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January 3, 2012 8:28 pm
Under the plan, first reported by Canada’s Financial Post, Mike Lazaridis and Jim Balsillie, co-chief executives of RIM, would relinquish their additional titles of co-chairman to make way for the appointment of a new chairman. Barbara Stymiest, an independent director, is said to be the frontrunner for the position.
Ms Stymiest, a former chief operating officer at Royal Bank of Canada and former chief executive of the Toronto Stock Exchange, joined the RIM board in 2007.
RIM’s shares, which fell by over 80 per cent last year, gained over 7 per cent to $15.86 in early trading on Tuesday suggesting that shareholders would welcome such a move.
The changes are expected to be announced after a committee of independent directors appointed to review RIM’s corporate governance reports its recommendations at the end of the month.
“The committee is on track to meet this schedule and the Board will then publicly respond to the recommendations of the committee within 30 days,” RIM said on Tuesday.
The Waterloo, Ontario-based company agreed to appoint the committee to study its unusual corporate structure and report back to investors by the end of January, narrowly avoiding a vote of confidence at RIM’s last annual meeting.
It is unusual for a North American company to have co-chief executives who are also co-chairmen.
Corporate governance experts recommend splitting the roles of chairman and chief executive and the changes being considered by RIM’s committee would go some way towards addressing those concerns.
The move followed growing disenchantment among investors, frustrated by the company’s lacklustre financial performance and plunging share price.
RIM’s share price fell sharply last year after a series of disappointing results, compounded by the loss of share in key markets including the US. Consumers have been rejecting the company’s ageing product portfolio in favour of more powerful devices including Apple’s iPhone and smartphones powered by Google’s Android operating system.
Investor patience has been further taxed by the revelation last month that RIM’s next generation BlackBerry 10 smartphones will not be available until late this year. On Tuesday, the company extended its steep discounting of the PlayBook.
Some shareholders have called for Mr Lazarides and Mr Balsillie to step aside in favour of a new management team, but both men have made it clear that they plan to oversee what they hope will be a turnround in RIM’s fortunes.
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