It’s been an eventful week for Rogers Communications (RCIb.TO), to say the least. Aside from the company’s Toronto Blue Jays being on the brink of elimination in the American League Championship Series, Rogers surprised the telecom industry with Monday’s announcement that Guy Laurence had been pushed out as CEO.
Much of the early focus was on his eventual replacement -- former Telus boss, Joe Natale -- who will take over once his non-compete agreement with his former employer has run its course.
In explaining the move to analysts Monday, interim CEO Alan Horn, who is chairman of the board, spoke of Rogers’ desire to have the “absolutely best management possible.” In Natale, Horn spoke of a proven operator, citing Natale’s track record of keeping customers happy at Telus.
But an equally important part of the story (if not more so) is the relationship between Laurence and the Rogers family. The company is controlled by the family, through voting stock. And four of Rogers’ 14 board members are members of the family.
“This is more about the relationship between Guy Laurence and his board,” telecom industry consultant Iain Grant of Seaboard Group told BNN in an interview.
Laurence’s attempts to shake up the culture at Rogers have been well documented. While some of those efforts were well received, some questioned his approach.
“Laurence has a bit of a brash style,” money manager John Stephenson of Stephenson & Company told BNN in an interview.
Under Laurence’s leadership, members of the Rogers family – in particular, Edward Rogers and Melinda Rogers – took a back seat. While initially on board with the strategy, Laurence’s treatment of the two was “disrespectful,” according to a source familiar with the matter.
Rogers, of course, is part of a frequently cited group of Canadian companies with dual-class share structures (including, among others, Bombardier, Alimentation Couche-Tard, etc), enabling founding families to remain in control.
While much of the attention in the days ahead will be on Rogers’ incoming CEO, the shake-up is a reminder of who’s firmly in charge.
“You have to get along with the members of the family,” said Stephenson. “That’s a very significant portion of Rogers as a company.”