Ashley's Sports Direct bows to public pressure
Published 07/09/2016 | 02:30
Sports Direct International said it will look into its corporate governance as part of a wider review of labour practices, bowing to investor concerns after chairman Keith Hellawell faced a call to resign.
Sports Direct said it deeply regrets "serious shortcomings" in warehouse labour practices and issued an apology in a statement yesterday, the day before what is likely to be a highly charged annual general meeting.
The review will take place over the next 12 months.
The company is trying to assuage concerns of investors, who are running out of patience with the embattled company and its billionaire founder Mike Ashley.
On Monday, Royal London Asset Management called for Mr Hellawell to resign, saying that it will again oppose the reappointment of the company's non-executive directors.
That followed public criticism by a group speaking for more than a quarter of independent shareholders.
Yesterday's statement goes further than an announcement last month that the retailer was planning an external evaluation of the board for later this year.
Sports Direct will speak with shareholders to obtain their views, it said.
"It is good news that Sports Direct is responding to public and investor pressure to reform working practices," said Oliver Parry, head of corporate governance at the UK's Institute of Directors.
"It's certainly better late than never, but this is only the first step towards restoring shareholder and employee trust in the management and board.
"A radical overhaul of their corporate governance arrangements needs to be the next step."