Rogers family matriarch Loretta Rogers is putting her support behind Rogers Communications Inc. chief executive Joe Natale after her son, company chair Edward Rogers, unsuccessfully attempted to unseat Mr. Natale and several other members of his senior leadership team.
Edward Rogers, who is also the chair of the family trust that controls the Toronto-based telecom and media company, wanted to replace Mr. Natale with chief financial officer Tony Staffieri and to oust other executives, The Globe and Mail reported last week. The conflict is likely to be the focus of discussion at next week’s board meeting.
The power struggle comes at a crucial time for Canada’s largest wireless carrier, which is spending billions to build 5G wireless networks and has struck a deal to acquire Shaw Communications Inc. for $26-billion, including debt.
“While I’m deeply disappointed by the recent public airing of board discussions, I am very confident and excited about the future of Rogers under Joe Natale’s stewardship, and that of his leadership team,” Ms. Rogers, the company’s longest-standing director and the widow of its late founder, Ted Rogers, said in a statement to The Globe.
“Rogers, our board and leadership are united in our efforts to successfully come together with Shaw and build on our family legacy to connect and serve Canadians across the country. As Ted always said, the best is yet to come,” she added.
Ms. Rogers’s statement comes ahead of a board meeting scheduled to take place before the company reports its third-quarter results on Oct. 21. A source told The Globe earlier this week that the board is planning to discuss Edward Rogers’s future interactions with the company’s management. The Globe is not identifying the person because they are not authorized to speak publicly about the matter,
Edward Rogers did not respond to a request for comment.
By expressing her support for Mr. Natale and his team, Ms. Rogers is backing her daughter, deputy chair Melinda Rogers-Hixon, who opposed Edward Rogers’s attempt to overhaul the company’s management team.
“Every family has disagreements, and in that respect we’re no different,” Ms. Rogers said in an e-mail responding to questions from The Globe. “We each have strong views, but at the end of the day, we all have the best interest of Rogers at heart.”
During an emergency board meeting on Sunday, Sept. 26, the majority of the company’s directors and the Rogers family backed Mr. Natale and his management team, three sources told The Globe previously. The Globe is not identifying the individuals because they are not authorized to speak publicly about the matter. Mr. Staffieri left the company three days later.
Rogers is awaiting regulatory approval of its deal to acquire Shaw. Three federal bodies – the Competition Bureau, the Canadian Radio-television and Telecommunications Commission and the Department of Innovation, Science and Economic Development – are reviewing the acquisition.
Ms. Rogers said in her e-mail that she’s “very supportive” of where the company is today and where it’s going.
“One of the wonderful things about being a family-run company is we take a long-term view, not just quarter by quarter,” Ms. Rogers said. Ted had planned for the company to be taken over by a professional manager, with the family continuing to be involved, she added. “That meant we needed to find the right CEO to lead us forward and we have that in Joe. The investments we’re making to come together with Shaw, in our networks, in our communities, and in our employees are the right ones and I’m very confident about the future of Rogers under Joe and his leadership team.”
Ms. Rogers, aged 82, was born in London, England, to a British politician – her father was governor of Bermuda – and an heiress to the Woolworth department store fortune. She attended Wellesley College in Massachusetts and graduated from the University of Miami with a degree in fine arts. Loretta and Ted met at a party in the Bahamas in 1957 and married six years later. Her family advanced money from her inheritance to fund her husband’s business ventures, making her the company’s first investor.
The price of Rogers shares slipped at the beginning of the week after news of the telecom company’s boardroom showdown, but more than recouped that loss to close Friday at $60.68 on the Toronto Stock Exchange.
Key decisions at Rogers, such as the composition of the board, are ultimately made by two entities – the family trust and an advisory committee. The Rogers Control Trust, and other family holding companies that it controls, together own 97.5 per cent of the company’s voting Class A shares, according to the company’s 2021 management information circular. (The Rogers family also owns about 10 per cent of the outstanding Class B non-voting shares.)
As the trust’s chair, Edward Rogers is responsible for liaising with other family members and voting the proxies on the election of company directors, among other duties. The vice-chair of the trust, Ms. Rogers-Hixon, assists him in that role.
Overseeing the trust is an advisory committee comprising 10 people, six of them Rogers family members. Edward’s sisters Martha and Lisa Rogers, as well as Loretta’s nephew David Robinson, sit on the committee along with Loretta, Edward and Melinda. The non-family members are Alan Horn, who served as the company’s chief financial officer and as interim CEO; Thomas Hull, a childhood friend of Ted’s and the founder of insurance brokerage The Hull Group; Toronto mayor John Tory, who ran Rogers’s cable operations under Ted; and Ted’s long-time adviser Phil Lind.
Ted, who died of congestive heart failure in 2008, had health problems throughout his life. In his 2008 book Relentless, co-written with Robert Brehl, Ted said his priority was to ensure that his family maintains control of the company he worked “so damned hard to build over 50 years for as long as feasible under today’s tax law regime.”
To achieve that objective, Ted established the control trust, stipulating that each year, the person who heads it – the controlling shareholder – comes up for renewal. If the person is not performing the job actions laid out in Ted’s will and acting in the best interests of the family, he or she can be replaced by a two-thirds vote of the advisory committee members.
“Under my current will, my son, Edward, will hold this controlling shareholder position for the first two years after my death,” Ted Rogers said in his book. He likened the structure to the checks and balances between the U.S. president and the Senate and the House of Representatives.
“The president has the most power and can veto any bill, but the Congress should always be consulted, because it can override the veto with enough votes,” he said.
When asked whether she supports Edward continuing in his role as chair of the family trust, Ms. Rogers said that “discussions around the trust are private but I know that every member wants to put the company first with every decision they make.”
Richard Leblanc, a professor of governance, law and ethics at York University, said the Rogers board doesn’t comply with certain best-governance practices, such as having an independent chair, a majority of independent directors and some form of term limit for directors.
“There’s a rationale for that which is understandable, given the presence of the family, but these practices are tried and true,” Prof. Leblanc said. “When you stray away from what is regarded as best practices, and especially in a family business, there is a likelihood that conflicts can occur.”
Ms. Rogers said she has full confidence in the company’s directors, who reflect a diversity of views and have experience from a variety of backgrounds. “We have a strong track record of good governance and that will continue,” she said.
“When I think about where we are today, with Joe [Natale] and our team of 24,000 employees, making bold investments to grow our company, take care of employees, give back to our communities and be there for Canadians for decades to come, I know Ted would be incredibly pleased with the journey we’re on,” Ms. Rogers said.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.