Independent shareholders vote to boot Sports Direct chairman, but Mike Ashley saves his right-hand man

 
Helen Cahill
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Today Sports Direct's shareholders voted on Keith Hellawell's position for the second time (Source: parliamentlive.tv)

The independent shareholders of Sports Direct have voted to boot the retailer's chairman Keith Hellawell, but the company's boss Mike Ashley has saved his right-hand man.

Fifty-four per cent of independent shareholders voted to get rid of Hellawell, who has presided over several profit warnings at the company.

Read more: Shareholder advice group calls for Sports Direct chairman to be axed

However, the motion to re-elect him as a director has passed, because Ashley – who is a controlling shareholder at the company – voted in Hellawell's favour.

Ashley said in a statement: "Keith has my full backing and will be continuing in his role on the basis that he has the unanimous support of the board. I note that many of those who voted against Keith have acknowledged that we have made positive progress since the annual general meeting (AGM)."

The result will cause controversy with the embattled retailer's independent shareholders, but they will have another chance to oust Hellawell this year. He has promised to leave if he loses the confidence of the independent shareholders at the retailer's next AGM.

Read more: Sports Direct cashes in on Dunlop brand for £112m

Several influential City voices have been calling for Sports Direct's chairman to go, including Aberdeen Asset Management and Institutional Shareholder Services.

City AM Should Keith Hellawell be axed from Sports Direct?

Standard Life said in a statement: “Standard Life Investments has today voted against the re-election of Keith Hellawell as chairman of Sports Direct.

"This reflects our belief that limited progress has been made by the board since the company’s AGM in September 2016. In particular, we are disappointed to note the lack of progress in recruiting a chairperson for the independent governance review, an initiative that we see as being fundamental to Sports Direct fulfilling its long-term value creation potential."

Read more: Sports Direct bought a new corporate jet for $51.1m despite halved profits

Shareholder advice group Pensions & Investment Research Consultants (Pirc) said Hellawell should be axed because he "failed to show leadership" during a time when the company faced a parliamentary inquiry into how it treated its workers.

The inquiry concluded that Sports Direct's workers had been subjected to "Victorian" working conditions at its warehouse in Shirebrook. A subsequent investigation by HMRC fined the company £1m for failing to pay its workers the minimum wage.

Under Hellawell's stewardship, Sports Direct had "failed to address the employment practices issues raised by some shareholders and trade unions", Pirc said.

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