Company governance specialists say the boardroom feud at Rogers Communications Inc. has highlighted shortcomings in how Canada regulates firms.
Richard Leblanc, a governance professor at York College, says that out-of-date guidelines at each the provincial and federal degree are permitting undemocratic enterprise practices.
He says a Friday ruling from the British Columbia Supreme Court docket that discovered Edward Rogers, as head of the Rogers household belief, may change administrators with out holding a shareholder assembly is feasible solely as a result of the province is an outlier that hasn’t up to date its laws on the problem.
Leblanc says the dual-class share construction utilized by Rogers and quite a few different massive companies in Canada, which give some shares extra voting rights than others, can be problematic and may include both sundown clauses or stronger inside governance controls.
College of Alberta enterprise professor Randall Morck says dual-class constructions do have some makes use of, particularly within the fast-moving high-tech world the place an organization founder could have specialised information, however develop into extra problematic after they get handed right down to a second or third era.
He says the Rogers case additionally highlights points with the usage of household trusts, which he says are a means for the very rich to cut back inheritance taxes.
This report by The Canadian Press was first revealed Nov. 7, 2021.