In a press release Thursday night, Edward Rogers said he was seeking to remove five members of the board of directors of Rogers Communications Inc. and replace them with five of his choice. In the statement, Edward said he “believes it would be in RCI’s best interests to reconstitute the board of directors.”
The move comes after Edward was removed from his role as chairman of the company on Thursday amid a messy behind-the-scenes battle for control. In September, Edward tried to get rid of CEO Joe Natale and put the company’s CFO, Tony Staffieri, at the top of the rankings.
An emergency board meeting was called, a meeting in which three members of the Rogers family – sisters Melinda and Martha, along with their mother, Loretta – banded together to stop Edward’s plan. .
Natale reportedly heard about the plan to oust him when Staffieri accidentally called him in a pocket while discussing the plan with one of the company’s former executives, The Globe and Mail reported on Thursday.
Staffieri abruptly left the company within days. But that didn’t stop Edward’s attempts to make changes at the top.
After weeks of behind-the-scenes battles, he was elected chairman of the board of the company founded by his father, Ted. He was replaced as president by independent director John MacDonald, who is one of five board members Edward is trying to remove, along with John Clappison, David Peterson, Bonnie Brooks and Ellis Jacob.
Still on the board
While president, Edward Rogers remains a member of the company’s board of directors. And his decision to replace other board members suggests he’s still looking for change at the top.
“This story may not be over,” Professor Richard Powers of Toronto’s Rotman School of Management told CBC News in an interview Thursday night.
Although Rogers Communications Inc. is a public company whose shares are freely traded on the Toronto Stock Exchange, the family exercises effective control over the company through an entity known as Rogers Control Trust which owns 97 percent of the company’s A shares, which have 50 times more voting rights than the shares that go public.
In response to Edward’s decision, the company released a statement Friday saying it feared the trust was seeking to make a fundamental change in such an unusual way.
He added that he had not yet received any documents from Edward Rogers or the Trust regarding the board member changes and that he would consult with his lawyer if and when that happened.
Unable to influence family
Powers says he thinks Edward made a gross miscalculation.
“Edward thought he had more influence than he did, but he certainly wasn’t able to influence his family members. And… the big stick on this board is Loretta, ”Powers said, referring to Ted’s widow. “She is… the matriarch of the family and to carry out a coup without her support… only calls into question her judgment. “
Investment analyst Jérôme Dubreuil of fund manager Desjardins said in a note to clients on Friday that the power struggle was a distraction.
“It appears that the board of directors is doing everything in its power to resolve the situation quickly in order to stabilize the management and governance processes well before the acquisition of [Shaw] firm, ”he said, referring to the company’s planned $ 26 billion takeover of Shaw, which faces numerous regulatory hurdles.
“Nonetheless, we believe this series of events may very well not be over,” Dubreuil said.