Influential shareholder group the Investor Forum has said today that Sports Direct "can't have any more quick fixes" in its bid to reform its corporate governance.
Phineas Glover, senior adviser at the Investor Forum, said a meeting with Sports Direct's founder Mike Ashley on Wednesday - after the company's AGM - was the "frankest exchange of views I've seen" between the board and independent shareholders.
"We can’t have any more quick fixes or incremental adjustments," Glover said.
On Wednesday, independent shareholders voted to eject chairman Keith Hellawell from the board - but before the result of the vote was announced, Hellawell said he will stay on.
"The independent shareholders sent a clear message to the board," Glover said.
The sports retailer is now planning to conduct a review of its corporate governance, but the Investor Forum said "a huge amount of work needs to be done regarding that review". In particular, the group would be working on making the review more independent.
One improvement the Investor Forum cited was that the review would not be conducted by RPC, Sports Direct's law firm. Alternatively, the review could report to an independent entity.
Peel Hunt upgraded Sports Direct today to "buy", having previously been one of the biggest sellers of the stock.
"Among all the panto at the Open Day, we sensed a genuine will to change strategy," Peel Hunt analysts said.
"Recovery will take time but we see potential for medium-term margin rebuild and thus reverse our stance."
They said Sports Direct's AGM, which was public, had changed their attitude towards the company's strategy.
"Sports Direct has been built on a no-frills, value approach," the analysts said.
"It is becoming increasingly clear that it is no longer appropriate, either for suppliers, or for customers, and Sports Direct's direction of travel is changing to reflect that."