Investors Mull Whether RIM's (RIMM) Board is Truly 'Independent'
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It's no surprise that Research In Motion (Nasdaq: RIMM) has been hampered by, well, Research In Motion lately.
Looking like it's own worst enemy, investors and analysts have begun asking the age-old question: where in the heck is the Board in all this?
According to info from the WSJ Tuesday, many have begun a 'witch hunt' of sorts for the Board, aiming to hold it accountable for RIMs recent fall from grace. Voices have echoed calls for a management shake-up, a sale, or an overall huge shift in company strategy.
With RIM losing more than $30 billion of market cap so far in 2012, can you really blame them? It reminds us sort of that part in "Austin Powers" when a no-name worker sees Powers coming at him with a steamroller, and just keeps screaming...for 2 or 3 minutes while Powers approaches. The comedic scene -- which cuts from Powers to the worker and back again several times --illustrates a serious point: RIM had opportunity after opportunity to make a shift a while ago. Instead, it kept screaming and standing, almost knowing what lay ahead.
But firms like Canada's Jaguar Financial, and other investors, have strongly voiced opposition to RIMs structure. Jaguar itself has called for co-CEOs and co-Chairmen Jim Balsillie and Mike Lazaridis to "make a change or resign." RIMs Board Committee charged with evaluating RIMs performance and structure will issue a report sometime in January.
Should investors really expect a change? RIM has argued that the Board has 7 of its 9 directors as independent, and elected annually. It's Lead Director, former Canadian insurance exec John Richardson, has been on the Board since 2003 and lead since 2007. Many have said his presence is "ineffective" and Institutional Shareholder Services said Richardson "does not provide sufficient counterbalance" to RIMs management.
In fact, most of RIMs directors joined the Board in 2007, when times were still fat for its BlackBerry division. With shares in a downward spiral, and the stock falling from a range of $120 to $140 it traded in from 2007 through '08, one has to question whether or not a fresh set of faces on the Board wouldn't do RIM some good. More good would be done if Board requirements -- which have members report directly to Balsillie, while Lazaridis handles other CEO, Chairman "tasks" like presentations -- were dramatically shifted, providing more independence to a seemingly "less independent" structure.
Because the steamroller keeps chugging on ahead with absolutely no signs of slowing.
Shares of RIM are flat Tuesday morning.
Looking like it's own worst enemy, investors and analysts have begun asking the age-old question: where in the heck is the Board in all this?
According to info from the WSJ Tuesday, many have begun a 'witch hunt' of sorts for the Board, aiming to hold it accountable for RIMs recent fall from grace. Voices have echoed calls for a management shake-up, a sale, or an overall huge shift in company strategy.
With RIM losing more than $30 billion of market cap so far in 2012, can you really blame them? It reminds us sort of that part in "Austin Powers" when a no-name worker sees Powers coming at him with a steamroller, and just keeps screaming...for 2 or 3 minutes while Powers approaches. The comedic scene -- which cuts from Powers to the worker and back again several times --illustrates a serious point: RIM had opportunity after opportunity to make a shift a while ago. Instead, it kept screaming and standing, almost knowing what lay ahead.
But firms like Canada's Jaguar Financial, and other investors, have strongly voiced opposition to RIMs structure. Jaguar itself has called for co-CEOs and co-Chairmen Jim Balsillie and Mike Lazaridis to "make a change or resign." RIMs Board Committee charged with evaluating RIMs performance and structure will issue a report sometime in January.
Should investors really expect a change? RIM has argued that the Board has 7 of its 9 directors as independent, and elected annually. It's Lead Director, former Canadian insurance exec John Richardson, has been on the Board since 2003 and lead since 2007. Many have said his presence is "ineffective" and Institutional Shareholder Services said Richardson "does not provide sufficient counterbalance" to RIMs management.
In fact, most of RIMs directors joined the Board in 2007, when times were still fat for its BlackBerry division. With shares in a downward spiral, and the stock falling from a range of $120 to $140 it traded in from 2007 through '08, one has to question whether or not a fresh set of faces on the Board wouldn't do RIM some good. More good would be done if Board requirements -- which have members report directly to Balsillie, while Lazaridis handles other CEO, Chairman "tasks" like presentations -- were dramatically shifted, providing more independence to a seemingly "less independent" structure.
Because the steamroller keeps chugging on ahead with absolutely no signs of slowing.
Shares of RIM are flat Tuesday morning.
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