A version of this article first appeared on Global News on October 28, 2021
In the early 1990s, as a young spokesman for the federal minister of telecommunications, I had a memorable meeting with Ted Rogers.
In one of his legendary risks, Rogers had bought out the other shareholders of Cantel, and would later re-brand it as Rogers Wireless. Intense and often unrelenting, he asked for the meeting to share his strong views about Canada’s telecommunications policy. Was he motivated by self-interest? Of course. But with both reason and passion, he also articulated the connection between his vision and a greater good for the country: one in which entrepreneurship, investment and innovation would fill unmet consumer needs.
The legendary founder is often invoked today, as his family feuds for control of the empire he left behind. But in all the media statements, comments from anonymous sources, and legal filings made public, they forget what Ted Rogers never did: the need to articulate why this debate matters to anyone outside the Rogers boardroom.
There is little or nothing about why the status quo, or any alternative, is desirable or undesirable for shareholders — or stakeholders. As a result, all reputational boats sink. It looks like a shallow conflict based on ego and personality.
To be fair, it began with a highly sensitive question: the board chair’s dissatisfaction with the CEO’s performance. No sensible person would want to discuss this in public, given the legal, financial, operational, and reputational risks of doing so.
Now, however, with the story dominating headlines for weeks, the risks have become the reality.
The affair is a ratings winner. Two big things make it so: first, it’s about a widely known brand, a $29 billion public company, and a bitter, personal conflict between high-profile protagonists; and second, it has implications for the governance of public companies, and for millions of people who are its customers, shareholders, or employees.
There have been a few references to the world beyond the boardroom — cursory allusions to shareholder interests, network performance and customer service. But unlike other high-profile corporate control battles, there is no hint of a clash of visions, nor even a divergence on major decisions such as Rogers’ proposed $26 billion takeover of Shaw Communications.
All the communication is about the protagonists themselves – including revelations about Edward Rogers’ conflict with the popular president of the Toronto Raptors, and cringeworthy reminders of his ill-considered family photo with Donald Trump last spring.
The irony is that there is much at stake for those concerned with Rogers’ success. At a time when investors are increasingly focused on environmental, social and governance (ESG) risk, concerns about the ‘G’ — governance — loom large.
At a time when investors are increasingly focused on environmental, social and governance (ESG) risk, concerns about the ‘G’ — governance — loom large.
As Mark Wiseman, a veteran pension-fund leader, wrote this week: “A structure whereby the son of the founder sits as the chair of a trust and basically controls all the voting power in a company, publicly traded since 1979, is more akin to the Soviet politburo than anything resembling a responsible corporate governance structure.”
And as per a Bloomberg analysis, Rogers’ price-earnings ratio lags those of its competitors — not just because of sluggish growth, but because of governance concerns.
Part of the challenge is that a company’s risks are interconnected. Ask yourself a simple question: would recent events make you more or less likely to want to work there? At a time when the top talent is more mobile than ever, that is a competitive disadvantage for Rogers — and an opportunity for its competitors.
It’s not surprising that analysts have lowered their target prices for Rogers by as much as 10 per cent within the next 12 months. That would have an impact on the company’s market capitalization of almost $3.5 billion.
It doesn’t have to be this way. Having advised many leading Canadian and global companies, I’ve seen how family-led businesses can enjoy more trust from their stakeholders, because their commitment to the business and the community is often deeper. The key to success is continuous, public demonstration of these motives, in both words and actions. It means managing family conflict with skill, and the greater good in mind. And it means being more transparent, not less, at times of crisis. In an era in which much of a company’s market value comes from its reputation, leaders must stand for something bigger than themselves.
In an era in which much of a company’s market value comes from its reputation, leaders must stand for something bigger than themselves.
Ted Rogers understood this. It remains to be seen whether his successors can follow his example.