Bits Blog: Would a New Chairman Fix RIM?

Brent Lewin/Bloomberg News

Last year, Research in Motion, maker of the BlackBerry, avoided a showdown with a Canadian mutual fund operator at its annual meeting by agreeing to study the relationship between its management and its directors. Like other investors, Northwest and Ethical Investments was concerned that James L. Balsillie and Mike Lazaridis, RIM’s co-chief executives, also serve as co-chairmen.

The committee of directors conducting that review must report by the end of this month. On Tuesday, RIM’s battered shares rose about 6 percent after the Financial Post cited unnamed individuals who said the board would recommend splitting the top positions. But if the newspaper is correct, the change may not bring the kind of strong, independent oversight of Mr. Balsillie and Mr. Lazaridis that some investors are expecting.

The newspaper said that although no final decision had been made, the committee was leaning toward recommending one of its members, Barbara Stymiest, as chairwoman.

Ms. Stymiest, an accountant and former investment executive, is well regarded in Canadian business circles. The positions on her résumé include chief operating officer at the Royal Bank of Canada, the country’s largest financial institution, and chief executive at the parent company of the Toronto Stock Exchange.

But the problems that reduced RIM’s share price about 75 percent during 2011 had little to do with its bookkeeping or financial structure, even if the company’s rapid decline meant that its financial forecasts were repeatedly downgraded.

Rather, they were mainly related to the company’s inability to create a new generation of competitive products in a timely way. Because Ms. Stymiest has no background in technology or consumer products, some members of Canada’s relatively small financial community believe that she would not be an effective check on Mr. Balsillie and Mr. Lazaridis. Both men are known for their sharp minds and exceptionally strong wills. That enabled them to create a new technology and turn a tiny Canadian company into a global enterprise.

But many analysts say that, more recently, their strong personalities and tight control over RIM has caused them not to seriously consider advice about areas outside their core abilities or acknowledge that their plans may have had flaws.

According to one Canadian analyst who said he knows and respects Ms. Stymiest but declined to speak on the record because he has to work with influential members of Toronto’s financial community: “The big problem is that Mike and Jim don’t want bosses.”

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