The Board of Directors is ultimately responsible for the organization of the Company and the management of the Company’s operations. It develops guidelines and instructions for the day-to-day management of the Company, conducted by the President and CEO who ensures the Board of Directors receives regular reports regarding the Group’s business development – its results, financial position and liquidity – and events of importance to the Group.

According to the Articles of Association, Ericsson’s Board of Directors shall consist of a minimum of five directors and a maximum of 12 directors, with no more than six deputies. Directors are elected by the shareholders at the Annual General Meeting for the period from the date of the Annual General Meeting until the close of the following Annual General Meeting, but can serve any number of consecutive terms. In addition, under Swedish law, unions have the right to appoint three directors and their deputies to the Ericsson Board of Directors.

Ericsson abides by strict rules and regulations regarding conflicts of interest. Directors and the President and CEO cannot participate in any decision regarding agreements between themselves and the Company, or between the Company and any third party or legal entity that the individual has an interest in. Further, the Audit committee has implemented a procedure for the approval of related-party transactions in accordance with NASDAQ's corporate governance rules as well as a pre-approval process for non-audit services carried out by the external auditors, in order to ensure their independence.

Current members of the Board

Complementary to the provisions in the Swedish Companies Act and the Articles of Association of the Company, the Board of Directors has adopted a work procedure for its activities that outlines rules regarding the distribution of tasks between the Board and its Committees as well as between the Board, its Committees and the President and CEO. The work procedure is reviewed, evaluated and adopted by the Board as required, at least once a year.

The work of the Board follows a yearly cycle, starting with the statutory Board meeting held in connection with the Annual General Meeting. Members to each of the three Committees of the Board are appointed at the statutory meeting, and the Board resolves on matters such as authorization to sign for the Company. At the next ordinary meeting, the Board handles the first interim report for the year along with the press release related to the report. In June, a Board meeting generally takes place away from Company headquarters, giving Directors a chance to visit major Company operations. Towards the end of July, the Board meets to handle the interim report for the second quarter of the year. Strategy matters are frequently addressed at any appropriate Board meeting but a two-day Board meeting in August is entirely devoted to the overall strategy of the Group, bringing to a close the strategy planning process initiated during the previous year. The August meeting also addresses the overall risk management of the Group. A third quarter interim report Board meeting is held at the end of October. Towards the end of the year, the Board thoroughly evaluates its own work. This evaluation serves as a guide for the work of the Nomination Committee. The conclusions of the Board work evaluation are presented and discussed at the Board meeting in December, which also addresses budget and financial outlook. At the first meeting of the calendar year, generally in the end of January, the Board focuses on the financial result of the entire year and also handles the fourth quarter report. And at the Board meeting in February, which closes the yearly cycle of work, the Board signs the annual report.

As the Board is responsible for financial oversight, financials are presented and evaluated at each board meeting. Further, each Board meeting generally includes reports by the Chairman of each of the three Committees based on the minutes from the Committee meetings, which were distributed to all Directors prior to the Board meeting. Further, a Board meeting typically includes the President and CEO ’s report on general business and market developments, including the performance of the Company. The Board is regularly informed of recent developments of legal and regulatory matters, and addresses, whenever necessary, the adoption and implementation of various corporate governance rules. Material for each Board meeting is distributed by the Board of Directors’ Secretariat according to a pre-established time plan. The time plan is established with due regard for corporate governance requirements including prompt distribution of minutes of Board meetings.

Unless exceptional circumstances prevent them from doing so, all Directors participate in all Board meetings.

The Board meets with Ericsson’s external auditors at least once a year to receive and consider the auditors’ observations regarding the annual report and internal controls. The auditors also prepare reports to the management annually on the accounting and financial reporting practices of the Company and the Group. Moreover, the Audit Committee meets with the auditors to receive and consider the auditors’ observations on the interim reports. The Audit Committe reports its findings to the Board. The auditors have been instructed to reflect in their reports whether the Company and Group are organized such that the accounts, the management of funds and the financial position of the Company and Group in other respects are up to good standard and can be controlled in a prudent manner. The Board has reviewed and assessed the Company’s process for financial reporting, as described below in “Internal control over financial reporting for year 2007”. The Board’s own review of interim and annual reports in combination with the Company’s internal controls is deemed to give reasonable assurance regarding the quality of the financial reporting.

In connection with its proposal to the Annual General Meeting of Shareholders 2007, the Nomination Committee appointed by the Annual General Meeting of Shareholders 2006 made the assessment that, for the purposes of the Swedish Code of Corporate Governance, the following Directors are independent of the Company and its senior management, as well as of the Company’s major shareholders: Roxanne Austin, Sir Peter L. Bonfield, Ulf J. Johansson, Nancy McKinstry and Michael Treschow.

The work of the Board of Directors has become increasingly extensive calling for fourteen Board meetings in 2007. Attendance at Board and Committee meetings is reflected in the table “Directors’ Attendance and Board of Directors’ Fees.” Two meetings were held away from the Company headquarters, one in San José, California, to meet with the management of newly acquired companies and to understand in further depth the operations of these companies, and one Board meeting was held at the premises of Sony Ericsson in Lund, with a focus on Sony Ericsson’s strategies.

Apart from regular matters addressed in line with the yearly cycle outlined above, the Board addressed, inter alia, several strategic matters such as the acquisition of Entrisphere, Tandberg Television AS and LHS AG. The Board further addressed long- and short-term objectives and strategies with regard to a continued operator and vendor consolidation, increased data traffic in telephone networks, the effects of introducing IP technology with increased focus on content and multimedia and the changing competitive landscape among telephone operators, cable TV providers and other data-network operators. In terms of remuneration, the Board put forward a proposal for a Long-term variable compensation program 2007 to the Annual General Meeting of Shareholders 2007, and following this compensation program not gaining approval, the Board submitted a revised proposal for a Long-term variable compensation program 2007 that to an Extraordinary General Meeting of Shareholders. Moreover, the Board has during the year decided on a change in the financial reporting structure, with four reporting operating segments: Networks, Professional Services, Multimedia, and Phones.

The heads of the three Business Units have been present at at least one meeting to make in-depth presentations of their respective areas of responsibility and to present major acquisitions projects.

The Board is mindful of the complexity, the dynamics and rapid development within our industry and consequently monitoring and analyzing market trends and development is in focus. Despite this focus, the unexpected drop in sales, of in particular higher margin products, at the very end of the third quarter that resulted in the profit warning on October 16 came as a surprise. Following the profit warning, the management and the Board have thoroughly analyzed the situation and have initiated actions to address the complex market dynamics going forward.

The Board of Directors has established three Committees: the Audit, Finance and Remuneration Committees. The Board appoints each of theCommittee members amongst the Board  members. The work of the Committees is principally preparatory, that is they prepare matters for final resolution by the Board. However, the Board has authorized each Committee to determine certain issues in limited areas and may also provide extended authorization to a Committee to determine specific matters. The Board of Directors and each Committee have the right to engage external expertise, either in general or in respect to specific matters, if deemed appropriate.

Prior to each Board meeting, each Committee submits a report to the Board on the issues handled, resolved or referred to the Board since the previous ordinary Board meeting. The minutes of each Committee meeting are attached to the minutes of the Board meeting following each Committee meeting.

Remuneration Committee 

Finance Committee