Another influential advisory group has urged investors to reject key proposals at Sports Direct’s upcoming AGM, increasing the chances of chief executive Mike Ashley facing a shareholder revolt.
Shareholder advisory group Pirc came out strongly against Ashley, urging shareholders to vote against his re-appointment, as well as vote against the re-appointment of Keith Hellawell as chairman.
“[Ashley’s] position on the board and level of shareholding raises significant concerns about his influence on the board and whether the other directors can objectively challenge and influence the board’s decision making process,” Pirc said.
READ MORE:
Pirc added: “It is important for the public shareholders to be confident about the board’s ability to represent their best interests and not those of the controlling shareholder.
“This is no longer the case with the existing chairman and an oppose vote is therefore recommended.”
The firm also highlighted criticism from the Business, Innovation and Skills select committee which in a 2016 report into working practices at Sports Direct said: “He must be held accountable for some appalling working practices at both the Sports Direct shops and warehouses, either for not knowing about them, or for turning a blind eye to such practices.”
A Sport Direct spokesperson said: “We hope that shareholders will continue to recognise the further positive progress that we have made over the last 12 months.”
Influential advisory groups ISS and Glass Lewis have also urged shareholders to vote against the re-appointment of Ashley and Hellawell.
Ashley, who founded Sports Direct and is currently under pressure to turnaround House of Fraser’s fortunes after acquiring last month, was criticised by ISS for “continued failures” as the boss of retail giant.
ISS also said that Ashley had displayed an “apparent unwillingness” to listen to the concerns of Sports Direct’s independent shareholders.
Glass Lewis slammed Ashley for overseeing many years of “poor governance” at the retailer, adding that negative media stories against him have damaged Sports Direct’s public image.
It also pointed to the retailer’s “poor gender diversity practices”, arguing that Sports Direct does not have a meaningful board diversity policy or measurable gender objectives.
Click here to sign up to Retail Gazette‘s free daily email newsletter
