Hello and welcome, everybody, to today's briefing session for investors and financial analysts on responsible business. My name is Lena Häggblom, and I'm a Director of Investor Relations at Ericsson. With me today, I have Becky Rohr, Chief Compliance Officer and Head of Investigations, who will give an update on Ericsson's ethics and compliance program. After the presentation, there will be time for Q&A. You'll find the dial-in information on our website and in the invitation to today's briefing. Today's briefing is being recorded. With that, I'm happy to leave the word to Becky Rohr. Please go ahead with your presentation.
Thank you, Lena. Hello, everyone, and I'm pleased to be here to address all of you. As you can see from the slide, this has some of my background. I joined Ericsson in early 2022, and I started in the role of Head of Corporate and Government Investigations, leading the investigations team. Then earlier this year, on March 5, 2024, I became the Chief Compliance Officer as well as the Head of Investigations. Before I joined Ericsson, I was the Vice President of Anti-Corruption and Global Trade within the Ethics and Compliance Office at Hewlett Packard Enterprise. Before that, I was at the U.S. Department of Justice as a prosecutor and lawyer for many years after I graduated from law school.
I'm pleased to be here today, as I said, and I'm delighted to be leading the Compliance Office and the Corporate and Government Investigations team at Ericsson, and happy to have the chance today to talk with you about some of our recent accomplishments in compliance and where we're headed in the future. If we go to the next slide, please. On June 2, Ericsson reached a significant milestone when concluding the work and the term of the Independent Compliance Monitor that had been appointed by the U.S. Department of Justice in June of 2020. That was in connection with Ericsson's deferred prosecution agreement from 2019, which resolved historical violations of the U.S. law known as the Foreign Corrupt Practices Act.
Then, as you know, the company entered into a plea agreement with the Department of Justice in March of 2023, and that plea agreement followed the determination by the Justice Department that Ericsson had breached the DPA in non-criminal matters. That plea agreement also expired on June 2. Our press release on June 3 announced the conclusion of the monitorship and the plea agreement obligations, which we completed successfully. This milestone marks a major accomplishment for the company and is a testament to the hard work, dedication, and commitment to integrity throughout the company. I would also like to note that our ethics and compliance journey has no end. It is an ongoing effort.
To keep progressing, we must continue acting with integrity and having a strong ethical culture and making sure that our central compliance function works hand in hand with our business and that the business also takes responsibility and accountability for day-to-day compliance. I want to note that, as we have announced publicly, there are ongoing investigations by the Department of Justice and the U.S. Securities and Exchange Commission into historical conduct in connection with matters discussed in an Iraq investigation report. The company continues to cooperate with those ongoing investigations, and I'm not going to comment further on that. The next slide, please. This slide shows the timeline of some key events during the monitorship.
I'm not going to go through all the details here, but I'll generally note that the role of the Independent Compliance Monitor over the past four years has been to comprehensively review, assess, evaluate, and test all aspects of the company's global anti-corruption compliance program and internal controls. The monitor submitted four annual reports to the U.S. Department of Justice.
Each one of those evaluated the effectiveness of Ericsson's internal accounting controls, record-keeping, and financial reporting policies and procedures as they related to Ericsson's ongoing efforts to establish and maintain an effective anti-corruption compliance program and related internal controls. The monitor's fourth report, delivered to the Department of Justice in December of 2023, focused on testing the level to which Ericsson's ethics and compliance program and internal accounting controls were embedded in the business to ensure their effectiveness and sustainability.
Each of the monitor's reports included an assessment of Ericsson's board of directors and senior management's commitment to and effective implementation of a corporate ethics and compliance program. Over the four-year course of the monitorship, the monitor made numerous recommendations for enhancement of the company's compliance program and internal controls.
Then earlier this year, on March 28, 2024, pursuant to the deferred prosecution agreement and the plea agreement, the monitor certified to the Department of Justice that Ericsson had implemented all of the monitor's recommendations or agreed-upon alternatives and that the company's ethics and compliance program, including its policies and procedures, were reasonably designed and implemented to prevent and detect violations of the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption laws.
