ISSUER DIRECT'S BLOG

Sports Direct Chairman Beats Activist Investors in Rematch

Posted by Angie Goertz on Sep 7, 2017 3:49:50 PM

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This week, investors’ attempt to oust the chairman of a giant sporting goods retailer in England were unsuccessful — again.

Fifty-three percent of shareholders voted to re-elect Keith Hellawell as chairman of Sports Direct. In a 2016 vote, more than half of shareholders voted against him, but Hellawell was able to survive when Mike Ashley, the company’s majority shareholder (60 percent) and founder, backed his stay in a second vote.

Per reporting from the Financial Times and The Guardian, in 2016, independent shareholders supported a resolution for an independent review of corporate governance and working practices. A parliamentary inquiry the same year found that employees were being treated “without dignity and respect.” Sports Direct initially agreed to it but then tapped a law firm affiliated with the company to conduct the review instead. Hellawell had stated that an independent review was not necessary. At the recent meeting where Hellawell was narrowly re-elected, shareholders asked for an update on this report.

The investment group Standard Life had once been a critic of Hellawell’s leadership. But before the recent vote, it sold all of its shares in Sports Direct, thus “abandon[ing] its effort to drive change in the company,” said the Financial Times.

 

Topics: Investors, Activist Investors, Shareholders, Corporate Governance