ABB’s major shareholder Cevian does not trust the CEO Spiesshofer
As ABB nominated Lars Förberg, the co-founder and managing partner of Cevian Capital – the second largest shareholder of ABB, as the new member of the Board, Cevian expects to have a critical voice in the boardroom.
The fraud against ABB in South Korea, Transformers Magazine reported about yesterday, could cost the shareholders the equivalent of $100 million (900 million SEK). This incident clearly illustrates the problem existing with the complexity of the group and its bureaucracy, repots di.se.
It is considered that within the group there are too many circles of control and decision making, “delaying any process or decisions until it is too late and the business opportunity has been lost.”
Lars Förberg’s entrance in the Board would create a new dynamic and mean that Jacob Wallenberg, Vice Chairman of the Board and Chairman of Investor AB, another ABB’s shareholder, would be supported in his work.
According to di.se, Lars Förberg would offer the Board insight into new information on markets and competitors, which is independent and aimed at increasing the value for shareholders.
The operating margin for CEO Spiesshofer would thus decrease, and the pressure to deliver on the strategy and the savings further increase.
Swedish media say that Cevian has no trust in Spiesshofer, and his support among other shareholders is diminishing – he needs a miracle to recover his credibility. Instead of solving a fundamental problem, which is considering possibilities of splitting the group, he is said to be repeating the same: increased savings and new shares repurchase programs.
Lars Förberg will thus have a tough challenge tackling the issues at ABB, taking a diplomatic approach and not fearing conflict, Swedish media say.