expected to live up to our Code of Business Ethics. To help ensure that we act in accordance with this responsibility, we provide clear directives, tools, processes and controls. Ericsson conducts its business in a just and lawful manner and requires the same of all our contractors and vendors.  For this reason, we spend significant time and resources on due diligence of business partners, including suppliers, as well as assessment and monitoring of such engagements.

Examples of recent improvements:

2018: Further development of analytic tools to equip the Finance and Compliance functions to better identify and prevent high-risk transactions or engagements.

2017-2018: Strengthened due diligence and evaluation process of business partners.

2017: Code of business ethics strengthened with additional guidance on key compliance-related topics.

We remain vigilant and encourage our employees and other stakeholders to speak up and report compliance concerns, which we systematically investigate and address.

Any employee that observes or suspects violations of our Code of Business Ethics are encouraged to raise these concerns with his or her line manager or the manager’s manager, or report it through Ericsson’s whistleblower system, the Compliance Line.   All concerns are taken seriously, and appropriate actions will be taken on each report. Ericsson will not accept any discrimination of or retaliation against individuals who report compliance concerns in good faith. In 2017, 412 allegations of potential violations of our Code of Business Ethics were reported through our third-party operated Compliance Line. In 2017, 16 employees left the company due to fraud, corruption and regulatory breaches. 

Examples of recent improvements:

2017-2018: Ericsson’s Compliance and Investigation functions have been substantially reinforced with additional staff and increased training.

2018: Strengthened allegations management and investigation processes to help ensure more methodical and robust investigations and follow-up.

We remain attentive and responsive to improvements to our Ethics and Compliance program that Ericsson, our stakeholders, and authorities believe are necessary. 

We are continuously strengthening our Ethics and Compliance Program, including our approach to fighting and preventing corruption. This is a work that never stops, we must always stay on top of potential corruption challenges and risks. The companywide controls framework is continually monitored and updated after investigations and regular corruption risk assessments. The Group’s compliance program is reviewed at least annually by the Audit Committee of the Board of Directors.  Our processes, tools and controls for preventing, detecting and remediating corruption have been reinforced in recent years, following an external expert review of the Ethics and Compliance program in 2016.

Examples of recent improvements:

2016: The Ethics and Compliance Board (ECB) established – a management-level body chaired by the CEO that oversees the handling of potentially serious breaches of the Code of Business Ethics and other important compliance matters. 

2016: Independent compliance advisor hired by the Board to review and support the Company and the Board in further strengthening the ethics and compliance program.

2017: Chief Compliance Officer starts reporting directly to the Audit and Compliance Committee of the Board of Directors.

We engage with global organizations and programs to join forces in our fight against corruption.

Fighting and preventing corruption is impossible if done in isolation. Ericsson works through global organizations to raise awareness and build partnerships in our fight against corruption. We are committed to uphold UNs’ Global Compact Principles and to implement their Guiding Principles on Business and Human Rights throughout our business operations. The implementation of these policies and directives, risk management and achievement of objectives are all audited by an external assurance provider, under our Global Assessment Program.

Furthermore, since 2012, we have been a signatory to the World Economic Forum Partnering Against Corruption Initiative (PACI) - a cross-industry collaboration to address corruption, transparency and emerging-market risks - and its Principles for Countering Corruption, aimed at raising business standards and contributing to greater transparency and accountability. The PACI Principles commit signatory companies to a zero-tolerance policy towards bribery, and an effective program to counter bribery and ensure its implementation.