Alexandra Posadzki is The Globe and Mail’s telecom reporter.Brent Rose/Supplied
Alexandra Posadzki is The Globe and Mail’s telecom reporter. Her extensive, groundbreaking coverage of the boardroom conflict that erupted at Rogers Communications Inc. in the fall of 2021 captivated Bay Street and readers across the country and was recognized with several Canada Best in Business Awards from the Society for Advancing Business Editing and Writing. On Feb. 13, McClelland & Stewart will publish Rogers v. Rogers: The Battle for Control of Canada’s Telecom Empire, her book about the dispute that divided the family that controls the telecom giant. The following exclusive excerpt details the events that occurred the day after the telecom’s board met to discuss the terms of company CEO Joe Natale’s departure, after Mr. Natale had, in his view, effectively been fired by chairman Edward Rogers. The board voted 10-1 in favour of a resolution accepting the terms of Mr. Natale’s departure; the only director who voted against it was former Ontario premier David Peterson.
Shortly before 10 a.m. on Saturday, Sept. 25, 2021, Martha Rogers appeared beneath the arched doorway of a two-storey, French-inspired mansion on Toronto’s Forest Hill Road. The house, which was guarded by a heavy metal gate, sat across the street from Upper Canada College, just steps away from where the Rogers kids had grown up. It belonged to her sister Melinda Rogers-Hixon.
Martha and Melinda weren’t exactly seeing eye to eye at the time. The COVID pandemic had kept them physically apart and, according to Melinda, left them with doubts and uncertainties about what was going on at the telecom company that bore their family’s name. A situation involving pandemic precautions had also created tension within the family, according to sources. At one point, Melinda had received a letter from the advisory committee to the Rogers Control Trust – a group that included her sister Martha – prohibiting her from visiting her cottage for the season. Melinda, Martha and their mother, Loretta Rogers, all had cottages on the family compound on Tobin Island, property that was owned by the family trust. (Edward and his wife Suzanne Rogers’s cottage was on a different part of the island and not owned by the trust.) Melinda had contracted COVID earlier that year, and Loretta and her doctor were apparently concerned that she could still infect others. Melinda was hurt by the reaction, but she respected the concerns and had all family members and staff regularly tested for COVID by the Cleveland Clinic, one person said.
There was another reason why Martha’s sudden appearance on Melinda’s doorstep was surprising. Of the four Rogers children, Martha had shown the least interest in Rogers Communications Inc., though she did have a few stints working at the company founded by their father.
Having allowed her registration as a naturopathic doctor to lapse, she spent her time keeping her mother company, particularly after Ted’s death, and serving on the boards of various non-profit organizations. She chaired the Rogers Foundation, which her parents had created as a vehicle through which to donate to health-, education- and environment-related causes. Like her mother, she was passionate about protecting wildlife and nature. Once, as the two women stood by a marina near their cottages and watched a turtle dig a nest in the sand, they were so struck by the decline they had witnessed in Muskoka’s turtle population that they launched a program aimed at protecting the species.
Despite Martha’s limited corporate experience, her father had given her a seat on the Rogers board. She chaired the environmental, social and governance committee, but that was about the extent to which she involved herself in the company’s affairs. All of that was about to change, however. Martha was about to play a crucial role in the escalating power struggle that would soon engulf the telecom’s board.
By that point, Martha was becoming increasingly concerned that the independent directors seemed to have a different set of facts regarding Natale’s performance than the ones that she and her mother had been presented with. The morning after Peterson’s impassioned speech to the board, she embarked on a fact-finding mission. She called Peterson and peppered him with questions. Over the course of more than an hour, he laid out his perspective on the situation.
Then, she showed up at Melinda’s house. She wanted to know if what Peterson had told her was true. Together, Melinda and Martha phoned up the contingent of independent directors. The conversation was, according to one source, “the breaking of the dam.” The directors spoke about years of what they perceived to be bad behaviour, describing Edward with words like “arrogant” and “bully.” The more that Martha heard, the more convinced she became that firing Natale had been the wrong move. She was insistent that they find a way to bring him back.
Loretta was also beginning to have a change of heart. She spoke first to Martha, who relayed to her the independent directors’ concerns. Then she discussed the situation with directors John MacDonald and Bonnie Brooks. That conversation afforded her a “more complete and unbiased” picture of Natale’s performance, leading her to conclude that she had been misled by her son and her late husband’s long-time lieutenant, Alan Horn, she later said in court documents. Her decision to switch sides in a fractious battle between her adult children would have been difficult for any parent. But by that point, Loretta had also decided that her son’s actions needed to be undone.
