Brekke keeps his job at Telenor

Sigve Brekke has survived a reported attempt by the leader of Telenor’s board of directors to force his resignation as the company’s chief executive. Now speculation is swirling over whether she’ll survive months of top-level conflict and retain her post, after failing to win support from the rest of Telenor’s board.

Telenor's new CEO Sigve Brekke is at the center of controversy swirling around Telenor, also for embellishing his own educational and career record. PHOTO: Telenor

Telenor’s new CEO Sigve Brekke has already been at the center of controversy swirling around Telenor, for embellishing his own CV and struggling to handle the aftermath of a major corruption scandal in Uzbekistan. Now he has survived a power struggle with the leader of Telenor’s board. PHOTO: Telenor

The troubled Oslo-based telecoms firm issued a statement Tuesday night that the board had “confirmed its trust in President and CEO, Sigve Brekke.” The board “unanimously concluded,” after months of dealing with “several complex issues” and “differing viewpoints” on strategy, governance and compliance, that Brekke “is the right person to lead the implementaation of the new strategy.”

Telenor, which largely remained silent during a torrent of media coverage about conflicts between the company’s board leader and its CEO, referred to “issues from Sigve Brekke’s period” as head of its Asian operations. Those issues, which included irregularities in Thailand, Bangladesh and India, “have previously been handled” and settled according to the board’s statement.

Clean-up led to conflict
Both Wærsted and Brekke are relatively new in their positions at Telenor, which is emerging from major corruption scandal at its VimpelCom operations in Uzbekistan and has had a long stretch of management turbulence. Wærsted was appointed to head Telenor’s board late last year by government minister Monica Mæland, since the state owns 54 percent of the company that evolved from Norway’s public telephone utility.

Wærsted and the board launched several probes into Telenor operations including those in Thailand and Bangladesh that uncovered the irregularities in the Asian business. Wærsted reportedly felt they were serious enough to warrant Brekke’s resignation but he refused to quit voluntarily. She ultimately failed to win the board’s support for her view that he should quit.

Now she apparently voted along with the board, after a two-day meeting this week, that Brekke can continue as Telenor’s CEO. The company scheduled a press conference for Wednesday, where there may be more surprises or confirmation that Brekke and Wærsted had called a truce and would continue to work together. A Telenor spokesman told newspaper Dagens Næringsliv (DN) Tuesday night that “Gunn Wærsted would continue as board leader of Telenor.”

Minister called for calm
Government Minister Mæland had asked Telenor’s board to settle its conflicts and calm the company down. “I understand it’s a difficult situation at Telenor,” she told DN on Tuesday while Telenor’s board was still meeting. “I am confident the board is taking the situation seriously and doing what it can to bring calm to the company.”

Responding to questions from Members of Parliament about the tensions at Telenor, Mæland stated from the podium that it was the board’s responsibility to handle the situation. “I hope they’ll get the calm to be able to do their job.”

Commentators were already pointing out that it was likely to be a tense peace between Brekke and Wærsted. He must live with a long list of problems on his track record as head of Asia operations, while she must live with the lack of support for her views from other board members who supported Brekke despite the stains on his CV.

‘Professional’ and wounds can heal
One of the many Norwegian business professors who’ve been following the drama at Telenor, Karin Thorburn at NHH in Bergen, told DN late Tuesday night that she thinks Telenor’s board was forced to evaluate and publicize its confidence in Brekke.

“They got to a point where they had to tell the public whether they had or did not have confidence in him,” Thorburn told DN. She noted that the board is a group of people with various backgrounds and viewpoints who have discussed something until they can reach a conclusion the group can live with. “I think that’s professional,” she said.

Morten Huse, a professor at the Norwegian business school BI, said he thinks Brekke can continue as CEO and that Wærsted and the rest of the board can continue as well. “I don’t think the damage is especially great,” Huse told DN. “Telenor is a large international company. They operate all over the world in a branch that goes up and down. They’re not the only ones in this situation.”

newsinenglish.no/Nina Berglund