One company, two faces: Problems with dual-class shares at Rogers show corporate structure has time limit

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Rogers has a share structure that passed its best\u002Dbefore date years ago

ccording to corporate lore, Rogers once hosted an outside event as a nearby cable customer experienced a service outage. While dealing with the telco’s notoriously unresponsive customer service department, this frustrated consumer spotted company founder Ted Rogers on a rooftop patio wining and dining a Bay Street crowd. Enraged, he opened his balcony door and shouted, “Hey Ted, you , your company sucks. Stop stuffing your face and fix my cable.

As far as governance jokes go, this was a favourite until reading about how Edward Rogers, Ted’s son, celebrated the ousting of former Rogers CEO Joe Natale. If you recall, Edward started planning a management shakeup last year while the company was trying to close a major deal. But he didn’t bother consulting the board of directors and was caught thanks to a butt dial by co-conspirator Tony Staffieri, who was CFO at the time and Edward’s pick to replace Natale.

The message was allegedly just a “joke,” not meant to represent how seriously Edward takes governance concerns. But it highlighted the major problem with allowing business founders to maintain control of companies such as Rogers after taking them public using controversial dual-class share structures, which is a rising trend in Canada and the United States.

 

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