Who says loose-lipped corporate place cards don't exist anymore?
In a series of remarks, Martin appeared to have broken the rules of boardroom decorum and brazenly thumbed his nose at the values of director oversight espoused at Joseph L. Rotman School of Management at the University of Toronto, where he's been the dean since 1998 earning $400,000 a year.
His assertion in a Toronto Life magazine article that fat-cat CEOs and their "bloated" pay packets are the bane of capitalism and his derisive, defensive musings — especially toward RIM's long-suffering shareholders — in The Globe and Mail, have made the Harvard-educated, multi-tasking, MBA-toting author and jock a punch line in places where he peddles his expensive wares — his own campus, Bay Street executive suites, and Wall Street.
It's debatable whether Martin has the track record to preach from the pulpit, let alone mock members of the congregation. Business people will point out that he's never operated a business, he's an academic with an impressive pedigree who cut his chops as a consultant, including a stint as top strategic advisor to General Motors during the government bailout years. Since 2007, he's warmed a seat on RIM's board of directors while the company's value has plunged almost 72%, and has become a celebrity strategist known for challenging conventional wisdom even when he's advocating fairly worn ideas about how short-term executive compensation rewards greed not restraint. "Do you call it unethical when your board says, 'Please improve expectations for future performance and don't do anything else, my boy? The current system provides a built-in excuse for bad behaviour," he declares in Toronto Life.
Still, whether Martin has the right business credentials is not really the issue. What is in question is his judgment, or lack of it.
The 55-year-old's group-think — he refers to "we" an awful lot — declarations about RIM's embattled board have attracted even more unwelcome scrutiny to his fellow directors. Worse, Martin strongly implies that despite billions of dollars spent and mountains of regulations imposed in the name of corporate governance during the past decade, old habits, like trophy boards, die hard.
Not only does he appear to pay lip service to his duties as a director and university dean, Martin used contemptuous language to illustrate how he doesn't walk the talk.
To wit, he all but admitted that the 11 members of RIM's board have been lackeys to co-founders Mike Lazaridis and Jim Balsillie.
Besides, anyone other than the two co-founders running RIM would be "children" or "morons" who would destroy the company, he sniped.
To be fair, some of RIM's critics have been over the top, so it's fair game for Martin to defend the company's strategy. Even so, while candour may be good; condescension is not.
Well, RIM's board didn't do that either. Lazaridis and Balsillie dictated the terms of their exit in January, and handpicked their successor, Thorsten Heins.
"I laugh at the vast majority of critics when they say 'Oh, you should have made this CEO transition, like, four years ago.' Yeah, right — like, to who?" he scoffed.
Unfortunately, RIM's investors don't get to share the laugh with Martin, who has the distinction of having been part of a group that presided over one of the greatest wealth diminutions in Canadian corporate history. In March, 2007 RIM's stock was trading in the $53 range on the TSX. On Friday, it closed at $15.02.
Martin and Barbara Stymiest, RIM's new chair, joined the board of the Waterloo, Ont.-based company in 2007 after the Ontario Securities Commission slapped the firm with allegations of improper stock-option backdating practises. The arrival of the duo was supposed to signal the end of RIM's governance deficiencies.
Instead, according to Martin, they cowered. The board didn't have the guts to take on the co-founders; didn't broach the all-important issue of CEO succession (one of the main duties of a board) and allowed co-CEOs Lazaridis and Balsillie to further entrench themselves by allowing the pair to become co-chairs in December, 2010 after Balsillie served his time away from the board as prescribed by his settlement with the OSC.
Over at Rotman, faculty and students are no doubt reeling from the dean's public broadside. Having built the business school into Canada's finest, and collecting millions from teaching the merits of effective board oversight to thousands of existing and would-be directors, Martin now finds himself the case study.