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Ericsson appoints VC board member Börje Ekholm as CEO, market unimpressed

ericsson-hq-09

It turns out Ericsson didn’t have to look to far to replace Hans Vestberg after appointing a long-time board member and representative of one of its biggest shareholders.

Börje Ekholm is currently CEO of Patricia Industries, which is the part of venture capital company Investor AB that focuses on unlisted companies, and he was previously CEO of Investor AB for ten years. Investor AB is the largest single shareholder in Ericsson and has 21.5% of its voting rights so it’s perhaps it’s no surprise that Ekholm got voted in.

The rhetoric from the press release infers that having been on the board for the past ten years Ekholm is well up to speed on the Ericsson situation and is thus the steady hand it needs right now. On the other hand he has been a member of the board during a time when Ericsson’s NASDAQ listing has declined by 74%, so what does that say about his credentials? That same listing was down a percent or two on the news, implying the other shareholders (see below) are unimpressed by the appointment.

Ericsson shareholders list

“I am very pleased to announce the appointment of Börje Ekholm,” said Ericsson Chairman Leif Johansson – a veteran of Volvo and Electrolux. “He has a solid understanding of both the technology and business implications of the ongoing convergence of telecoms, IT and media. Having served on Ericsson’s Board of Directors for the past ten years, Börje Ekholm has full understanding of the challenges and the opportunities Ericsson currently faces.

“In the middle of a significant company transformation I am confident that Ericsson will benefit from Börje Ekholm’s world-class ability to forcefully execute on strategic direction and plans. Börje Ekholm brings years of experience from leading a publicly listed company with a strong track record of driving shareholder value.”

“I am very excited about this opportunity,” said Ekholm. “As the networks and applications become even more important in a 5G connected world, our customers, and the industry, look for continuous innovation. I look forward to joining the great team at Ericsson and work closely with existing and new customers around the world in shaping the future of our industry.”

On first impression this looks like a defensive move with mid-term share price as the priority. Ekholm is presumably very good at things like business efficiency, streamlining, etc which, as this Light Reading report indicates, should lead to yet more redundancies. Whether or not he has the vision to help redefine Ericsson in the 5G/IoT/cloud era is another matter. With the retrieval of shareholder value as an overwhelming priority Ekholm may focus on fattening up Ericsson for sale in a year or two. Just saying.


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