Behind Rogers’ first-rate image is a pattern of ruptures. But CEO Joe Natale could still survive
He tolerates you until he doesn’t, and once he’s mentally evolved the breakup can be brutal. This is the doctrine of Edward Rogers.
Since his father, Ted, passed away in 2008, the same pattern has been repeated at Rogers Communications with three consecutive general managers. The latest, Joe Natale, could still survive. But even if he does, the current CEO of the company will be forced to manage his hands tied. Edward wants him to go – and now, it seems, Rogers family confidants like Phil Lind are doing too.
All of this reminds us that much of what Rogers Communications presents to the public is a farce. The telecommunications company promotes a first-rate image, with a board of directors made up of Canadian business elites.
Board votes, behind-the-scenes deals and betrayal: the battle for control at Rogers
Edward Rogers must learn that timing is everything
Ted Rogers’ wishes for family control of the business complicated the power struggle
But there’s one board above the board, and that’s the Rogers Family Trust. Ideally, Edward Rogers chairs it. While every investor knows it theoretically, because the company has double-class shares and public investors don’t really get a vote, last month revealed how the family is still pulling the strings.
Who holds the power? Depends on the day. All it takes is for a family member to have a fit, and the fault lines are exposed. Edward released a statement on Friday saying he fired five public board trustees and replaced them with his own picks.
âThe need for effective and independent advice from management is precisely why changes were needed,â said Edward. Rogers says the decision is “invalid”.
Considering how it all turned out, the company might as well do away with its public board, as it ultimately has very little power. The mirage of independent governance only makes matters worse.
And this mirage exists in far too many public enterprises. Dual-class stocks have long been a feature of Canadian companies, as many large companies here are family-owned, but they are becoming more and more prevalent, especially in the tech sector where founders have far too much control. The Facebook scandals keep piling up, but very little change as Mark Zuckerberg doesn’t care to shake things up. And no one can force his hand.
At Rogers, Nadir Mohamed was the first CEO to learn how things really worked. He had been hired away from Telus in 2000 to run Rogers’ wireless division at a time when cellphones were starting to explode in popularity, and at first he and Edward coexisted, with the family’s only son taking responsibility for cable. of the company. division in 2003.
After Ted Rogers’ death in 2008, Mr. Mohamed won the first post. To appease the family, he agreed to have Edward serve as executive vice president, and Edward’s sister, Melinda Rogers-Hixon, as senior vice president. It earned him five years to run the show. But when it came time to renegotiate his contract, Mr. Mohamed reportedly asked for more freedom, which meant Edward and Melinda might have to leave.
The opposite has happened. Mr. Mohamed was practically disappeared, and no one will say why.
Then Guy Laurence, the former director of Vodafone UK, who wowed the board with visionary bluster. Mr. Laurence appreciated what he was dealing with in terms of broken family and close confidants, so he tried to wrap himself in the founder’s mantle when he could. In one example, he ended his 100-word mission statement with Ted’s enduring line: âThe best is yet to come. “
Miraculously, he left such an impression that Mr. Laurence found a way to ensure that Edward and Melinda did not have managerial positions in the company. Yet during his reign, Mr. Laurence got a taste of Edward’s ruthlessness.
Rogers owns the Toronto Blues Jays, and in 2014 Edward decided he was done with longtime team president Paul Beeston. Mr. Beeston, however, was deeply rooted in Major League Baseball, having worked as the league’s chief operating officer. So when Edward started calling for a replacement, he made the mistake of calling Jerry Reinsdorf, owner of the Chicago White Sox, to inquire about hiring the club’s executive vice president.
The problem: Mr. Reinsdorf and Mr. Beeston were very good friends. News of the sacking campaign got back to the Blue Jays, and it all got awkward from there. Mr. Beeston finally left at the end of the 2015 season.
Mr Laurence faced his own exile a year later, and like his predecessor, the CEO’s exit has been dizzying, especially given all the praise he received on his arrival from Britain. Mr Laurence certainly had operational issues, such as a tough cable strategy that resulted in a $ 500 million depreciation, but he also lost family support – and Edward, in particular, wanted him to go. In the end, the brash Briton only lasted three years.
The answer to this volatile era was supposed to be Mr. Natale. Explaining why Mr Laurence was kicked out, Phil Lind, vice chairman of the board, said the decision “was greatly influenced by the fact that Joe Natale was available”. He added: “Joe is considered the most valuable player available.”
Mr Natale has not been able to take a lot of energy during his tenure. It only started in 2017 due to a non-compete clause with Telus Corp., where he previously worked as Darren Entwistle’s assistant, and the past 18 months or so have been consumed by the pandemic. Rogers has suffered in recent times because the company has a large wireless division and high margin charges such as roaming charges have largely dried up.
Edward cited business performance as the reason he thinks Mr. Natale should leave. Two longtime Rogers family advisers, including Mr Lind, lined up behind Edward on Friday.
This time around, Edward is not on the same wavelength as his immediate family and his own mother has been pushing for him to be removed as chairman of the company’s board. But what hasn’t changed is that power is flowing at Rogers, and players switch teams with very little public explanation. For investors, it’s a stark reminder of who’s really running the ship.
Your time is precious. Receive the Top Business Headlines newsletter delivered to your inbox in the morning or evening. register today.