Stymiest Looks to Be a “Lock” for RIM Chair
Research In Motion’s 2011 was about as ugly as they come. And with few indications that 2012 will be much better, the company is preparing to make some significant management changes.
Sources close to the company say that co-founders Mike Lazaridis and Jim Balsillie will soon relinquish their titles as co-chairmen of the board, officially ceding that position to board member and Royal Bank of Canada exec Barbara Stymiest.
“Stymiest is a lock for chairwoman,” one source told AllThingsD. “The only thing that’s unclear right now is the timeline for her appointment.”
A second source confirmed the likelihood of Stymiest’s appointment, but cautioned that a final decision hadn’t yet been made.
Earlier this week the Financial Post reported that RIM’s board was leaning toward tapping Stymiest as chairwoman. So evidently things are moving apace up in Waterloo, and it’s only a matter of time until RIM begins the executive overhaul it hopes will keep it relevant.
But at this point, is removing the co-CEOs from their shared board chair duties enough?
RIM’s share price ended 2011 near a seven-year low; the precipitous tumble that took it there trimmed $27 billion from its market cap. That’s $7 billion more than Nokia is worth right now.
Jefferies analyst Peter Misek says Stymiest’s appointment could help, but not for a while: “We would view such an announcement positively as we believe she will initiate a formal strategic review, possibly trim costs in the hardware business, and possibly announce additional partnerships; however, we continue to see an outright sale in the near-term as unlikely and see near-term results as challenged.”
But RIM’s gruesome downward spiral was caused by a string of foolish missteps and disappointments that will not be easily reversed, particularly not with a simple board chair swap. While Stymiest’s background is impressive — executive positions at the Royal Bank of Canada and Toronto Stock Exchange parent TMX — it is largely financial. She seems to have little background in consumer electronics. Presumably, some experience in that area would be helpful.
More helpful still would be a chair who hasn’t been so steadfastly supportive of Lazaridis and Balsillie, who seem to be engineering RIM’s decline just as deftly as they once engineered its ascension to dominance in the smartphone market. Their inexplicable optimism in the face of near-catastrophic screwups; their early indifference to the iPhone and similar devices that would ultimately undermine their business; and their bizarre mutual egocentrism in the face of product delays, successive quarterly earnings slips and declining smartphone market share — getting past all of that will require some serious readjustment at the company. Is Stymiest the person to provide that? And if she is, why hasn’t she done so already?
Recall Lazaridis’s remarks during a June earnings call, remarks made while investors gutted the company’s stock in reaction to a truly crappy quarter:
“Jim and I have the perfect balance to make the hard decisions. This is fun. … We’re changing the world. We’re transforming the way people work. … We birthed a tablet in a year! … We transitioned to a new operating system!”
As I wrote at the time, “The only thing more tiring — and frustrating — than listening to the company’s repeated ‘just you wait, our new device is a quantum leap over anything that’s out there’ promises is hearing the two guys who make and then break them congratulate each another on what a fantastic job they’re doing navigating a transition they didn’t have the foresight to prepare for — or see.”
In the end, for RIM to reverse its downward trajectory, there must be more than a simple board change.
“There’s a bigger problem than the market share erosion and product delays,” said one analyst, who declined to speak on record. “It’s Mike and Jim.”
Reached for comment, RIM offered the following:
“As previously disclosed, RIM’s Board has established a Committee of independent directors with the mandate to study the Company’s governance structure and report their findings by January 31, 2012. The Committee is on track to meet this schedule and the Board will then publicly respond to the recommendations of the Committee within 30 days.”