Trouble brewing at RIM's board after tablet debacle
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The Co-chief executive of Research in Motion may get stripped off from the role as chairman of the board, a change that will help them meet a key demand from angry and disillusioned investors. According to The National Post newspaper, Barbara Stymiest, an independent member of RIM’s board is leading the race to replace the co-founders Mike Lazaridis and Jim Balsillie in the chairmanship.
Recently RIM’s shares jumped by more than seven percent on investor hopes that blackberry maker was listening to increasingly strident demands for change.
The company has slashed the prices of its PlayBook tablet in the US by up to $400. They offer all the three versions of the product with storages of 16GB, 32GB and 64GB at the same price of $299. They will continue to sell it in this offer price till the end of February or the current financial quarter.
RIM has taken a $485 million write off against the value of Playbooks in its warehouse in December, which is the value of 1.2 million of the devices that it had to zero. They will earn a profit if they sell them at any price. In the last nine months of sales they have shipped about 850,000 units.
The introduction of the handsets built on a new operating system, are now expected to arrive until later this year and these issues have intensified the focus on RIM’s unusual boardroom. Lazaridis and Balsillie are both co-CEO’s and co-chairman of RIM and are also second and third largest shareholders of the company.
According to Colin Gillis, a BGC Partners analyst, any talk about an independent chairman is going to boost the company. It will also increase the likelihood the value of this company will be unlocked. However, it breaks the stranglehold the current CEO’s and co-chairman have on the company he added.
According to Jaguar Financial Corporation, 12 of the company’s 20 largest stockholders and 8percent of its stakeholders has called for some months for boardroom change which includes splitting of the CEO and Chairman roles.
Earlier, there was also news that, Amazon.com and other suitors had also considered making a bid for RIM, however the board wanted to focus on turnaround instead.
They had also said that a committee of seven independent directors was on track to deliver recommendations by 31Jaunary. That committee also included Stymiest, who is one of Canada’s most successful businesswomen. She is trained as an accountant; Stymiest was a partner at Ernst & Young and then also was chief financial officer of Bank of Montreal's Nestbitt Burns investment bank before becoming head of the Toronto Stock Exchange in 1999.