Hellawell failed to achieve support for his re-election from the majority of Sports Direct’s independent shareholder at the AGM in September and will again seek re-election at a general meeting on 5th January. In his statement Hellawell added:” The Board accepts responsibility for our shortcomings, but there has also been disproportionate, inaccurate and misleading commentary.”
In its half year results Hellawell also reported that in relation to the planned review of the company’s corporate governance, the board has continued a constructive dialogue with the company’s independent shareholders via The Investor Forum. The board is also in the process of selecting an independent chairperson to undertake the review.
In respect of the concern about working practices which has been subject to media reports and scrutiny by MPs, Sports Direct reported
that its employment agencies were now operating a standard grievance procedure which the company said created a better balance between rights of workers and disciplinary needs. The company also reported that demand to move from zero hours contracts has been low but the group is to extend its consultation across the business, and now include exploring arrangements that may prove more attractive. Meanwhile the company said an initial test group of agency staff had accepted permanent employment contracts.
The half year figures also revealed that the company will be taking delivery of a corporate costing $51.1 million (£40.3 million), will “generate substantial operational benefits”. The jet will be in addition to the helicopter Ashley uses to commute to the retailer’s Derbyshire headquarters. Sports Direct has also entered into an agreement with Double Take taking exclusive rights of its cosmetic brand SPORT FX; the company is directed by Ashley’s daughter Matilda. This will not be the first family connected transaction, the boyfriend of Ashley’s daughter Anna was appointed as as a property consultant and of a firm owned by his brother was used for deliveries.
Following an investigation by the Financial Reporting Council’s Financial Reporting Review Panel which highlighted the lack of reporting by the company of its international operations in its 2015 annual report and accounts Sports Direct’s board decided to provide additional information in the commentary provided in the company’s 2016 half year results. The FRC said the directors have agreed to include specific commentary about Sports Retail’s international stores in its narrative reporting, including the strategic report, and to present separately segmental information about these stores in the accounts. These changes will also be reflected in the company’s 2017 annual report and accounts that are expected to be published in August 2017.
The company has also published an engagement statement spelling out how the company intends to engage with investors, analysts and the media. When the company announces its full and half-year results, releases its annual report and accounts and holds its AGM the company said it would host a collective meeting for the company’s major shareholders to provide shareholders with an extended opportunity to engage with management. Sports Direct said non-executive directors would undertake meetings with individual shareholders as needed throughout the year.
Steps have been taken to strengthen the board with the appointment of ex-investment banker, David Brayshaw as a non-executive director.