Amid the Wreckage, Where Is RIM's Board?

If you can't trust executive management to get the job done, then whom can you trust? Typically, the answer to that question is the board of directors. That should especially be the case if management has shown an extended disregard for much-needed strategic reform.

With Research In Motion (Nasdaq: RIMM) a wreckage, where have RIM's board members been amid the chaos? Why haven't they heeded the calls of shareholders and made any changes? Why are co-CEOs and co-Chairmen Mike Lazaridis and Jim Balsillie allowed to run freely like a pair of escaped misfits who have inherited keys to the vault without parental supervision? Why does RIM still have two CEOs and two chairmen?

While Balsillie and Lazaridis share both roles, they serve different purposes at the company. Lazaridis is more soft-spoken and focuses on technical product details and engineering, while Balsillie handles finances and marketing and leads board meetings.

At the end of June, RIM had agreed to form a "committee of independent directors" to evaluate the company's corporate-governance structure and said a report would be issued by the end of January with a recommendation. I'll offer up a freebie to RIM that doesn't take seven months to conclude: Have one CEO and one chairman, and preferably boot Balsillie and Lazaridis.

Sadly, RIM's board already knows this. Having separate CEO and chairman roles is Chapter 1 in Good Corporate Governance 101. Out of RIM's nine-member board, seven of them (all but Balsillie and Lazaridis) are independent. Out of the seven independent directors, two of them are corporate-governance "experts."

Roger Martin is the dean of the Rotman School of Management at the University of Toronto and has written extensively on the topic. The school also touts itself as an educational honcho on corporate governance. Barbara Stymiest has substantial experience at the Royal Bank of Canada (NYSE: RY) and the Toronto Stock Exchange, both of which are dedicated to good corporate governance. She even lists "corporate governance" as one of her areas of expertise.

RIM's board is guilty of complacency. It's not quite as bad as Hewlett-Packard's (NYSE: HPQ) board, which has actively made bad calls. Instead, RIM's board continues to look the other way as Lazaridis and Balsillie have set the controls for the heart of the sun. Meanwhile, Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) continue to eat RIM's lunch, and management has potentially spurned being bought out by Amazon.com (Nasdaq: AMZN) or Microsoft (Nasdaq: MSFT) and Nokia (NYSE: NOK).

Well, at least they have Angry Birds.

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