Research In Motion Ltd.’s Barbara Stymiest, a week into leading a board that had faced investor criticism for being ineffective, said she plans further changes to the director lineup to help revive the BlackBerry maker.
Stymiest, named chairwoman Jan. 22 after investors campaigned for an overhaul, said she’s reviewing the composition to fill gaps in directors’ knowledge. The addition this year of India-born investor Prem Watsa brings a key understanding of Asian markets to RIM’s leadership, she said in an interview.
Stymiest, who replaced founder Mike Lazaridis and Jim Balsillie, faces the challenge of convincing investors she can help push for changes needed for RIM to revive plunging sales and stock price. Stymiest declined to say whether any new directors would be proposed ahead of Waterloo, Ontario-based RIM’s July shareholder meeting.
“Driving change in an organization means a high-performing board and a high-quality management team,” Stymiest, 55, said yesterday in the wood-paneled dining room of her Toronto home. “You get those two right and you can drive change quickly and effectively.”
While her appointment was part of a larger management shakeup, Lazaridis and Balsillie remain on the board, prompting investors including Jaguar Financial Corp. to say the overhaul wasn’t enough.
Calls for Change
Stymiest and new Chief Executive Officer Thorsten Heins replaced co-CEOs Balsillie and Lazaridis, who also shared the roles of co-chairmen and ran RIM for more than 20 years. While the two men made the BlackBerry a must-have gadget for bankers and lawyers and made RIM Canada’s biggest company by market value, in recent years they oversaw design flaws and marketing missteps that has led to a 89 percent plunge in the share price from its 2008 high.
RIM rose 0.4 percent to $16.70 at the close in New York.
Amid RIM’s decline, shareholders including Northwest & Ethical Investments LP started calling for a management overhaul last year.
Northwest & Ethical urged RIM to split the roles of chairman and CEO, and later withdrew its demand after RIM promised to review its governance structure and report the findings. As part of its report, published this week, RIM’s review committee succumbed to the shareholder’s demand and said separating the two roles is the best course of action. It also recommended an independent leader for the board.
Jaguar, which describes itself as a merchant bank that invests in undervalued companies, also pushed its own change campaign and said it had the support at least 8 percent of RIM investors. The shareholder said RIM was hurt by “management dominance and a lack of board oversight.”
After Stymiest’s promotion, Jaguar CEO Vic Alboini said she isn’t “strong enough to cause dramatic change.”
“She’s been part of the problem,” he said. “I don’t think she’s going to be strong enough to make the changes necessary. We would say to her, ‘Prove us wrong.’”
Charlie Wolf, a Needham & Co. analyst, said Lazaridis and Balsillie, who together own about 10 percent of RIM, made “as little change as possible,” calling the new adjustments “cosmetic.”
“RIM’s previous leadership is still involved so their influence is there,” said Ittai Kidron, an analyst at Oppenheimer & Co. in New York.
The BlackBerry’s share of the global smartphone market fell to 11 percent in the third quarter of 2011 from 21 percent two years earlier, according to Gartner Inc., as Apple’s iPhone and devices running Google Inc.’s Android software won over users with faster browsers and larger screens.
Heins said in an interview last week that his immediate priority is to revive BlackBerry sales in the U.S., get a revamped version of RIM’s struggling PlayBook tablet onto the market next month and introduce its new operating system, BlackBerry 10, on time later this year.
“We can improve on product execution and Thorsten is well-positioned to do that,” Stymiest said. She said her job is to provide “flawless oversight” of the management team.
She says she’s working on RIM almost every other day and travels frequently to meetings at the company’s headquarters in Waterloo. Much of the rest of the time she works out of the third-floor office of her century-old Toronto home.
Stymiest said her experience with the Toronto Stock Exchange gives her insight into the technological challenges RIM faces. She ran the bourse for five years and oversaw the transformation of a company plagued by a history of computer problems and breakdowns into North America’s first publicly traded exchange in November 2002.
Royal Bank of Canada hired Stymiest as an executive during a 2004 management overhaul, putting her in charge of “strategic development,” with all corporate areas reporting to her, including finance and risk management.
Stymiest last year left her position as a senior executive at Royal Bank, the country’s largest, saying she wanted to devote more time to board work, charity and improving her golf handicap.
Next to the window in her home office, which has a view over downtown Toronto, are framed photos of Stymiest at golf events with past Masters champion Fred Couples and Montreal Canadiens hockey legend Guy Lafleur.
As part of the effort to bolster its competitive position, RIM is likely to acquire more patents, Stymiest said. That would help the company defend its intellectual portfolio and acquire new technologies, she said.
“You’ll continue to see RIM make strategic acquisitions of patents to give it the degrees of freedom to have the most competitive, compelling device going forward,” she said.
Last year, RIM spent $770 million as part of the $4.5 billion winning bid for bankrupt Nortel Networks Corp.’s patent portfolio. Intellectual property is an increasingly important part of smartphone makers’ strategies, with Google Inc. citing patents as one reason for its decision in August to spend $12.5 billion buying Motorola Mobility Holdings Inc.
Fairfax Financial Holdings Ltd., the insurer run by Watsa, last week doubled its stake in RIM to give it a share worth about $450 million in a vote of confidence in the BlackBerry maker after Watsa joined the board in the January shakeup. Lazaridis, RIM’s second-largest investor, said Jan. 22 he’s buying another $50 million worth of RIM stock.
Asked whether she will follow suit, Stymiest said she’s “contemplating it.”
“I’m well exposed to RIM and continue to accumulate.”