- Sports Direct shareholders advised to vote against re-election of Mike Ashley to board
- Pension and Investment Research Consultants also urge investors not to re-elect chairman Keith Hellawell
- Sports Direct hosts its AGM on September 7
Sports Direct shareholders have been urged to vote against the re-election of founder Mike Ashley to the board by a leading advisory group.
In a note to clients, Pension and Investment Research Consultants (Pirc) advised shareholders to vote against executive deputy chairman Ashley because of concerns about his influence on the board.
The group cited the judgement of MPs that Ashley should be accountable for working practices at Sports Direct, which have been heavily scrutinised during an inquiry by the Business, Innovation and Skills Committee.
Pirc has also advised shareholders to vote against the re-election of chairman Keith Hellawell, who the group claimed had not shown leadership.
It said Sports Direct’s board has “consistently failed to address the employment practices issues raised by some shareholders and trade unions that have also been criticised by a parliamentary select committee report”.
Pirc added: “It is important for the shareholders to be confident about the board’s ability to represent its best interests. This is no longer the case with the existing chairman and an oppose vote is therefore recommended.”
As previously reported, Sports Direct was already facing a shareholder revolt even before Pirc’s note as some of its largest investors bid to force change at the top of the under-fire retailer.
The retailer has come under further pressure as it emerged that it is using a distribution broker owned by Ashley’s brother, which was not declared in its full-year accounts.
Sports Direct pays Barlin Delivery, owned by John Ashley, a share of sales generated by orders dispatched overseas, the FT reported.
Sports Direct’s reputation has been battered this year by accusations surrounding working conditions at its Shirebrook warehouse and its use of zero-hour contracts, while financial performance has declined.
Hellawell and Ashley were both hauled in to give evidence to MPs, with the latter admitting that Sports Direct had become too big for him to control.
Members of the Business, Innovation and Skills Committee have already vowed to “hold Ashley’s feet to the fire” over working practices.
Last week, Sports Direct said it would unveil a report into working practices, compiled by its law firm RPC, ahead of its AGM on September 7.
The retailer will also conduct a separate review of its board by next April.