Edward Rogers defeated an effort to limit his voting power at Rogers Communications Inc., paving the way for his extraordinary attempt to replace five directors on the company's board with his allies.Cole Burston/Getty Images
Rogers family matriarch, Loretta Rogers, has denounced her son Edward Rogers, saying he disrespected the wishes of the company’s late founder by attempting to overhaul the board of Canada’s largest wireless carrier without a shareholder meeting.
Ms. Rogers said her son is exploiting his position as the chair of the family trust that controls Rogers Communications Inc. by circumventing the interests of other family members and the company’s governance structure.
The statements by Ms. Rogers are contained in documents filed with the B.C. Supreme Court on Friday in response to Mr. Rogers’s push to replace five of the company’s independent directors with his own slate of candidates.
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Mr. Rogers is petitioning the court to sanction his move to reconstitute the company’s board through a written resolution without calling a shareholder meeting.
The legal challenge is the latest twist in a weeks-long battle for control over the Toronto-based telecom and media giant. The power struggle erupted after Mr. Rogers attempted to replace chief executive officer Joe Natale with the company’s chief financial officer, Tony Staffieri, and oust several other executives.
Rogers is currently in the middle of acquiring Shaw Communications Inc. for $26-billion.
Ms. Rogers said the chair of the family trust is required to consult “earnestly and widely” with the family and with members of the 10-person advisory committee that oversees the trust when deciding to remove or appoint directors. Such decisions should also follow input from the board’s nomination committee, she added.
“And should the control trust chair need to remove and replace directors, he must do so through the ‘public gauntlet’ of a shareholders’ meeting,” Ms. Rogers said, referring to a memorandum of her husband’s wishes.
The governance framework was established “to prevent directors from being removed or elected at the whim of a single individual,” Ms. Rogers said.
“Edward disregarded all of these checks and balances in trying to remove the independent directors without advisory committee consultation or a shareholders’ meeting, and against the business judgment of the majority of the Rogers board of directors,” Ms. Rogers said.
Ms. Rogers’s affidavit also suggests the battle is likely to continue, even if the court sides with her, as she eyes the family trust for further possible recourse.
“If the court determines that a shareholders’ meeting was required and Edward proceeds to call a meeting, I intend to challenge the decision of Edward in his capacity as control trust chair to replace the independent directors,” Ms. Rogers said.
A spokesperson for Mr. Rogers declined to comment.
In an affidavit filed on Tuesday, Edward Rogers said he discussed concerns about Mr. Natale’s performance in a meeting with the advisory committee in September, as well as in meetings as early as March, 2020, and with members of the Rogers board.
Mr. Rogers stated that he discussed the issue with family members in the summer, and that family members, including his sister Martha and mother, Loretta, shared his concerns, as did other members of the advisory committee, Phil Lind and Alan Horn, and board directors Robert Gemmell and Robert Dépatie. According to Mr. Rogers, those people agreed with him about replacing Mr. Natale, and Martha and Loretta agreed that Mr. Staffieri would be a “strong candidate” for CEO.
“Before his death, my father frequently told me he believed in the importance of consultation and discussion, but emphasized the need to have one final decision maker. This is reflected in the control trust structure he created. The trust has an advisory committee that meets periodically to discuss the business and affairs of RCI, and to provide advice and guidance to the control trust chair. However, the chair has the ultimate authority to act on behalf of the trust,” Mr. Rogers said in his affidavit.
Ms. Rogers said her decision to move a motion last week to replace Edward as chairman of the company’s board was “an extremely difficult one” for her and other family members and followed “weeks of unsuccessful attempts by my family, wise friends and counsel to work with Edward on a resolution to the current impasse.
“The final straw was when the media reported that Edward would be seeking to remove and replace five independent members of the Rogers board of directors by written resolution, contrary to Ted’s clear wishes, which I helped him to draft, and contrary to the manner in which directors have been elected at annual meetings of shareholders each year since the company went public, and without any consultation with my family about Edward’s hand-picked director replacements,” Ms. Rogers said in the court filing.
Ms. Rogers said that although the Rogers Control Trust owns 97.5 per cent of the company’s voting class A shares, the family’s control was never meant to be absolute.
“The independent directors that Edward tried to remove had done exactly what shareholders expect of them – they spoke truth to Edward’s power. They criticized Edward for attempting to insert himself as the de facto CEO of Rogers and jeopardizing the Shaw merger, and sought to create safeguards to prevent his meddling from damaging the company,” Ms. Rogers said.
A memorandum of Ted’s wishes, included as part of his widow’s court filings on Friday, shows the founder anticipated a scenario similar to the one that is now playing out.
“Heaven forbid there arises a situation when the majority of the board of Rogers Communications Inc. are totally opposed to the interests of the Rogers family as represented by the control trust chair,” said the document, noting that this would be “the worst of all options.”
The memorandum of wishes said the Rogers Control Trust chair – currently Edward Rogers – “should give considerable thought to whether the issue is important enough to the Rogers family to risk a very public spectacle. If not, the control trust chair should accept it and move on without rancour.”
In her court filing on Friday, Ms. Rogers said her husband established “clear protocols” for resolving conflicts to avoid disrupting the stability of the company and the family trust. “Nothing worried him more than a needless public spectacle,” Ms. Rogers said.
With a report from Mike Hager