On March 29, Ericsson's Chief Legal Officer and me, as the Chief Compliance Officer, certified to the Department of Justice that Ericsson had adopted and implemented all of the monitor's recommendations or agreed-upon alternatives contained in all reports issued by the monitor since the appointment on June 2, 2020. The monitor issued its fifth and final report on April 26, 2024. On May 3, pursuant to the plea agreement, Ericsson's Chief Executive Officer and me, the Chief Compliance Officer, certified to the Department of Justice that Ericsson had implemented a compliance program that meets the requirements set forth in the plea agreement and that such compliance program is reasonably designed to detect and prevent violations of the U.S. FCPA and other anti-corruption laws.
Also, on that day, on May 3, pursuant to the plea agreement, Ericsson's CEO and Chief Financial Officer certified to the Department of Justice that Ericsson had met its disclosure obligations pursuant to paragraph 13 of the plea agreement, which relates to FCPA matters. Then, as we talked about on June 2, the monitorship and the plea agreement ended by their terms. Again, this was a successful outcome and conclusion of the monitorship and plea agreement that the company is very proud of, and I'm happy to be talking about this with you today. Next slide, please. Reaching this milestone required sustained effort, planning, and overcoming numerous challenges.
I'd like to take a moment to look back at some of the key goals and the efforts that led us here and what will support us to continue our ethics and compliance journey beyond the monitorship and with the aim to become the best in class when it comes to compliance. At the start of our journey, which is on the left side of the slide, we focused on establishing ethics and compliance program fundamentals, the Compliance Office as a central function, and raising the awareness about compliance in the overall organization, including the promotion of our speak-up culture to encourage people to report compliance concerns for assessment and potential investigation. We have now established a resourced and empowered ethics and compliance organization, and I am proud to be leading the central function in the Compliance Office.
Today, our overall compliance program is made up of hundreds of highly qualified employees across not only the Compliance Office, but also in the assurance functions acting in the second and third line of defense, complemented by empowered gatekeepers and business owners in the first line. The foundation for our continued success of the ethics and compliance program is promoting a compliance program that is embedded in the business. We continue our efforts towards cultural transformation and to further strengthen business ownership so that the business is responsible and owns decisions, with the Compliance Office acting as a trusted advisor and subject matter expert. And of course, culture is essential.
There has been a cultural and a mindset shift for the entire organization where today our senior leaders are fully aware of their responsibility to lead by example and where they work to promote a strong ethical and compliance culture throughout all levels of the company. These senior leaders provide strong, explicit, and visible support and commitment to our Code of Business Ethics and to our compliance policies to prevent violations of laws and more than just preventing violations of laws and regulations, but to act with ethics and integrity in everything that we do. I will name for you just a couple of ways that we reinforce these messages from senior leaders. We have annual mandatory training as well as a regular Speak Up newsletter that I send as the Chief Compliance Officer about relevant compliance topics that goes to all employees.
As part of our company-driven culture initiative, which is called Ericsson on the Move, ethics and compliance is a key part of that. In performance reviews, we have instituted a goal that we call the Behaving with Integrity goal, which is now mandatory, that requires employees and managers to have what we call an Integrity Conversation that focuses on reflections and lessons about ethics and compliance, the completion of mandatory trainings, the formal signing of our Code of Business Ethics, and the signing of conflict of interest certifications. We have seen significant progress in achieving an overall more empowered compliance organization and, even more importantly, in having line managers step up to take ownership for good decision-making and to take a risk-based approach to make line managers accountable and have them act as multipliers for the efforts of the Centralized Compliance Office.
Long term, the company is fully committed to sustainable compliance and controls that are fully embedded across the organization and which are tied to a strong ethical corporate culture. We will continue our digital transformation and have a focus on data-guided monitoring as well as simplification of tools and processes, and that is part of our future outlook for the compliance program and the organization. Next slide, please. Further reflecting on our ethics and compliance journey from the starting point to today, this slide outlines some underlying themes in conduct and behavior that resulted in our Deferred Prosecution Agreement and the need for a compliance monitor, as well as some findings from the earlier reports from the monitor. But let's look at some of the items on the right side where we are now. First, the company is moving towards increased simplification.
