In his latest column for Bloomberg Businessweek online, Drucker Institute Executive Director Rick Wartzman examines the pressure by investors at BlackBerry maker Research in Motion to have the company split the chairman and chief executive roles so as to provide for greater board independence.
For Peter Drucker, Wartzman notes, “the ‘first item on the agenda’ would not be ‘the membership of the board.’ Instead, the focus would be on the particular responsibilities that every member of the board of directors has ‘and the work needed to discharge’ those responsibilities.”
[EXPAND More]”The first task of a functioning board,” Wartzman quotes Drucker as saying, “is to insist that company management design adequate yardsticks of performance for itself.”
Indeed, Wartzman concludes, “beyond the chairman-CEO issue lies the bigger question of whether RIM’s board as a whole is ready and willing to take the ultimate step.” As Drucker asserted: “It is the duty of the board not to permit mediocrity in high places. Today most boards will act only if there is gross malfunction in top management—and this is not enough.”
“With RIM having had trouble launching new products, its profit forecast dwindling and layoffs mounting,” Wartzman writes, “the board needs to demonstrate that it understands management’s performance is nothing to phone home about.” [/EXPAND]