December 4, 2023

The Queens County Citizen

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Rogers | Joe Natale’s departure raised questions

Rogers |  Joe Natale's departure raised questions

(Montreal) Rogers Communications CEO Joe Natale’s departure raises questions about the company’s direction, which seeks to end the power struggle on the board of directors and focus on buying rival Shaw Communications, experts said Wednesday.

Christopher Reynolds
Canadian Press

In a statement released late Tuesday night, telecommunications giant Mr. Natalie is no longer the CEO and has announced that she is replacing former CFO Tony Staffery on a temporary basis. The board has begun research to find a permanent CEO to guide the purchase of Shaw, worth $ 26 billion.

Mr. Staffieri is among the candidates for the permanent post, Rogers said.

Tyler Chamberlain, an assistant professor at the Telfer School of Management at the University of Ottawa, said the family feud over President Edward Rogers’ attempt to replace Mr Natalie with Mr. Staffery had been resolved, but there were uncertainties at the top. For the company.

Edward’s mother, Loretta Rogers and sisters Martha Rogers and Melinda Rogers-Hickson opposed the changes.

“Are these people fighting like this?” Obviously, this is not good for the company, nor for the shareholders or the management team. And we need leadership from the board, ”Chamberlain noted.

The first attempt by Edward to remove Mr Natale and replace him with his number two led to Staffery’s departure in September, as well as a board vote to remove Edward from his seat as Board Chairman.

Edward then drafted a shareholders ‘resolution – without moving forward through a shareholders’ meeting – to remove the five directors who had challenged him. The company has filed a legal challenge against its reorganization board, leading to a legal battle over who really is in it.

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On November 5, British Columbia Supreme Court Judge Edward ruled that the maneuver was legal.

“These family feuds form an interesting background to this controversy, which is largely due to Shakespeare’s play,” Judge Shelley Fitzpatrick wrote in her judgment.

“No big scandal, no big corruption”

But Mr. Natalie’s departure could lead to a new strategic focus for Rogers, which, according to Mr Chamberlain, has spent a period of “underperformance” on the tenure of the outgoing boss.

“Another executive has been appointed to replace a poor CEO. It happens often, ”he said.

“It simply came to our notice then. These are just differences in strategic visions and who should lead this largest and most valuable company best. ”

RBC Dominion Securities analyst Drew McRonald said he expects more changes at the senior management level, but does not expect the changes to affect the company’s regulatory approval process. ‘Deal with Shaw.

Three federal agencies are reviewing the potential purchase. The Canadian Radio-Television and Telecommunications Commission (CRTC) will hold a public hearing on the matter on November 22.

Companies that own dual-class shares such as Rogers can make significant profits, but a recent dispute over the board of directors also underscores the governance risk associated with this structure.

Ben Klaus, a member of the research team that studies the concentration of ownership in the telecommunications and media sectors in Canada, said, “The person really responsible for Rogers is not the owner, but the management.

“Now Rogers is on the verge of gaining control of the shop, giving him control of the media empire from coast to coast.”

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Companies with dual-class shares issue various sets of common shares that have different characteristics, especially in terms of control and voting rights. It often gives an unlimited share of these rights to a group of shareholders – usually founders, family members or company executives.

Different companies use this structure, such as Google’s parent company, Alphabet and Ford Motor Company. In Canada, the list includes Shopify, Canada Goose Holdings, Bombardier, Alimentation Couche-Tard and Canadian Tire.

“The whole feud seems to be under control. And when one of the people involved in the feud controls 97% of the business, I think the result is very predictable,” Klaus said.

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