Edward Rogers seeks to assert control at Rogers Communications

More twists in Rogers drama

Edward Rogers is seeking to assert his control over Rogers Communications Inc. and there may not be much the company can do to stop him, an expert says.

The Toronto-based telecommunications giant appeared open to exploring legal options Friday as a boardroom fight escalated between the company and Edward, who was removed as chair of the company Thursday, but remains chair of the family trust that controls the firm.

The fight broke out after Edward unsuccessfully attempted to put Rogers' former chief financial officer Tony Staffieri into the CEO role and replace other members of the leadership team, according to media reports.

Multiple reports say the plan to replace Rogers CEO Joe Natale was blocked by board members, including Edward's sisters and mother, and his attempt at shaking up the firm led to him being replaced as chair of the board on Thursday.

But Edward, who remains chair of the family's Rogers Control Trust, is not giving up. In a late night news release on Thursday, he announced his plan to remove John Clappison, David Peterson, Bonnie Brooks, Ellis Jacob and John MacDonald, who was named chair on Thursday, from the company's board of directors.

In their place, he named Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr as the new directors.

Richard Leblanc, a professor of governance, law and ethics at York University, said successfully countering Edward's moves will be difficult, if not impossible.

The difficulty in stopping Edward lies in how the company was set up by late founder Ted Rogers, who arranged the company so that his family trust controls 97 per cent of the firm's class A voting shares and so that trust votes need two thirds of support to pass, Leblanc said.

Ted's intention was to ensure his company stays in his family's hands and to make it difficult to oust his relatives or dilute their control.

"That's the brilliance of Ted Rogers and why he likened being chair of the trust to being the president of the United States," LeBlanc said.

"There's a lot of authority."

One of the few ways control could be wrested away from Edward is if he loses his role as chair of the trust, Leblanc said.

That seems unlikely after two members announced their support for Edward.

“I worked alongside Ted for most of my 53 years at RCI and am supportive of the changes that have been announced today," said Phil Lind, a former vice-chairman at Rogers, who wrote a book about being Ted's "Right Hand Man."

“My primary focus going forward is to assist the members of the Rogers and Shaw teams to ensure a successful completion of the transaction.”

Alan Horn, who said he started working with Ted in 1979, also supports Edward.

“I look forward to working with Edward, the Rogers family, and the reconstituted board to help the company complete its game-changing transaction with Shaw," he said in a statement.

Leblanc said it wouldn't surprise him if Edward Rogers garnered at least one additional supporter, giving him enough votes to keep his role.

"Several directors that are on these types of boards have told me that their role as a director is to give counsel, but at the end of the day, the founder has the authority and you owe your board seat to founder, so its founder's way or the highway," said Leblanc.

This can be especially true at a company like Rogers, where an unconventional corporate governance structure, little turnover and a lack of independent committees and chairs offers fewer checks and balances, he said.

"They have directors on the board that are over-tenured, that have been there longer than nine years or significantly longer," Leblanc said. "I think one director, who is a former politician, has been on the board 30 years."

The company moved toward introducing some additional corporate governance controls on Thursday, when it launched an executive oversight committee.

The company has also said it is concerned that the trust would seek to make a fundamental change in such an unusual way and has not yet received any documentation from Edward or the trust regarding the board member changes.

If it receives that documentation, it said it would consult with its counsel.

Leblanc said he has never seen anything like the drama unfolding between the company and Edward. He likened it to a "soap opera," but said a resolution is likely on its way.

"One way or the other, it sounds like we're going to come to a bit of a showdown in the next day or two or even today, and hopefully one decision will be made and then everybody has to...rally around the final set of directors, whoever they may be."

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