Research In Motion Ltd. RIM-T is starting to bend to its critics.
Caught in a months-long cycle of bad news – including profit warnings, product delays, calls for a management shakeup, and a share price that has been cut in half in 2011 – Canada’s most important technology company took steps Thursday to head off a potential clash with shareholders over the roles of co-chief executive officers Jim Balsillie and Mike Lazaridis.
The two men were named co-chairmen of RIM last year, upsetting some investors who believe an independent chairman is necessary. One group, Northwest & Ethical Investments LP, put forward a shareholder proposal to split the roles of CEO and chair, to be voted on at the company’s July 12 annual meeting.
The proposal had been gaining momentum – it was endorsed by Institutional Shareholder Services Inc. and Glass Lewis & Co., two shareholder advisory services. But on Thursday, RIM and Northwest announced a truce. RIM will strike a committee of independent directors to study the issue and recommend a governance structure for the company by Jan. 31, 2012, and Northwest will drop its proposal.
The agreement allows RIM to defuse a public debate on a contentious topic at a time when the company is going through a rough financial stretch and is trying to turn the spotlight back to its new product line. NEI did not respond to a request for comment late Thursday.
But on the same day it managed to put out one fire, RIM found itself faced with a public relations headache, as it was forced to respond to a scathing anonymous letter allegedly penned by a senior executive within the company.
Boy Genius Report, a technology website that follows RIM closely, posted a copy of the letter on Thursday that accused RIM's senior management of, among other things, not focusing enough on user experience, giving developers bad tools to work with, and running a work environment that feels like “Soviet-era government workplaces.”
The website claims the letter's author is “a high-level RIM employee,” but did not identify the person. The letter, addressed to Mr. Lazaridis and Mr. Balsillie, purports to express what “many” employees at the company think, but are afraid to say publicly.
“Almost every project is falling further and further behind schedule at a time when we absolutely must deliver great, solid products on time,” the anonymous author writes. “We urge you to make bold decisions about our organizational structure, about our culture and most importantly our products.
The letter quickly gained traction online, eventually forcing RIM to issue a brief response on the official BlackBerry blog.
“It is obviously difficult to address anonymous commentary and it is particularly difficult to believe that a ‘high level employee’ in good standing with the company would choose to anonymously publish a letter on the Web rather than engage their fellow executives in a constructive manner, but regardless of whether the letter is real, fake, exaggerated or written with ulterior motivations, it is fair to say that the senior management team at RIM is nonetheless fully aware of and aggressively addressing both the company’s challenges and its opportunities,” the company wrote.
RIM's response did not directly address most of the concerns raised in the anonymous letter. Instead, the company pointed to a period of “transition,” as it moves from its traditional operating system to an entirely new one that is expected to power what Mr. Balsillie describes as a new fleet of “super-phones” beginning in 2012.
RIM has seen its stock price fall by 52 per cent so far this year as it attempts to manage that transition. It has posted weaker-than-expected quarterly results recently and, during the most recent earnings call, also announced a round of layoffs.
This is the second time this year RIM has been forced to respond publicly respond to an open letter. In late February, app developer Jamie Murai posted a note on his blog detailing the frustrations he experienced while trying to develop a software application for the BlackBerry. In that case, RIM posted a lengthy response promising to make life easier for developers.
Thursday's anonymous letter touches on the topic, saying things haven't changed much since Mr. Murai's letter, and that the software and support RIM offers developers has not improved.
“The truth is, no one in RIM dares to tell management how bad our tools still are,” the letter states.
