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| Sports Direct faces more pressure over working practices review | |
| (35 minutes later) | |
| Local authority pension funds are planning to back a shareholder resolution calling for an independent review of Sports Direct’s treatment of employees. | Local authority pension funds are planning to back a shareholder resolution calling for an independent review of Sports Direct’s treatment of employees. |
| The retail group will hold its annual general meeting on 7 September in Shirebrook, Derbyshire, where shareholders will vote on a trade union-backed plan to commission an investigation into working practices that will report back within six months. | The retail group will hold its annual general meeting on 7 September in Shirebrook, Derbyshire, where shareholders will vote on a trade union-backed plan to commission an investigation into working practices that will report back within six months. |
| Last week, the company said it would publish an “independent report” on working practices put together by its lawyers, RPC. It said the report would review and report on an internal investigation announced last December after the Guardian’s revelations about treatment of staff at its Shirebrook warehouse. | Last week, the company said it would publish an “independent report” on working practices put together by its lawyers, RPC. It said the report would review and report on an internal investigation announced last December after the Guardian’s revelations about treatment of staff at its Shirebrook warehouse. |
| The Local Authority Pension Fund Forum (LAPFF) said it was supporting the Unite resolution, briefing member funds that the company’s review, led by Sports Direct’s majority shareholder and founder Mike Ashley, was not independent. It added that RPC’s report “would just rubber-stamp the company’s version of affairs”. | The Local Authority Pension Fund Forum (LAPFF) said it was supporting the Unite resolution, briefing member funds that the company’s review, led by Sports Direct’s majority shareholder and founder Mike Ashley, was not independent. It added that RPC’s report “would just rubber-stamp the company’s version of affairs”. |
| “LAPFF’s hope is that an independent human capital strategy review will rectify any workplace practices deemed inappropriate and will help Sports Direct to move forward from the reputational and financial damage it has suffered,” said LAPFF’s chairman, councillor Kieran Quinn. | “LAPFF’s hope is that an independent human capital strategy review will rectify any workplace practices deemed inappropriate and will help Sports Direct to move forward from the reputational and financial damage it has suffered,” said LAPFF’s chairman, councillor Kieran Quinn. |
| “LAPFF’s view is that responsible business practices by companies lead to sustainable returns for investors over the long term. We are worried that this view is not shared by Sports Direct.” | “LAPFF’s view is that responsible business practices by companies lead to sustainable returns for investors over the long term. We are worried that this view is not shared by Sports Direct.” |
| The Trade Union Share Owners group, which represents £1bn of pension funds and worked with Unite and Sports Direct shareholders including the Unison and TUC pension funds to put forward the resolution, said RPC “lacks relevant expertise in employment and industrial relations practice”. | The Trade Union Share Owners group, which represents £1bn of pension funds and worked with Unite and Sports Direct shareholders including the Unison and TUC pension funds to put forward the resolution, said RPC “lacks relevant expertise in employment and industrial relations practice”. |
| Sports Direct’s board has advised shareholders to vote against the resolution as it had already asked RPC to undertake a review. In its recommendation, it said: “The board therefore considers the action called for by this resolution to be an unnecessary distraction that would duplicate the important work that is already under way.” | Sports Direct’s board has advised shareholders to vote against the resolution as it had already asked RPC to undertake a review. In its recommendation, it said: “The board therefore considers the action called for by this resolution to be an unnecessary distraction that would duplicate the important work that is already under way.” |
| Sports Direct has come under pressure to reform its working practices and corporate governance as its sales performance and share price have suffered following damning revelations about its treatment of store and warehouse workers. | Sports Direct has come under pressure to reform its working practices and corporate governance as its sales performance and share price have suffered following damning revelations about its treatment of store and warehouse workers. |
| The calls for change got louder this week as it emerged that Sports Direct pays an obscure company owned by Ashley’s brother to deliver online orders outside the UK. | The calls for change got louder this week as it emerged that Sports Direct pays an obscure company owned by Ashley’s brother to deliver online orders outside the UK. |
| One of Sports Direct’s top 10 shareholders said the arrangement with John Ashley did not look good, while Royal London Asset Management said it had lost confidence in the retailer’s directors to protect the interests of investors other than its founder. | One of Sports Direct’s top 10 shareholders said the arrangement with John Ashley did not look good, while Royal London Asset Management said it had lost confidence in the retailer’s directors to protect the interests of investors other than its founder. |
| Leading shareholders had already told the Guardian they were considering voting against board reappointments. A leading advisory group has recommended that Sports Direct shareholders should vote against the reelection of the company’s chairman Keith Hellawell, and Mike Ashley. | Leading shareholders had already told the Guardian they were considering voting against board reappointments. A leading advisory group has recommended that Sports Direct shareholders should vote against the reelection of the company’s chairman Keith Hellawell, and Mike Ashley. |
| In a note to clients, Pensions and Investment Research Consultants (Pirc) said under Hellawell’s leadership Sports Direct’s board had “consistently failed to address the employment practices issues raised by some shareholders and trade unions that have also been criticised by a parliamentary select committee report”. | In a note to clients, Pensions and Investment Research Consultants (Pirc) said under Hellawell’s leadership Sports Direct’s board had “consistently failed to address the employment practices issues raised by some shareholders and trade unions that have also been criticised by a parliamentary select committee report”. |
| Sports Direct has commissioned an external evaluation of its board of directors, following criticism of the retailer’s corporate governance. | Sports Direct has commissioned an external evaluation of its board of directors, following criticism of the retailer’s corporate governance. |
| More than 28% of independent shareholders did not back Hellawell at last year’s annual meeting, including the well-respected Standard Life. New rules mean he must now win their support, rather than relying on the vote of Ashley, the company’s founder who owns a 55% stake. | More than 28% of independent shareholders did not back Hellawell at last year’s annual meeting, including the well-respected Standard Life. New rules mean he must now win their support, rather than relying on the vote of Ashley, the company’s founder who owns a 55% stake. |