After having already replaced top executives Jim Balsillie and Mike Lazaridis, Research In Motion says a review of its corporate governance has concluded that the roles co-CEO and co-chairmen formerly held by the pair should be split.
The findings of the review, which had been encouraged by an activist shareholder group about a year ago, were released late Monday just over a week after the BlackBerry smartphone maker had already replaced the two men.
Activist shareholder Vic Alboini, who pushed for corporate governance changes at RIM, said the report is “moot” given the fact the leadership changes happened before it was issued.
“It’s a little backwards,” Alboini said of the report. “They put it out after the announced the changes. It does take the weight off the report.”
But RIM was able to head off speculation and “snuff out” uncertainty by making the executive changes and then putting out the report, added Alboini, chief executive of Toronto-based Jaguar Financial Corp..
“It’s not earth-shattering in any of its conclusions. It’s very straightforward and simple.”
Almost two weeks ago, co-CEOs Balsillie and Lazaridis stepped down from their lead positions at the Waterloo, Ont.,-based company. Both remain on the board of directors but Lazaridis is vice-chairman.
RIM’s senior executive, Thorsten Heins, was appointed CEO on Jan. 22 but may still get advice from Lazaridis.
“The vice-chair will provide strategic counsel and advice to the chief executive officer as may be determined from time to time by the board and the vice-chair taking into consideration, among other things, the scope and nature of counsel/advice requested by the chief executive officer from time to time,” the report said.
Alboini said giving advice to the CEO is typically done by the board’s chair, calling it the “Lazaridis provision.”
“That’s in deference, if you will, to the former co-CEO who, admittedly, is very innovative,” Alboini said of Lazaridis.
Heins has said he doesn’t anticipate major changes for RIM as the company works to launch its new generation of BlackBerrys later this year to better compete with Apple’s iPhone and Google’s Android-powered smartphones.
Among the other recommendations, the report said the chair should be an independent member of the board, which reflects the change last week of bringing former Toronto Stock Exchange CEO Barbara Stymiest into the role of independent board chairwoman.
The report also noted “a major schism” between the practices of corporations in Canada and those in the United States.
“Canadian organizations and various Canadian shareholders strongly prefer, if not demand, that RIM appoint an independent chair,” which isn’t the common practice of U.S. companies, which generally don’t split the roles of chair and chief executive, the report said.
“(But) The committee came to the point of view that the strong opposition to non-independent chairs in Canada should outweigh the other considerations, including current practice in the United States and in RIM’s ecosystem,” the report said.
Alboini also noted the report has a provision that allows shareholders to contact the board with their concerns.
“That, for a long time, has been an issue for RIM in that they basically would turn their cellphone off. They weren’t available for consultation or input from the shareholders,” he said.
Shares in Research In Motion were down 46 cents, or 2.69 per cent, at $16.61 in early afternoon trading on the Toronto Stock Exchange.