RIM Caves to Investor Pressure, Will Consider Division of CEO/Chairman Roles
RIM has agreed to establish a committee that will review its current executive structure and assess the need for a new chairman position independent of the current chief executive roles, due to recent pressure from concerned shareholders.
By Al Sacco
BlackBerry-maker Research In Motion (RIM) on Thursday issued a statement in reference to recent shareholder calls for the division of its CEO and Chairman roles, saying the company will form a special committee to investigate and consider such a change.
Northwest & Ethical Investments (NEI Investments), a RIM shareholder, had recently filed a proposal requesting that RIM’s Board of Directors divide the role of Chair and CEO, and that RIM have an independent Chair. The proposal was a direct result of a recent outside assessment of RIM’s executive structure by investment advisors Glass Lewis & Co., which found that RIM’s current leadership structure provides “inadequate independent checks” at a “turbulent” time, according to Bloomberg.com.
RIM said in its announcement that it and NEI Investments have agreed to withdraw the NEI proposal from consideration at RIM’s at upcoming annual general meeting and form a new committee to examine RIM’s executive structure.
From RIM’s recent statement:
“…RIM’s Board will establish a Committee of independent directors whose mandate will generally be to (i) study the appropriate balance between an independent lead director or chair with full and exclusive authority customarily held by such an office holder, (ii) determine the business necessity for RIM’s Co-CEOS to have significant Board level titles to assist their selling and other responsibilities with certain large customers in overseas markets, and (iii) propose and provide a rationale for a recommended governance structure for RIM, which will include clarifications of the Co-CEOs and Chair roles, as well as the Board’s mandate.”
In other words, RIM will form a committee that will consider exactly what kind of authority an independent chairman would hold at the company, examine whether or not both Lazaridis and Balsillie need to maintain high-level board of directors positions in order to adequately do their jobs, and then eventually provide a recommended future corporate governance structure that could include an independent chairman role, depending on the findings of the earlier investigations.
So while RIM has not yet said it will divide the roles of CEO/Chairman, it will consider such a change, which should at least appease the concerned shareholders for the time being.