Rim Case

RIM Case Report

Professor HT Hao

Commerce 4AF3 C02

Due Date: January 31, 2014

Student Number | Student Name |

1073647 | Hanson Chen |

1055441 | Guang Nan Li |

1147529 | Qiaoqiao Luo |

1160507 | Yi Xiang |

1153810 | Ching Man Yim |

Introduction

Research In Motion (RIM) has been a global leader in wireless innovation since 1999 by revolutionizing the mobile industry since its introduction of the BlackBerry. Recently, however, RIM has been going through a big crisis in its corporate governance structure, including the recent Blackberry service blackout, plunging share prices and takeover rumours. The company has been lagging due to several issues involving its internal management controls and accounting that have caused RIM to fall behind from its competition (e.g., Apple, Samsung, and HTC). Some of the issues that will be discussed include the possibility of conflict of interest arising from top management and board of directors, as well as a poorly managed stock option grant program for executives. This report will specify these issues around RIM’s corporate structure and recommendations that would help mitigate or eliminate these problems to bring the company back to a competitive playing field.

Corporate Governance Issues

RIM’s corporate governance structure is a major problem that has caused the company to decline over the years. The main concern about the governance structure is the issue of conflict of interest in the company’s top management level and board. Firstly, RIM did not clearly specify the role of each board member and their individual responsibilities which can cause the problem of conflicting roles. In 2006, Directors Dr. Douglas Wright and E. Kendall Cork were both members of the Audit, Compensation and Nomination Committees. This would potentially cause corruption between these three committees as there is a lack of independence among these directors. The lack of independence would cause future decisions difficult, as...