Ericsson appoints DOJ-mandated compliance monitor

In December 2019, Ericsson entered a $1 billion settlement with U.S. authorities to resolve a long-running investigation into violations of the Foreign Corrupt Practices Act (FCPA) that spanned 17 years and several geographies and involved high-level executives. As part of a deferred prosecution agreement with the Department of Justice, Ericsson agreed to appoint an independent compliance monitor for a period of three years. According to Ericsson’s admissions at the time, beginning in 2000 and continuing until 2016, the company conspired with others to violate the FCPA by engaging in a longstanding scheme to pay bribes, to falsify books and records, and to fail to implement reasonable internal accounting controls.

Pohlmann is the founding partner of Pohlmann & Company, a Frankfurt, Germany-based interdisciplinary law and consulting firm with an exclusive focus on compliance and corporate governance. A former chief compliance officer at Siemens from 2007 to 2010, Pohlmann himself is an internationally recognized leading practitioner and advisor in the areas of compliance and corporate governance, particularly as it relates to monitorships. From 2015 to 2019, he was also a member of the Special Investigation Committee of Petrobras (Brazil).

Pohlmann’s main responsibilities will include “reviewing Ericsson’s compliance with the terms of the settlement and evaluating the company’s progress in implementing and operating its enhanced compliance program and accompanying controls as well as providing recommendations for improvements,” Ericsson announced.

Ethics and compliance efforts

The company said it has in recent years “been taking significant steps to improve its ethics and compliance program.” Among the ethics and compliance enhancements Ericsson said it has made include:

• Adding more resources to its compliance and investigations functions;
• Reorganizing the allegation management process to ensure a centralized, professional intake of allegations, conduct of investigations, and remediation;
• Refining the risk assessment process to consist of a tiered approach and systematic risk mitigation methodology;
• Enhancing the due diligence process of third parties, including the overall monitoring of third-party engagements;
• Introducing more sophisticated analytic tools to better identify and prevent high-risk transactions and engagements;
• Enhancing the ethics and compliance vetting process for senior leaders;
• Refreshing compliance training modules for employees, including workshops and face-to-face training for employees in exposed roles; and
• Enhancing the internal anti-corruption and compliance-related awareness campaigns, including the company’s zero tolerance for corruption.

“We have already put in place many important changes to our ethics and compliance program, including adding further compliance and assurance competence, as well as strengthening our third-party management, leadership vetting, and internal controls,” Ericsson CEO Börje Ekholm said in a statement, commenting on the resolution of the investigations last year. “This work will not stop. Our zero-tolerance policy requires constant oversight and renewal, and we are confident that we are on the right path.”