RIM needs new spin on "Co-Chair" rationale

If you had the good fortune to watch BNN Television’s live coverage of the Research In Motion (RIM:TSX) AGM today, you would have learned courtesy of Kim Parlee and Andy Bell that the company has told investors and journos that our favs Jim and Mike need to retain their Board of Director “Co-Chair” titles because it helps command respect and sell product overseas.

Investors might have understood that 10 or 15 years ago, when few outside of Canada had heard of RIM, a certain title was needed to get a meeting at Telephonica or Orange. Today, however, is the incumbant wireless carrier in Cameroon or Vietnam going to push Jimmy (with his 70 million subscribers) to a subordinate because he’s merely the co-founder and Co-CEO?

“How dare they send me this errand boy!”

Not gonna happen.

Nokia has an independent Board Chair. Google has an Executive Chair in Eric Schmidt, their former CEO. Apple has no board Chair in fact, and two independent Directors share the “co-lead” duties. Motorola Mobility’s CEO is also Chair. I know that GE and JP Morgan haven’t split their CEO and Board Chair roles either, but that’s probably got everything to do with the standing those firms have within their sectors…for the same reason Canadian bank CEOs were also their own Board Chairs 15 years ago: it was meant to reflect their absolute control over the organization.

Within the universe of comps, at least, there’s not much support for the argument that RIM’s management team will be less effective courting governments and carriers in the absence of the Co-Chair title.

Time to roll out a new line from the spin doctors.

Or just admit there’s a reason why the management proxy circular is called the “management proxy circular” and not the “board proxy circular”. It’s so that management can recruit the board personalities and structure that management is most comfortable with.

I’m fine with either approach. But with $15 billion of shareholder value lost this year alone, it seems like an odd point of principle to headline the AGM.

MRM
(disclosure – I own RIM)