Governance Reform at Research in Motion (RIM) Ltd. Harvard Case Solution & Analysis

The case scenario contemplates the board arrangement of Research in Motion Limited (RIM) whereas the query of the Ontario Securities Commission and Securities Exchange Commission into the company's stock option surrendering practice overdue in 2006.   Institutional investors, more predominantly Northwest & Ethical Investments LP (NEI), were anxious about RIM's leadership and board construction in 2011 not because of non-compliance with regulations or accounting errors, but due to the drastic fall of the business 's share price (view TN-Display 1). In 2011 a challenging year for RIM (see TN-Exhibit 2 for a listing of events impacting RIM in 2011) as its introduction of its tablet computer PlayBook was not as triumphant as compared to Apple's iPad 2. There was also growing competition from other smartphones and Apple's iPhone 4S utilizing the Android platform. Moreover, a number of executives left the company in early fall and summer.

There was likewise a service disturbance, due to a malfunction of core switch in the infrastructure of RIM, which interrupted email messages and internet services for millions of BlackBerry users over five continents in October 2011. Separately from these grim strategic and operational troubles, institutional investors, more particularly NEI, challenged the authority of executives on the Board of RIM and asked for a schism of the Chair and Co-CEO jobs. To be able to avert a confrontation with shareholders at the Annual General Meeting (AGM) on July 12, 2011, RIM made an agreement with NEI to create "a committee of independent directors to analyze its board structure, the values of a lead manager versus a seat, and also the 'business necessity' for the business's co-CEOs to hold 'significant' board-grade titles". This sets the theme of the case, i.e., assess RIM's board structure in 2011 and recommend resolutions to be contained in the report due on January 31, 2012 to address the governance issues raised by NEI.

PUBLICATION DATE: January 01, 2014 PRODUCT #: NA0268-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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