The calls for Research in Motion to reconsider its current executive structure are getting louder.
Today major shareholder advisory group International Shareholder Services (ISS) added its voice to the mix, telling clients they should support a proposal to split the company's CEO and chairman roles. Mike Lazaridis and Jim Balsillie are co-CEOs and co-chairmen of the Waterloo, Ontario-based mobile computing company.
"The board's mandate is to represent the interests of shareholders through overseeing management and instilling accountability...Conflicts of interest may arise when one person holds both the Chair and CEO positions," ISS said today, according to Bloomberg.
Last week shareholder advisory group Glass Lewis and Co. said the same thing, recommending that RIM shareholders support a proposal introduced by Northwest and Ethical Investments. As major investors in RIM, Northwest has proposed breaking up the roles held jointly by Lazaridis and Balsillie. Shareholders will be able to vote on the idea at the company's annual meeting next month.
The two have shared the roles for years, but the movement to split them up has gained momentum in recent months thanks to RIM's increasingly disappointing performance. The company had a difficult launch of its PlayBook tablet this spring, and hasn't launched a new smartphone since August 2010. And earlier this month, the company warned investors that it was lowering its full-year outlook on profits.
Both Balsillie and Lazaridis were defensive regarding their title-sharing situation during the most recent earnings call with investors, and clearly anticipated questions on the topic. They were ready with speeches on how successful they've been together.
"Frankly, few companies would have been able to survive (the recent turmoil), but we have," Balsillie said. "I believe neither of us could have taken this company this far alone."
Their praising of each other for jobs well done has been regarded as ill-timed and insensitive. Lazaridis even referred to their jobs as "fun" and "world-impacting" several minutes after announcing layoffs at the company.
RIM's annual shareholder meeting will take place July 12.