Based on the initial findings of a Corporate Governance review mandate issued last July, RIM co-CEOs Mike Lazaridis and Jim Balsillie may be forced to step down as co-chairs of the Board.
As we told you in mid-December, there have been calls by RIM investors for a change of governance, with five-year board member Barbara Stymiest leading the pack of candidates for new chairwoman. She “should step up and take the lead in making dramatic governance change,” according to Vic Alboini, Jaguar CEO and RIM investor. What is being called into question is the need, or “business necessity,” for a CEO (or in this case, two CEOs) to be chairmen of the board. This practice is less common in Canada and the U.K., but quite common in the U.S., a reason RIM claims as justification for maintaining the current hierarchy.
While this does not endanger the CEOs’ main roles of running the day-to-day operations of the company, the call to remove Lazaridis and Balsillie as chairs of the Board is the first step in what many see as a fundamental shake-up of the corporate nature within RIM. The common trope is that the company cannot continue the way it has been going; 2011 was a disastrous year for the company, whose stock price tumbled 75% amidst poor product launches and failed earnings expectations.
The co-CEOs, who together own 12% of the company’s total shares, have insisted on sticking to their guns regarding the new BlackBerry 10 OS, which is expected to debut in new smartphones in the second half of this year. Until then we will see a marketing blitz for existing BlackBerry 7 devices with renewed vigor.
The Corporate Governance review is expected to be submitted by the end of January, and there is no word on whether it encompasses, as some investors implore, a splitting of the company into separate divisions. We are only in the first days of 2012 and already RIM is back in the news. Let’s hope this will be the year they turn it all around.
Source: Financial Post