Chairman of the Board Eric Molson and Corporate Strategy: Letting CEOs Do Their Job… or Not

In 1988, Eric Molson became Chairman of the Board of The Molson Companies Ltd. (TMCL). Founded in 1786, the company focused on brewing until the mid-1960s, when it decided to diversify to fuel its growth. In 1988, TMCL had four main divisions: Brewing, Chemicals, Retail, and Sports (the Montreal Canadiens hockey team). Despite lingering doubts about diversification, Eric initially adopted the conglomerate strategy developed by his predecessors over the past two decades. However, he later realized that it was time to end TMCL’s governance as a conglomerate. He firmly believed that Molson’s future lay in “going back to beer” and becoming a global brewer. The case explains how Eric and his board of directors hired and fired several CEOs, John Rogers, Mickey Cohen, Norman Seagram, and Jim Arnett between 1988 and 1999 to get Molson back into his core business. In 1998, Molson finally regained full ownership of Molson Breweries, and in 1999, Molson returned to brewing. However, much remains to be done to secure Molson’s position as a global player in the brewing industry. The case lays the groundwork for a discussion on strategy and corporate governance in the context of a large family business.

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