Tuesday, April 23, 2019

Sports Direct chairman up against shareholder revolt


It‘s expected that Sports Direct Chairman, Keith Hellawell, will face pressure to step down from the  board at the retailer‘s annual meeting next week as a result of new rules that give increased rights to minority shareholders.

Thanks to new guidance from the Financial Conduct Authority, Mike Ashley, Sports Direct‘s executive deputy chairman can be challenged by other investors for the first time, The Guardian reported.

The Trade Union Share Owners (TUSO) group has written to the top 20 investors in the company, which employs thousands of workers on controversial zero-hours contracts, insisting that they vote out Hellawell.

The note also disparages Hellawell for a lack of knowledge and bad judgement relating to the collapse of USC, a subsidiary of Sports Direct. After the demise, the retailer was called out for its treatment of staff.

PIRC, the shareholder advisory group, is also advising investors to vote against the re-election of Hellawell. It warns of a lack of communication among members of Sports Direct‘s board “which puts into question the competency of the board as whole”.

“We are concerned that the chair‘s responsibilities have been poorly managed,” PIRC said.

Frances O‘Grady, general secretary of the TUC, said: “Shareholders and workers both have an interest in reform at Sports Direct. We all want to see a successful business, but this success needs to be built on strong governance and good employment practices, not zero-hours contracts.”