That afternoon, Melinda’s driver deposited her at Peterson’s Caledon farmhouse, roughly an hour outside the city. They settled into a pair of armchairs in the den, a welcoming room with pine wainscoting on the walls and a fireplace filled with crackling flames. There, they devised a plan to reinstate Natale and address the corporate governance shortcomings that had resulted in his termination.
They knew that to convince Natale to return, chief financial officer Tony Staffieri would need to go. They also wanted to ensure that Natale was free to run the company without interference from Edward. The solution, they decided, was a compromise, one that would allow Edward to remain the chair by putting ring-fencing around him. William Braithwaite, a Stikeman Elliott lawyer, helped them draft the resolution.
Alexandra Posadzki’s Rogers v. Rogers: The Battle for Control of Canada’s Telecom Empire.Supplied
That day, Natale informed a handful of his leadership team – Dave Fuller, Jim Reid and Jordan Banks – of his imminent departure. He planned to tell the rest of the team on Sunday. But the situation wasn’t sitting well with him, despite the generous severance package that he had secured. Thinking back to the conversation that he had overheard, Natale knew that the bulk of the senior leaders he had brought on board would soon be trailing him out the door. So when Peterson and Melinda called from Peterson’s den to ask Natale if he’d consider sticking around, he told them that he was open to the idea but needed to consult with his wife and his lawyer first.
The pieces of Peterson and Melinda’s plan were falling into place. They had an ousted CEO interested in reclaiming his job and enough board votes to push the change through. They toasted their progress with the house specialty cocktail: a dill pickle martini.
Edward and his allies, meanwhile, were completely oblivious to the scheme that was quietly unfolding among a subset of the company’s board. According to Edward’s account, neither MacDonald nor Brooks said a word about it when they met with him the next day to finalize Staffieri’s compensation. As far as Edward could tell, Natale seemed pleased with the arrangements. A press release was drafted, praising Staffieri’s “incredible work ethic” and his “track record for results.” But the announcement appointing “one of the company’s and telecom industry’s most highly regarded leaders” as its new chief executive wouldn’t cross the wire on Sept. 27 as planned. Because when the board convened virtually on Sunday afternoon and Edward began outlining Staffieri’s compensation package, he was interrupted by MacDonald. He and several of the directors had a better plan, MacDonald said. Then he passed the floor to Edward’s baby sister.
Martha’s voice was clear and forceful as she read out a new resolution that would rescind the board’s approval of Natale’s resignation, sweeten his employment contract and fire Staffieri, replacing him on an interim basis with a finance executive named Paulina Molnar. The motion also proposed reinstating John Clappison as a director, conducting a corporate governance review and establishing an executive oversight committee that would allow Melinda, MacDonald and Clappison to supervise Edward’s interactions with Natale and his management team.
Edward and his remaining supporters on the board – a group that had, by that point, dwindled to just Horn, Phil Lind and Rob Gemmell – were completely blindsided. Horn was especially outraged. A cool-headed man who often played the peacekeeper role, he was rarely riled up, which made his anger that much more salient. After all the complaining that the contingent of independent directors had done about bad corporate governance, here they were springing this resolution on everybody else without warning. It was hypocrisy, he said.
Edward and Lind were furious as well, as was Gemmell. While the dissident directors saw themselves as opposing the unilateral actions of an authoritarian chairman, Gemmell later characterized their actions as a “display of duplicity.”
“This is not how you conduct yourself if you’re a serious group of people,” Gemmell said, seemingly invoking Logan Roy, the fictional patriarch from HBO’s hit television series Succession, who in one episode tells his adult children, “I love you, but you are not serious people.”
In the end, the meeting – held via Microsoft’s Teams platform – adjourned without a vote. The plan was to give everyone time to think it over and reconvene in three days.
Excerpted from Rogers v. Rogers: The Battle for Control of Canada’s Telecom Empire by Alexandra Posadzki. Copyright ©2024 Alexandra Posadzki. Published by McClelland & Stewart, a division of Penguin Random House Canada Limited. Reproduced by arrangement with the Publisher. All rights reserved.
Editor’s note: This story has been updated to note that Martha Rogers has worked at Rogers Communications Inc. beyond her board role.