Maybe big changes are coming to Research in Motion (NSDQ: RIMM) after all: the company has agreed to have its board of directors examine why it needs to have two co-CEOs and two chairmen of the board, after shareholder pressure has mounted this year to make Jim Balsillie and Mike Lazaridis more accountable for the dismal performance of the company in 2011.
It’s quite the about-face: just a few weeks ago Balsillie and Lazaridis spent about 15 minutes of a conference call scheduled to explain RIM’s dismal earnings results and forecast for the upcoming year insisting that they were a “team,” and that the job of running RIM was simply too big for one person. However, the company issued a statement late Thursday afternoon–hours after haughtily defending itself against criticism from an supposed anonymous employee–announcing that in exchange for an getting an investment firm to drop a shareholder proposal calling for a separation of the roles, it would authorize its board to create a committee examining the issues raised by the proposal.
That committee will “(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,” RIM said in a statement. A report will be issued in January with the committee’s conclusion.
It’s rare enough in the business world to have co-CEOs, but when those same two people are also co-chairmen of the board of directors, they wield an outsized amount of power over the company. In recent years it has become common practice to separate the role of CEO and chairman at big public companies, but RIM had dismissed suggestions to that effect all year as unnecessary.
What a difference a few weeks makes. Shareholder proposals are rarely successful, making one wonder why Balsillie and Lazaridis would agree to such an arrangement unless they are feeling the wrath of disgruntled shareholders. The committee will be made up of independent directors, meaning that the two RIM co-CEOs won’t participate.
RIM’s myriad problems wouldn’t be fixed overnight by changing its management structure, but it would be a clear signal that new thinking is needed to compete in a world that seems to have passed RIM by.