RIM's board, reportedly preparing to oust co-CEOs Mike Lazaridis and Jim Balsillie, should look at its own mistakes.
Research In Motion's board of directors is preparing a shake up the BlackBerry-maker's governance structure as soon as the end of the month, according to the Financial Post, a Canadian newspaper. The general reaction to the news across the Web following the report was "about damn time." However, the board's actions may be too little too late.
The action comes as RIM faces increasing pressure from investors for change. RIM's stock dropped 75% during 2011. Investors have a right to be angry. The number of missteps taken by co-CEOs and co-chairmen of the board Lazaridis and Balsillie are too numerous to count.
The most recent gaffe is a significant delay in the company's planned next-generation smartphone platform, BB 10. Instead of launching new phones by the second quarter of 2012 as promised, it now looks as though the new platform won't be ready until the end of the year. RIM's co-CEOs say the delay is due to the availability of certain processors, though some insiders claim differently.
Worse, time and again Lazaridis and Balsillie have demonstrated that they are completely out of touch with the pace of innovation and change within the dynamic smartphone market. They are in complete denial about the problems facing RIM, and continue to point to a brighter future that never seems to appear.
RIM's CEOs have been under pressure since before the middle of 2011, when the PlayBook tablet launched. By June, investors were calling for change. Lazaridis and Balsillie were somehow able to quell a potential investor revolt by agreeing to a review of the company's governance structure. That review is set to offer its recommendations by the end of January, and could effect change within days or weeks once it is complete.
Anonymous sources cited by the Financial Post suggest that Lazaridis and Balsillie will be stripped of their co-chairman roles and the company will appoint a single chairperson (believed to be Barbara Stymiest, an independent director who joined RIM's board in 2007).
This is a start, but it doesn't go nearly far enough. Boards are typically in charge of hiring/firing CEOs. Lazaridis and Balsillie have managed RIM straight into the ground with warmed-over new smartphones, delayed launches, and botched products. I can't imagine any other CEOs keeping their job with such a track record.
If RIM's board doesn't also seek to replace the co-CEOs with a single, new leader, they aren't acting in the best interests of RIM's investors. That makes them just as culpable for RIM's performance as Lazaridis and Balsillie, in my book.
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