Mike Ashley is no stranger to investor unease, but he could be heading towards a bigger upset at this week's AGM.
Following guidance issued by shareholder group Pirc, now Sports Direct shareholder Royal London Asset Management (RLAM) has said it will vote against Ashley's reinstatement on the board this year.
Ashley Hamilton Claxton, RLAM's corporate governance manager, said: “We have lost confidence in the board and are very concerned about the long list of corporate governance failings that have not been addressed. For the second year in a row, Royal London has decided to vote against the re-election of the non-executive directors at Sports Direct.
"This year we also cast our vote against the election of Mike Ashley, founder of Sports Direct. We question how a board can effectively function when the executive deputy chairman fails to attend four board meetings, even if they are unscheduled."
RLAM will also vote against the changes to the bonus scheme for 2016, after the earnings targets were lowered. Sports Direct revealed in July it was planning to drop the threshold from £480m to £420m.
At the time chief executive Dave Forsey said it was because “planned acquisitions did not fully materialise” and the target was now “unreasonably challenging”. Mr Forsey said a deal to buy House of Fraser was the “one that got away”, with the department store snapped up by Chinese group Sanpower instead.
However RLAM's Hamilton Claxton does not believe that is sufficient reason.
“The board’s decision to lower the earnings targets for the executive directors’ bonus scheme is unacceptable by UK standards and serves as yet another example of poor governance, so we’re voting against the remuneration report and the share scheme amendment as well," she said.
RLAM owns around 1.05m shares in the retail, equivalent to a stake of around £8.3m. The group's investment comes through its tracker funds rather than actively managed ones, which means it cannot sell the stock regardless of what decision investors make collectively at Wednesday's meeting.
"We think it’s an issue of market integrity. Our tracker funds by definition cannot sell the stock, and therefore we feel it’s something worth speaking out about," a spokeswoman told City A.M.
It comes just days after Pirc urged investors to vote against a number of resolutions, including Ashley's presence on the board, over similar corporate governance fears.
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Sports Direct declined to comment.