It’s crazy to think that just 15 years ago, Rogers was a dominant telecommunications company with strong positions in each of the wireline, wireless and cable industries.
But the Canadian market has since changed dramatically.
To its credit, Rogers has rolled up its sleeves, overhauled its telecom business, shed some major consumer brands and reinvested in the businesses that truly matter. It’s a fine line to walk, and Rogers has been successful in expanding its business in areas where it is less reliant on the attention from its media business – but more proof that it has the skill set needed to thrive in the new world.
And this is where Rogers’ boardroom debacle stands out. As a shareholder and subscriber, I can’t help but think that Rogers did itself, and its board, a tremendous disservice by mishandling its own business operations.
I’m not naive about what an “uneasy boardroom” looks like, nor do I think that the antics that happened just before Rogers’ board meetings were the result of a dereliction of duty, or worse yet, a fundamental breakdown in oversight. The corporate culture at Rogers is strong, and it’s the intricacies of how management runs the business, and not the individuals within it, that are the issue here.
But it does take a serious toll on the reputation of a company, even if it was going to happen anyway, and, honestly, that’s more than enough to make any executive nervous.
The risk in what Rogers did is that as a result of their actions, it demonstrated a weakness in the board’s governance oversight of the corporate affairs division.
A larger risk is that by sticking by their decision, Rogers has risked creating the very impressions that it wishes to fight to bolster. A passive-aggressive stance that exhibits disrespect for shareholders and the board undermines the company’s credibility and integrity. These are values at the heart of Rogers, and something I strongly hold dear.
But the bigger losers in this affair will likely be the Canadian telecoms. It’s no secret that the domestic industry is currently dominated by a handful of national players. And it’s also no secret that the Canadian market is lacking some much-needed competition when it comes to telecoms. At a time when companies are looking at new ways to monetize their premium content, this type of public discord is exactly the last thing Canadian telecommunications companies want to see.
This is, after all, the very company that has entered the market and confirmed whether or not it intends to become one of the major players.
The long-term winner here, however, is Rogers, if not for itself, then for its shareholders and its board. The board made a mistake, but Rogers is a well-oiled machine that will continue to get stronger and more transparent going forward. And with a proper plan in place, it is far more capable of evolving in a shifting industry and seizing what may be its greatest opportunity to push out more value to its shareholders.
Canadian investors, and everyone who cares about this issue, should be rooting for Rogers to do just that.