Telenor’s embattled chief executive and the leader of its board put on a united front Wednesday, posing together after months of conflict and claiming they personally get along well. They deeply regretted, though, that the company was put through another round of turbulence and uncertainty while its divided leadership tried to “clean up” after a string of earlier scandals.
“I feel for all the employees at Telenor,” board leader Gunn Wærsted said, “who once again experienced great unease and negative attention around the company.” Both she and Sigve Brekke, who avoided being sacked as CEO of the Oslo-based telecoms firm following disclosure of “irregularities” at the Asian operations he headed until last year, blamed all the turbulence on leaks of confidential information from the board that suddenly thrust the company back into the media glare last week.
Wærsted, who confirmed that she also had decided against resigning under pressure, was clearly shaken by the leaks. “We don’t know if they came from the board itself or people working with the board,” she said of the information that first was published in newspaper Dagens Næringsliv (DN) and then spread like wildfire through the Norwegian media. She said she “hadn’t used much time” to try to find out who leaked board discussions and documents that revealed an apparent power struggle between her and Brekke, and the fact that she told him in August that she thought he should resign. “But it’s clearly serious and we’ll get back to it,” she said.
In the meantime, Wærsted said the intense media coverage of the past few days led to another discussion within the board on Tuesday and “sharpened consciousness” around the importance of keeping board matters confidential. Brekke has been accused of leaking information himself, but he categorically denied that. “I have definitely not contributed to the leakage, nor have I hired any public relations advisers,” he said at a mid-day press conference organized by Telenor. “I don’t know where the leaks came from.”
Wærsted continued to be portrayed in local media on Wednesday as being the one who lost conflicts both with Brekke and the board. She disagreed. “We’ve actually had a good tone between us,” she said with a smile, adding later that “I don’t see that this has been a power struggle,” fueled by bad chemistry with Brekke: “This is not about Sigve or me. It’s about what’s best for the company.”
That turned out to be what she and Brekke claimed was a “unanimous” declaration from the board that Brekke was still the best person to keep leading Telenor. He said he was glad that a “united board” now stood behind him, while praising Wærsted “for landing some demanding issues” after a tough strategy-forming process in recent months. He also claimed that “there has never been a personal conflict between us.” They simply disagreed on various issues and, initially, what was best for the company.
‘Have a job ahead of us’
“For me, it’s important to stress that we’ve had open and constructive talks,” Brekke said. Both claimed that it’s “natural” for a board to evaluate its chief executive every year. They admitted it was not natural, though, for a CEO to be asked to resign. “The situation was made abnormal because of all the leaks,” Wærsted said. She added that she was not surprised Telenor attracted lots of media attention, because it’s one of Norway biggest and most international companies, with employees in 13 countries.
Asked whether she had considered resigning herself, Wærsted admitted that yes, the thought had crossed her mind, “but I spent a very short time thinking about it” before deciding to stay on. She’s aware, though, that she and other board members serve based on support from Telenor’s corporate assembly and its owners, which includes the Norwegian government with a 54 percent stake. Tuesday’s ceasefire among board members, Wærsted and Brekke will be subject to the result of nominations put forward by the corporate assembly next spring.
More trouble is likely to flare up before then. In addition to being a company that seems to attract storms, as Brekke said, another investigation is underway at operations in a country that was not identified and may result in charges of economic crime. Neither Brekke nor Wærsted would go into detail, but said Norway’s own economic crimes unit, Økokrim, was aware of situation. “We operate in many demanding markets,” Brekke said. “We have to be prepared that things can happen.”
Telenor shares were down nearly 2 percent by midday and Brekke acknowledged that “we have a job ahead of us, to rebuild confidence” in the company. Wærsted stressed that the “focus” in Telenor at present is on compliance and preventive measures to ward off more corruption cases in the future. “Telenor is a fantastic company,” she claimed, that’s been through “a demanding autumn. I look forward to continue leading it.”