We have developed compliance policies, processes, and tools to make them more intuitive, efficient, and sustainable, and we continue to engage in this effort for increased simplification and to have our compliance materials be user-friendly for everyone in the company. The next, a strong tone and conduct at the top with clear messages and great examples set by top leaders. Our leaders are setting a true speak-up culture, encouraging people to raise compliance concerns and to speak about ethics and integrity, and these leaders facilitate open and transparent conversations and make everyone aware that the company does not tolerate retaliation for any compliance concern raised in good faith. The next one, we have enhanced clarity on roles and responsibilities and business leaders who proactively engage and support the implementation of the compliance strategy throughout the business.
Next, we have a clear emphasis on digitalization and tool development through enhancing process efficiency and effective monitoring. We are still working on fully implementing this, and I think it's an area where we can always improve to do more with digitalization and automation and develop user-friendly tools, but we have definitely made progress in this area, and we are now on the path to use data in a better way and make more data-driven decisions.
Next, the collaboration among assurance functions has increased significantly, and we are breaking down silos leading to more open and transparent communication and appropriate sharing of information. As we know from the company-wide survey results known as the Voice Survey, this continues to be an area where we can improve, but we have made good progress and have developed strong coordination, particularly among the Compliance Office and the related assurance functions.
We are fostering a culture of risk-aware decision-making. We are encouraging smart decisions, encouraging people to think rather than just follow a process and check the box without analyzing the risk and thinking through the possible consequences and the importance of what they're doing. These are all areas that are essential to keep the focus on for the future evolution of the ethics and compliance program and the long-term sustainability of that program. Next slide, please. This slide has information about the number of reported compliance concerns in 2023, and this information is all in Ericsson's annual report. We had 1,201 total compliance concerns raised in 2023, and out of the reported concerns, about 125 cases were referred for further investigation by the team that I lead, the Corporate and Government Investigations Team.
That means that over 1,000 cases were not referred for investigation, and those were because they were inquiries of a general nature. They were not deemed to be related to misconduct or breaches of the Code of Business Ethics, or they were deemed low risk and not warranting dedication of investigation resources.
Some of those reported concerns also could be handled by other functions rather than through investigation, such as being handled by the People team if it relates to a human resources or personnel matter or to our Sourcing or Sourcing Compliance function if it relates to particular third-party issues. And so those functions could deal with these matters according to their own processes. During the year, the Investigations Team finished 91 investigations that were concluded and found to be substantiated. And then at the end of the year in 2023, 78 investigations were still ongoing and under investigation.
So the way this data is reported, it does include some numbers from both 2023 and 2022, and more details are in the sustainability report that Ericsson issued. During the year, 201 corrective and disciplinary actions involving individuals who were found to have acted in breach of the company's Code of Business Ethics were taken. 112 of those actions resulted in terminations and 58 in written warnings. And the company is committed to identifying, preventing, investigating, and remediating misconduct, including taking personnel action where warranted.
Next slide, please. So for us to succeed with the ambition of being leaders with the highest ethical standards, it's vital that ethics and compliance is embedded in everything that we do as a company, and it has to be completely integrated into the business, as I've already talked about. This slide was shared by my predecessor, Jan Sprafke, in December 2023.
We have identified six strategic priorities, and I'll go through them quickly: fit for purpose, collaboration, the Compliance Office as a trusted advisor, everyone in the company taking accountability for making smart ethical decisions, simplification of processes, and increased digitalization, as I've already talked about in this meeting. These are the company's ethics and compliance priorities, and this overall strategy continues. These are the cornerstones of ensuring the sustainability of the ethics and compliance program this year and beyond. The company is committed to having a strong program. Even though the monitorship and the plea agreement obligations have ended, we understand the need to continue to have a strong ethics and compliance program, a strong culture, and commitment to integrity, and for it to be embedded in everything that we do in the business day-to-day.
These priorities are a high-level way of signifying how we're going to address the most critical ethics and compliance challenges and to accelerate our progress towards the objectives that we have in the Compliance Office and towards smart decision-making, data-driven decisions, and user-friendly compliance materials. These are the guiding principles for our execution of our compliance strategy. With that, I will thank you, and I will hand it over to Lena.
Thank you, Becky. We have now come to the Q&A session. Operator, do we have any questions from the audience?
Thank you. To ask a question during the session, you will need to press star one one on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. There are no further questions on the phone lines.
Okay. If there are no questions today, then this concludes today's conference call. So thank you, everyone, for participating.