BlackBerry founders to get the boot?
BlackBerry co-CEOs were on Monday asked to loosen their hold on the company to reverse its declining fortunes. Investors are now putting pressure on the firm for changes in management, asking RIM to split the roles of the chief executive officer and chairman, to save itself.india Updated: Jun 28, 2011 11:58 IST
BlackBerry co-CEOs were on Monday asked to loosen their hold on the company to reverse its declining fortunes.
As investors put pressure on the top technology company for changes in management, the US based Institutional Shareholder Services (ISS) on Monday asked RIM to split the roles of the chief executive officer and chairman, to save itself.
BlackBerry inventor Mike Lazaridis and Jim Balsillie are co-CEOs, as well as co-chairmen of the board of directors. They also have the largest individual shares of 10 %. Thus, the two men control management as well as the board of directors.
But frustrated investors are now demanding delinking the two roles to give independence to the board from management. The ISS investor advisory on Monday added to RIM's pressure by advising the BlackBerry bosses to heed investors' demands.
"There seems to be no compelling rationale for the company to resist handing over all of the duties of chair along with the title, that signals strong board leadership, to an independent director who will preside over all board meetings and decisions," the ISS said in a report, excerpts of which were provided to the Canadian media.
The ISS report said, "Additionally, the company's recent corporate governance issues, coupled with financial underperformance, strengthens the idea that the separation of the co-chairs and co-CEOs roles is necessary and in the best interests of RIM's shareholders."
RIM, which virtually invented the smartphone and became a must have device for the corporate and political world, faces the biggest threat in its two decade old history after a huge loss of market share to Apple and Google Android smart phones, underperformance in the last two quarters and poor forecast amid delayed launch of new handsets.
RIM's annual general meeting is scheduled to take place in two weeks time. According to reports, investors are set to vote on changes in the management to make the board independent from management.
At about $27 now, RIM stock is at its lowest in six years, having slipped more than 50% this year alone. The company's market value has sunk to just $14 billion from $83 billion in June 2008 when its stock touched the $150 mark.