With two overlapping boards, observers left to wonder, who’s in charge?
TORONTO – While the son of the company founder announced late Friday he has created a new board of directors to take charge of Rogers Communications, the existing board and its senior executives are insisting they will not stand down and that the new board announced by Edward Rogers is illegal.
The company has been gripped by scandal for nearly a month now as Edward has been trying to remove CEO Joe Natale and several other corporate leaders (The Globe and Mail originally broke the story). The RCI board of directors responded by removing Mr. Rogers as chair in a majority vote. The family trust, which controls almost all of the voting shares of the company, reportedly tried to remove Mr. Rogers as chair of the trust, but that vote failed.
Then, in the middle of the night, Martha Rogers, Edward’s sister and also a member of the board of RCI and the family trust, shared her anger at her brother in a series of 3 a.m. tweets.
“Wish I could sleep. With 24,000 employees and mortgages on the line, it’s not easy,” tweeted Ms Rogers at 3:19 a.m. Saturday morning.
She also referenced the media frenzy earlier this year where Edward Rogers’s wife Instagrammed a photo of their family with former U.S. president Donald Trump – which caused Mr. Rogers to have to apologize to Rogers employees who were offended by seeing their chair photographed with the disgraceful former president.
“Don’t care you’ll come for me, you have 3 wks straight, & we still get up every time you knock us down. My mother−the co-founder−is 82, what gentlemens. We’ll spend every penny defending the company, employees & Ted’s wishes, nothing you can do will deter us. Bring. It. On,” tweeted Ms Rogers.
“You can stop me anytime by ceasing, desisting & stepping down.”
Late Friday night Mr. Rogers sent out a notice saying, in essence, that the new board of directors he announced with the backing of the majority of the voting trust, are now in control of the company. That board will meet this weekend.
“The previously announced change of directors of Rogers Communications Inc. took effect this morning immediately upon execution of the shareholder resolution by the Control Trust Chair in accordance with section 180 of the Business Corporations Act (British Columbia) and the articles of RCI,” reads his statement. RCI a British Columbia-based company.
“There is no legal basis for declaring the resolution invalid,” the statement continued.
“According to corporate law in British Columbia, a signed resolution of shareholders is deemed to be valid and effective as if it had been passed at a meeting of shareholders, provided it is signed by shareholders holding at least 66.67% of the voting shares.
“The Rogers Control Trust is the controlling shareholder of RCI, with 97.5% of the Class A voting shares. The reconstitution of the Board took legal effect this morning. The CEO’s improper attempt to entrench himself and defeat the interests of shareholders is illegal and ineffective.
“Decisive action was needed to return the company to stability and proceed with a smooth closing of the Shaw transaction,” Mr. Rogers’s statement concludes.
Saturday morning however, both CEO Joe Natale and board chair John MacDonald issued press releases of their own, noting the former chairman’s new board is not legal.
“I, together with my management team at Rogers, share a deep and resolute commitment to all our shareholders and hold the trust they place in us as paramount. We continue to work hard every day to serve the needs of 15 million Canadians, support our hard-working teams across the country and create value for all our shareholders,” reads Natale’s statement.
“My team and I are proud of the incredible commitment of our 24,000 strong team members who work tirelessly to serve our customers each day. We remain fully focused on successfully coming together with Shaw to deliver the next phase of Rogers’ strategic growth and better serve Canadians in communities from coast to coast.”
“The proposal by Mr. Edward Rogers to hold a purported Board meeting with his proposed slate of directors this weekend does not comply with laws of British Columbia, where Rogers Communications Inc. is incorporated, and is therefore not valid,” reads a release from MacDonald. “Accordingly, the purported Board meeting and anything that may arise from such a meeting is also invalid. It is disappointing that the former Chairman is attempting to act unilaterally without regard for the interests of the company and all of Rogers’ shareholders.
“To protect the best interests of the company and all shareholders, the board and its duly elected directors will continue to ensure that Rogers fully complies with the rules and procedures of proper corporate governance.”
This has left observers wondering Saturday, just who, exactly, is in charge at Rogers?
Sources Cartt.ca spoke with today expect court documents to be filed from several parties, soon.
Martha Rogers’s final word came mid-day Saturday when she tweeted: “Unlike Ed I have no lawyers, PR spin firms, staff or media training. Don’t need it. I’m no one special, just a fairly ordinary woman put in extraordinary circumstances. Ted put me on the board as a check and balance to ensure nothing this insane occurs. This is for you Dad.”
UPDATE (October 24, 8 p.m.) Edward Rogers was scheduled to hold a board of directors meeting today with the replacement board he selected. While Mr. Rogers has made no public announcement yet, the company sent out a release from the board members who voted to remove Edward as chair, Martha Rogers, Melinda Rogers-Hixon, Loretta Rogers, John MacDonald, Bonnie Brooks, John Clappison, David Peterson and Ellis Jacob, which reads: “We unequivocally support Joe Natale as CEO and support his management team. We along with the Management continue to work tirelessly on behalf of all stakeholders including customers, employees, and shareholders. We remain as duly elected members of the Rogers Communications Inc. Board and represent the majority of the Board members of the company. No other group of individuals has any authority to purport to act as the Board of Directors of Rogers Communications Inc.”
As well, Martha Rogers returned to her keyboard to add to her stream of tweets, culminating at 3:30 p.m. with “Ed will lose. His play date tonight with the Old Guard is another waste of time. Rogers & its assets are bigger than any one interest. My father understood that. He’d be so disappointed to see how Ed & his puppet masters are behaving destroying the company he built.”
UPDATE (October 24, 10:10 p.m.) Late Sunday night, the “reconstituted” board of the company, under Edward, put out the following statement, announcing itself as the “Board of Directors of Rogers Communications” and saying it “is pleased to announce that it has held its initial meeting as reconstituted following the consent resolution of shareholders (the ‘Shareholder Resolution’) passed on Friday, October 22, 2021. At the Board meeting, the Company appointed Mr. Edward Rogers as Chairman of the Board.
“The Board is comprised of Jack Cockwell, Michael Cooper, Robert Dépatie*, Ivan Fecan, Robert Gemmell*, Alan Horn*, Jan Innes, Jack Kerr, Philip Lind*, Joe Natale*, Edward Rogers*, Loretta Rogers*, Melinda Rogers-Hixon*, and Martha Rogers*.”
“Having served on the Board since 2017, I am fully supportive of the changes that have been implemented,” said lead director Robert Gemmell, in the announcement. “The Board must have absolute alignment in their duties to ensure the business is strategically positioned and effectively managed. To do that, the Board must be independent of management and that is now the case. I am excited for what the future holds at Rogers Communications.”
The statement continued: “The Board expressed disappointment that some within the Company have resisted recognizing the change of Directors that took effect on Friday morning in accordance with section 180 of the Business Corporations Act (British Columbia) and the articles of RCI.
“Mr. Edward Rogers advised that he intends to initiate proceedings in the British Columbia Supreme Court to confirm and implement the Shareholder Resolution.”
* Pre-existing board members