Sports Direct has announced it would undergo an independent review of working practices and corporate governance in light of concerns raised by shareholders.
Initially the review was meant to be undertaken by the retailer’s law firm RPC, but the retailer’s owner Mike Ashley has confirmed it would now be led by an independent party.
“The board has made this decision after listening to shareholder feedback at the recent AGM/open day and during subsequent consultation with a number of the company’s long-standing shareholders,” Sports Direct said.
The move comes after an eventful few weeks for Ashley and his sportswear retail empire, in which they faced intense scrutiny from the media and MPs, as well as shareholders, over its corporate governance and working practices at its Shirebrook warehouse where it was revealed that some staff were paid below the minimum wage.
The news also comes after share prices for Sports Direct plunged by five per cent last week, following a pessimistic profits forecast by brokers.
At Sports Direct’s recent AGM, independent shareholders – especially Investor Forum which has a 27 per cent stake in the retailer and consists of investors holding assets worth more than £14 trillion – led a rebellious vote with 53 per cent opposing the re-election of chairman Keith Hellawell.
Sports Direct has moved to address concerns by offering casual retail staff guaranteed hours instead of zero hours contracts and ensuring all warehouse staff are paid above the national minimum wage following an initial, internal review by RPC.
In addition, the company said that the selection process for having a workers’ representative on the retailer’s board will be via “democratic staff elections, in which it is anticipated that all staff directly engaged or employed by Sports Direct may vote.