TORONTO –
Corporate governance experts say the boardroom feud at Rogers Communications Inc. has highlighted shortcomings in how Canada regulates companies.
Richard Leblanc, a governance professor at York University, says that out-of-date rules at both the provincial and federal level are allowing undemocratic business practices.
He says a Friday ruling from the British Columbia Supreme Court that found Edward Rogers, as head of the Rogers family trust, could replace directors without holding a shareholder meeting is possible only because the province is an outlier that hasn’t updated its regulations on the issue.
Leblanc says the dual-class share structure used by Rogers and numerous other large corporations in Canada, which give some shares more voting rights than others, is also problematic and should come with either sunset clauses or stronger internal governance controls.
University of Alberta business professor Randall Morck says dual-class structures do have some uses, especially in the fast-moving high-tech world where a company founder may have specialized knowledge, but become more problematic when they get handed down to a second or third generation.
He says the Rogers case also highlights issues with the use of family trusts, which he says are a way for the very wealthy to reduce inheritance taxes.
This report by The Canadian Press was first published Nov. 7, 2021.
