VANCOUVER – Changes made to the Rogers Communications Inc. (RCI) board of directors by Edward Rogers are valid, a British Columbia Supreme Court judge ruled today.
Mr. Rogers removed and replaced five board members by written consent resolution in his capacity as chair of the Rogers Control Trust on Oct. 22, a move that RCI at the time declared to be “invalid”.
On Oct. 26, Mr. Rogers filed a petition with the Supreme Court of B.C. seeking, among other orders, a declaration the written consent resolution making changes to the board is valid.
Justice Shelley Fitzpatrick today granted Mr. Rogers the orders he sought and costs for reasons that “are quite lengthy” she said. As such, the reasons were not read out in court.
The ruling means John Clappison, David Peterson, Bonnie Brooks, Ellis Jacob and John MacDonald have been removed as members of the RCI board. Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr have replaced them.
The order is effective today as Justice Fitzpatrick denied a request by RCI lawyer Stephen Schachter asking for it to be stayed until Tuesday afternoon to give them an opportunity to seek a stay from the Court of Appeal.
“Today’s decision resolves important governance issues at Rogers Communications Inc.,” said Mr. Rogers in an emailed statement.
“I take no joy in the decision or the events of past weeks,” he said. “The judgment confirms I acted appropriately, in accordance with RCI’s Articles and applicable corporate law, with a clear preference for expediency to ensure that Rogers Communications is effectively governed.”
Mr. Rogers said RCI needs “an effective board that shares a strategic vision for the business, is open, deliberate, consistent in its decision making, independent of management, and that always acts in the best interests of the corporation.” Joe Natale has the board’s support and remains RCI CEO and a director, according to the statement.
“Our focus must be on the business, a return to stability, and closing our transformational merger with Shaw Communications.
“The steps I have taken in the face of constant attacks in the media were difficult for me and my family. As Chair of the Rogers Control Trust, my responsibility is to ensure that the company is properly governed and effectively managed. I take that responsibility very seriously,” Mr. Rogers said.
He acknowledged all families have disagreements and indicated he hopes theirs will be resolved privately. “I know every member of our family wants the brightest future for Rogers Communications,” he said.
“Most importantly, recent events do not in any way change the tremendous confidence that I have in Rogers Communications, our bright future, our management team, and the 24,000 employees who make the company the overwhelming success that it is. I would like to thank each and every one of our employees for their continued dedication and support of Rogers.
“As we proceed towards closing our merger with Shaw Communications, continue making investments in our future and executing well for our customers, I am certain that for Rogers Communications the best days are still ahead of us.”
Updated, Nov. 5 at 7:45 p.m.:
Martha Rogers, Edward’s sister, has since tweeted “Nevertheless, she persisted. #EdRogersSaga #OldGuardDown”
Her tweet includes an image of a written statement, which reads: “We are very disappointed with the court’s ruling, which represents a black eye for good governance and shareholder rights and sets a dangerous new precedent for Canada’s capital markets by allowing the independent directors of a public company to be removed with the stroke of a pen.”
She further said they believe the “ruling also ushers in a particularly dangerous time for RCI. The company now faces a very real prospect of management upheaval and a prolonged period of uncertainty, at perhaps the worst possible time.”
She indicated there will be an appeal process unfolding from here, during which they “plan to remain steadfast in our advocacy for good governance and responsible stewardship at Rogers on behalf of our employees, customers and all shareholders.”
Martha Rogers also brought up RCI’s deal with Shaw, stating: “We also plan to do everything we can to help the company successfully conclude the transformative Shaw transaction for the benefit of all stakeholders. What we can take away from this is that we have elevated the discussion around corporate governance to the national stage. We plan to continue to amplify the voices of shareholders such that, whether they hold ordinary shares or those with multiple voting rights, all are equally worthy to be heard in the discourse of good governance and responsible company management.”
