The Investor Forum, consisting of influential investors holding assets worth more than £14 trillion, has urged Sports Direct to “undertake a wide-reaching independent review of the entire governance practices at the company”.
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However, that is not going to satisfy investors, one of whom – Legal & General Investment Management – has already insisted Mr Hellawell should step down immediately.
Jon Trickett, Labour’s shadow business secretary, welcomed what he said were “good steps forward”. The company would change, he assured attendees.
But Hellawell only got just over 47% of the votes in an independent resolution to re-elect him, with almost 53% against.
“What we really need is an independent investigation, as called for by the trade union resolution at Sports Direct ‘s AGM”.
Nearly 21 per cent of shareholders voted for an independent review of working practices, despite the company’s own review being published on Tuesday.
Head of stewardship and environmental, social and governance investment at SLI Euan Stirling delivered a strong rebuke of the executive team’s running of the company. These included ending zero-hours contracts.
The company has faced a string of allegations, with the Unite union making clear in its submission to the Business Select Committee that staff were subject to “Victorian” working practices and lived in constant fear of losing their job or facing disciplinary action for “excessive” talking or spending too long in the toilet.
As hundreds of supporters descended upon Nottingham for a campaign rally held by Jeremy Corbyn, he took aim at Mike Ashley and Sports Direct.
Hellawell agreed that the company’s conduct with regard to agencies had been “embarrassing”, and the company would change the situation.
The billionaire founder of the discount sports retailer also suggested both he and embattled chair Dr. Keith Hellawell will then quit if shareholders are still unhappy.
In response to Tuesday’s report Sports Direct said it would engage with shareholders to improve its corporate governance, appoint a worker’s representative to its board and offer directly employed shop workers the option of switching from so-called “zero hours” contracts to ones with a guaranteed minimum amount of work.
The company has said all those working in its warehouses will be paid the minimum wage.
And it will have also tried the patience of shareholders following the admission earlier that profits this year are likely to be down by a fifth on last year.
The sportswear firm also said it would continue to employ the boyfriend of Mike Ashley’s daughter to run its property arm. He also said the firm was seeking to beef-up its board with new independent non-executive directors.
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Despite this, Sports Direct said it rejected an offer by Hellawell to resign, and with Ashley owning a controlling stake, he prevailed over minority investors.
