This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/football/2015/dec/10/insiders-point-to-dominant-role-of-mike-ashley-after-sports-direct-revelations

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Insiders point to dominant role of Mike Ashley after Sports Direct revelations Sports Direct revelations add to concerns over dominant role of Mike Ashley
(35 minutes later)
The dominant role of Mike Ashley in the management of Sports Direct has been underlined again, after the Guardian revealed that many of the retailer’s temporary warehouse staff receive effective hourly rates of pay below the minimum wage.The dominant role of Mike Ashley in the management of Sports Direct has been underlined again, after the Guardian revealed that many of the retailer’s temporary warehouse staff receive effective hourly rates of pay below the minimum wage.
The store chain, founded and still 55%-owned by the billionaire, was shown on Wednesday to be conducting compulsory searches of workers at the end of shifts, time which they are not paid for. It was also revealed that the group makes harsh deductions from pay packets for slight lateness . The store chain, founded and still 55%-owned by the billionaire, was shown on Wednesday to be conducting compulsory searches of workers at the end of shifts, time which they are not paid for. It was also revealed that the group makes harsh deductions from pay packets for slight lateness.
The new revelations added to concerns about the way Ashley runs the company – which, as a component of the FTSE 100 index, is a standard investment for most pension funds.The new revelations added to concerns about the way Ashley runs the company – which, as a component of the FTSE 100 index, is a standard investment for most pension funds.
Related: Who's who at Sports DirectRelated: Who's who at Sports Direct
Responding to the Guardian’s investigation, Ashley Hamilton Claxton, the corporate governance manager at Sports Direct shareholder Royal London Asset Management, said: “We remain concerned about corporate governance issues at the company and believe these issues will continue to place a drag on the share price over the long term. Until the company improves both its governance and its relationships with employees, shareholders face substantial risks.Responding to the Guardian’s investigation, Ashley Hamilton Claxton, the corporate governance manager at Sports Direct shareholder Royal London Asset Management, said: “We remain concerned about corporate governance issues at the company and believe these issues will continue to place a drag on the share price over the long term. Until the company improves both its governance and its relationships with employees, shareholders face substantial risks.
“We maintain that companies, such as Sports Direct, need strong governance in place to protect the interests of minority shareholders, employees and other stakeholders. Ignoring such issues is shortsighted and runs the risk of eroding shareholder value.” “We maintain that companies such as Sports Direct need strong governance in place to protect the interests of minority shareholders, employees and other stakeholders. Ignoring such issues is shortsighted and runs the risk of eroding shareholder value.”
Hamilton Claxton has previously said that she had “lost confidence in the board” following a string of corporate governance failings that included Ashley failing to attend four unscheduled board meetings.Hamilton Claxton has previously said that she had “lost confidence in the board” following a string of corporate governance failings that included Ashley failing to attend four unscheduled board meetings.
Meanwhile, other shareholders have shown signs of irritation with Sports Direct, with Standard Life, which owns 2.33% of the retailer, commenting in its latest governance review: “Concern over governance arrangements has been a persistent theme of the relationship between Sports Direct and its minority investors.Meanwhile, other shareholders have shown signs of irritation with Sports Direct, with Standard Life, which owns 2.33% of the retailer, commenting in its latest governance review: “Concern over governance arrangements has been a persistent theme of the relationship between Sports Direct and its minority investors.
“These issues have included board appointments, inappropriate remuneration arrangements, share lock-up agreements and Sports Direct’s practice of buying minority stakes in other companies.”“These issues have included board appointments, inappropriate remuneration arrangements, share lock-up agreements and Sports Direct’s practice of buying minority stakes in other companies.”
The problem, insiders claim, is that Ashley is in total control of the group and rarely listens to anybody outside his tight group of close lieutenants – and least of all the company’s board.The problem, insiders claim, is that Ashley is in total control of the group and rarely listens to anybody outside his tight group of close lieutenants – and least of all the company’s board.
Meanwhile, even staunch allies of Ashley, who is also the owner of Newcastle United, have questioned the governance of the business. In February, Crispin Odey – who controls almost 5% of Sports Direct through his hedge fund Odey Asset Management and had previously called Ashley a “genius” – said that the then 14-month wait to appoint a finance director at the firm put “too much power into one person’s hands”.Meanwhile, even staunch allies of Ashley, who is also the owner of Newcastle United, have questioned the governance of the business. In February, Crispin Odey – who controls almost 5% of Sports Direct through his hedge fund Odey Asset Management and had previously called Ashley a “genius” – said that the then 14-month wait to appoint a finance director at the firm put “too much power into one person’s hands”.
Sports Direct has since appointed the largely unknown Matt Pearson, its former financial controller, as its acting finance director on a salary of £60,000. Odey declined to comments further when approached by the Guardian. Sports Direct has since appointed the largely unknown Matt Pearson, its former financial controller, as its acting finance director on a salary of £60,000. Odey declined to comment further when approached by the Guardian.
The most stark illustration of the apparent impotence of the Sports Direct board came in March when Ashley was called to give evidence to a parliamentary enquiry into the company’s conduct. He declined to attend, instead sending his chairman, Keith Hellawell, and the result was widely considered an embarrassment – even inside the retailer. The most stark illustration of the apparent impotence of the Sports Direct board came in March when Ashley was called to give evidence to a parliamentary inquiry into the company’s conduct. He declined to attend, instead sending his chairman, Keith Hellawell, and the result was widely considered an embarrassment – even inside the retailer.
Simon Reevell, then a Conservative member of the Scottish affairs committee, chastised Hellawell, a former chief constable, for what appeared an almost total lack of knowledge of the detail of how the company is run.Simon Reevell, then a Conservative member of the Scottish affairs committee, chastised Hellawell, a former chief constable, for what appeared an almost total lack of knowledge of the detail of how the company is run.
The MP said: “We understand that on at least one occasion the company tried to negotiate on its rent by refusing to pay, and with a supplier by refusing to pay. That sounds like a backstreet outfit. We struggle to understand why a reputational matter like this was completely unknown to you as chairman.”The MP said: “We understand that on at least one occasion the company tried to negotiate on its rent by refusing to pay, and with a supplier by refusing to pay. That sounds like a backstreet outfit. We struggle to understand why a reputational matter like this was completely unknown to you as chairman.”