Whole country watching as next CEO tries to lower the temperature and raise the performance of one of Canada’s leading companies
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The headline-making debacle at Rogers Communications underscores some of the challenges for both investors and senior management when it comes to multi-class share companies. A British Columbia court has now ruled that the Rogers family trust and its chairman, Edward Rogers, calls the shots when it comes to how Rogers is run. That presents challenges for any new CEO replacing Joe Natale, who seems likely to be vacating the corner office soon, given the recent boardroom upheaval.
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So, what should a new CEO do to operate successfully within this context? Here are five suggestions:
1. Set appropriate expectations: I’ve worked with family-controlled companies all over the world and the chair/CEO relationship is entirely different in this context. As Rogers’ new CEO, you need to understand you will be “looking the shareholders in the eye” on a regular basis. CEOs who work well in a family board environment absolutely love this aspect of the job — it drives home to them the impact and importance of their decisions on a family’s fortunes, history and legacy in a way that CEOs of widely held public companies seldom experience. But Type-A, limelight-seeking CEOs seldom do well in this environment. They’re uncomfortable sharing power with the family leader and the relationship inevitably becomes contentious. Coming into this job, you need to understand how it differs from running a widely held public company and set your expectations appropriately.
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2. Confirm or rewrite the chair and CEO roles: They need to be well-defined and well understood by the people playing them. The role of an executive chair, which Edward Rogers is, can and should be designed to capitalize on the strengths and abilities of the individual, rather than some “cookie cutter” governance template. One of my clients — the chair of a global company based in Israel — led corporate efforts to form joint ventures with global partners, including Pepsico. While this would typically be within the purview of management, it was something she was extremely good at and interested in and it ultimately become a cornerstone of her company’s success. Never forget that family chairs will often be viewed as “corporate royalty” — an asset that should be capitalized upon.
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3. Build working relationships with all directors: It may be tempting in the Rogers scenario for a new CEO to focus exclusively on developing a relationship with Edward and ignoring the rest of the board. This would be a grave mistake. Because of the power structure, it can be particularly important for the CEO to have other directors to kick around ideas with, in confidence, whether before or after discussing them with the chair. Other directors — especially those the chair evidently holds in high esteem — can provide guidance and also influence the chair behind the scenes. Their insights, wisdom and support can be invaluable.
4. Insist on an annual evaluation of the chair: No, Edward isn’t going anywhere. But it’s good governance to conduct an annual evaluation of his performance — and important to make it a real evaluation, not the shams you’ll still uncover at many organizations where chairs either assess themselves or conduct a perfunctory survey. Because of the power structure at Rogers, even the British model of having a lead director conduct the chair’s review may not work well. Retain a third party and have them conduct confidential interviews with every member of the board and with senior managers who regularly attend board meetings — drawing out really worthwhile feedback for Edward through probing and examples. He can choose to ignore the feedback, of course, but if it’s constructive, practical and balanced, he likely won’t. Having conducted director evaluations since 1996, my experience is that this sort of process leads to improvement about 80 per cent of the time. It’s the best professional development tool I’ve seen for any chair — or for any director, for that matter.
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5. Carefully design your strategy-making process: Rogers’ acquisition of Shaw is clearly the company’s cornerstone for growth. Even so, as the new CEO you will need to revisit corporate strategy in your first year of working with the board. Strategy, after all, is at the heart of most CEO jobs. During the review, it will be critical to engage with the chair and other board members but without losing control of the process. This is best done by setting ground rules at the outset and engaging with the board early on — not by you as a new CEO essentially “presenting out” your strategy to the board, hoping not to be derailed. Strategy-making that’s more inclusive in this way not only builds collaboration, it can take advantage of the talent at the Rogers board table far more effectively, adding real value for the CEO, the company and the family.
Oh, and 6: Enjoy yourself: The whole country will be watching as you try to lower the temperature and raise the performance of one of Canada’s leading companies. There are few challenges/opportunities like it.
Beverly Behan, president of Board Advisor, LLC, has advised 200 boards of directors on board effectiveness issues over the past 25 years.
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Beverly Behan: Five tips for Rogers' next CEO - Financial Post
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