Prime Minister Theresa May‘s new crackdown on poor corporate governance and executive pay has prompted one of the City‘s most renowned institutions to turn on Sports Direct.
Standard Life Investments stated in its yearly stewardship report that it was willing to rebel against excessive pay rises, contribute towards the government‘s consultation on boardroom pay, and called for change to the governance of Sports Direct.
The financial giant cited Mike Ashley‘s overbearing influence over Sports Direct in its report.
“We have been concerned for some time about governance arrangements at Sports Direct,” Standard Life stated.
“The board lacks independence and the non-executive directors lack the appropriate skills and experience to enable robust challenge of the executive team, particularly the founder and major shareholder Mike Ashley.”
Standard Life head of stewardship Euan Stirling added: “We have engaged with senior executives and non-executives over many years, to little effect.
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“The responses to our enquiries have been either ineffective or non-existent. Our recent engagement with the chairman reinforced our concerns regarding the influence of Mike Ashley and the lack of oversight by the board.”
The investment firm campaigned publicly last year for an independent review into corporate governance at Sports Direct.
Last month the retailer announced it would use its own lawfirm RPC to conduct the review, which investors deemed unacceptable as its truthfulness and genuine independence would be doubted.
This announcement comes after a second shareholder revolt last month, in which independent shareholders voted in majority to oust the company‘s chairman, only for their vote to be overridden majority stakeholder and founder Ashley.
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