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Corporate governance

Available in English Svenska

Strong corporate governance, with the Board’s strategic and independent oversight, enables Ericsson to execute effectively and responsibly on its strategy while promoting transparency and maintaining high ethical standards. Ericsson’s culture continues to be enhanced while implementing improved governance and embedding integrity throughout the organization.

Ericsson is committed to maintaining the highest standards of corporate governance and has established a corporate governance framework that:

  • Empowers the business, enabling strategic execution and operational excellence;
  • Promotes and facilitates effective oversight across the organization by the Board of Directors (Board), the President and CEO, the Executive Team and at all levels of the organization;
  • Ensures high-quality decision-making with clear accountabilities at all levels; and
  • Instills a robust approach to risk management to effectively identify, manage and mitigate risks and capture opportunities.

Ericsson prioritizes an integrity-led culture and compliance with law in everything it does, driving integrity into and across the organization. Ericsson’s governance framework guides its people while building on their strengths – fostering a culture of transparency, collaboration and open dialogue, sound and ethical business decisions, strong risk management, and cross-functional coordination. Ericsson has implemented practices and procedures that establish clear rules of governance, ranging from matters requiring approval of the Company’s shareholders and members of its Board, to conflicts of interest policies and director and management duties and obligations.

Governance structure

Ericsson’s organizational governance structure is comprised of the following:

Corporate governance structure graph

Under the Swedish Companies Act, Ericsson’s shareholders retain certain decision-making rights, including any matters that do not expressly fall within the exclusive competence of another corporate body. Shareholder decision-making rights include, among other things, the power to elect the Board of Directors, approval of any amendments to the articles of association and certain corporate restructurings.

The Board consists of members elected annually at the Annual General Meeting of shareholders (AGM), as well as employee representatives and their deputies (which the unions have the right to appoint under Swedish law). The Board is ultimately responsible for the organization of Ericsson and the management of Ericsson’s operations and is thus ultimately responsible for overseeing the Company’s strategy, organization and operations, and has established four Committees: (1) the Audit and Compliance Committee, (2) the Finance Committee, (3) the Remuneration Committee and (4) the Enterprise Business and Technology Committee.

The President and CEO is appointed by the Board and is responsible for the day-to-day management of the Group in accordance with the Swedish Companies Act, as well as in accordance with guidelines from the Board. The President and CEO updates the Board regularly on issues of importance to Ericsson, including matters of business development, results, financial position and liquidity. The President and CEO is supported by the Executive Team.

The members of the Executive Team lead the corporate center of the Group which, led by the President and CEO, is responsible for: (1) defining Group strategies and policies, driving the corporate strategy and establishing and maintaining the corporate culture; (2) Group-wide oversight and ensuring an effective framework for risk management and decision-making (including through the implementation of effective governance, a strong compliance program and related internal controls); (3) managing and executing on “central” corporate matters (ranging from managing Ericsson’s capital structure, financing and other corporate transactions, listing compliance and disclosure obligations); (4) Group financial management and reporting (including determining targets for operational units, allocating resources and monitoring market area and business area performance); and (5) leading on operational excellence, performance management and realizing global synergies through efficient organization of the Group.

The Executive Team is primarily responsible for steering the Group, ensuring global alignment on strategic priorities, optimizing competitiveness, and overseeing effective decision making and risk management. The executive leaders set the tone for the entire organization by promoting high standards of performance and critical thinking, exemplifying collaboration and maintaining the “birds’ eye” view for the entire organization.

Ericsson’s organizational structure consists of central Group functions, together with five business areas and five geographical market areas.

The Audit and Compliance Committee oversees matters relating to compliance risk and regularly receives reporting on compliance related matters from the Chief Legal Officer, the Chief Compliance Officer and the Head of Corporate and Government Investigations. The Head of Ericsson’s internal audit function reports directly to the Audit and Compliance Committee. The Chief Compliance Officer has an independent reporting line to the Audit and Compliance Committee on the areas of the Ethics and Compliance Program.

Corporate governance org chart