RIM board faces tough audience
Struggling Waterloo-based company, Research in Motion (RIM), is not hearing the message it wants to hear from its shareholders.
At their annual general meeting (AGM) for their shareholders on Tuesday at the Maureen Forrester Recital Hall at Wilfrid Laurier University, RIM addressed its shareholders about the concerns and challenges facing the smartphone operator in the coming months. The meeting also confirmed who would be on the board of directors under the new chair, Barbara Stymiest.
However, RIM’S board of directors faced most of the criticism from the shareholders — and it wasn’t pretty.
“As you can see with the election of the directors, you had anywhere from 15 per cent to 35 per cent of the votes that were withheld from voting which, in an absence of an alternative slate, that’s a vote against directors joining the board,” said prominent shareholder Vic Alboini of Jaguar Financial after the AGM.
During the question period, many shareholders clearly expressed their dissatisfaction with the board and many were demanding a response to why the company got to this point. One shareholder didn’t even ask a question, but just went up to the podium and stated that he was “extremely irritated” with the board.
“I hope that the board looks very seriously at that message from the shareholders,” Alboini continued. “It reinforces what we humbly want to see what happens with the shareholders.”
The board also faced some criticism for lacking diversity while the company remains heavily involved in Asia, South America and India.
“The original chairman and CEO are no longer holding chair positions, but in my mind, there should be more changes made in the board,” explained Albrecht Weller from Schwaben Capital Group. “I didn’t like the comments from the chairwoman about the board’s make-up, that the board had a number of skills but there was no specific answer to any of the questions.”
“There should be a greater international involvement in the board given that it’s a global company, or that they represent themselves as a global company,” Weller added, noting that he no longer uses a BlackBerry device. However, he did say that he believes that Thorsten Heins, RIM’s recently hired CEO, is competent and that he could “see where he’s coming from.”
In the past month, RIM has been scrambling to reinstate faith in investors and consumers despite numerous job cuts and poor showings with quarterly results. Since 2008, RIM has lost 95 per cent of its market value. While RIM is slated to release their new set of smartphones, the BlackBerry 10 (BB 10), in early 2013, many shareholders are skeptical that it will salvage the company. Heins, in his address to the questions about BlackBerry Messenger’s (BBM) future direction, noted that that RIM is making efforts to build a “BlackBerry-driven social networking platform.”
“Well I think they are betting all their money on one product, it’s a risky strategy but obviously they have much choice at this point unless they sell the company, but I don’t think there are any reasonable offers at this point,” Weller explained.
However, not all shareholders were pessimistic about the BB 10 and some see it pushing the company back to where it once was.
“I had faith going [into the AGM], it didn’t really change [afterward]. It is a phenomenal device that’s coming out; BB 10 is going to be great,” said shareholder Joe Manuel.
Alboini pointed out that RIM has viable alternatives to save some aspects of the company and money, some of which include private placement funding investments from competitors such as Microsoft or to break up the various aspects of the company and sell those particular parts.
“Those were the options that we didn’t talk about. Their whole focus continues to be on licensing the BB 10 platform, joint ventures and partnerships,” Alboini said. “We don’t want to put all our eggs in the BB 10 basket and we want to look at all these other strategic options.”
“You have to be open to other alternatives, it was a highly disappointing presentation, and it frankly looks like a sad company that needs a fix,” emphasized Alboini.